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<TITLE>P.T. Telekomunikasi Indonesia Tbk.</TITLE>
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

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<DIV style="width: 100%; border-top: 2.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

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<DIV style="width: 100%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 14.0pt;color: #000000; background: #ffffff; margin-top: 4pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>UNITED STATES SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12.0pt;color: #000000; background: #ffffff;">
<B>Washington, D.C. 20549</B>
</DIV>

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<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

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<B>Form&nbsp;20-F</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 3pt; ">

<TR style="font-size: 1pt;">
    <TD width="12%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="85%">&nbsp;</TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT face="wingdings">&#111;</FONT></B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <B>REGISTRATION STATEMENT PURSUANT TO SECTION&nbsp;12(b) OR (g)
    OF THE SECURITIES EXCHANGE ACT OF 1934</B></TD>
</TR>

<TR>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <B>OR</B></TD>
</TR>

<TR>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT face="wingdings">&#254;</FONT></B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <B>ANNUAL REPORT PURSUANT TO SECTION&nbsp;13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934</B></TD>
</TR>

<TR>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    <B>For the fiscal year ended December&nbsp;31, 2005</B></TD>
</TR>

<TR>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT face="wingdings">&#111;</FONT></B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <B>TRANSITION REPORT PURSUANT TO SECTION&nbsp;13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934</B></TD>
</TR>

<TR>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <B>OR</B></TD>
</TR>

<TR>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B><FONT face="wingdings">&#111;</FONT></B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <B>SHELL COMPANY REPORT PURSUANT TO SECTION&nbsp;13 OR 15(d) OF
    THE SECURITIES EXCHANGE ACT OF 1934</B></TD>
</TR>

<TR>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <B>Date of event requiring this shell company report&nbsp;</B></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 9.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Commission file number 1-14406</B>
</DIV>

<DIV align="center" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 18.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Perusahaan Perseroan (Persero)</B>
</DIV>

<DIV align="center" style="font-size: 18.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;Telekomunikasi Indonesia Tbk.</B>
</DIV>

<DIV align="center" style="font-size: 8.0pt;color: #000000; background: #ffffff;">
(Exact name of Registrant as specified in its charter)
</DIV>

<DIV align="center" style="font-size: 18.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Telecommunications Indonesia</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(a state-owned public limited liability company)</B>
</DIV>

<DIV align="center" style="font-size: 8.0pt;color: #000000; background: #ffffff;">
(Translation of Registrant&#146;s name into English)
</DIV>

<DIV align="center" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 9.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Republic of Indonesia</B>
</DIV>

<DIV align="center" style="font-size: 8.0pt;color: #000000; background: #ffffff;">
(State or other jurisdiction of incorporation or organization)
</DIV>

<DIV align="center" style="font-size: 9.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Jalan Japati, 1</B>
</DIV>

<DIV align="center" style="font-size: 9.0pt;color: #000000; background: #ffffff;">
<B>Bandung 40133</B>
</DIV>

<DIV align="center" style="font-size: 9.0pt;color: #000000; background: #ffffff;">
<B>Indonesia</B>
</DIV>

<DIV align="center" style="font-size: 9.0pt;color: #000000; background: #ffffff;">
<B>(62) (22)&nbsp;452-1510</B>
</DIV>

<DIV align="center" style="font-size: 9.0pt;color: #000000; background: #ffffff;">
<B>(62) (21)&nbsp;521-5109*</B>
</DIV>

<DIV align="center" style="font-size: 8.0pt;color: #000000; background: #ffffff;">
(Address of Registrant&#146;s principal executive offices)
</DIV>

<DIV align="center" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 9.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Securities
registered or to be registered pursuant to Section&nbsp;12(b) of
the Act.
</DIV>

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<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 8.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="69%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="28%">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD align="center" nowrap><B>Title of</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Name of each exchange</B></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD align="center" nowrap><B>Each class</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>on which registered</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    American Depositary Shares representing Series&nbsp;B Shares,<BR>
    par value 250 Rupiah per share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    New York Stock Exchange</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Series&nbsp;B Shares, par value 250 Rupiah per share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    New York Stock Exchange**</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 8.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Securities
registered or to be registered pursuant to Section&nbsp;12(g) of
the Act.&nbsp;None
</DIV>

<DIV align="left" style="font-size: 8.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Securities for
which there is a reporting obligation pursuant to
Section&nbsp;15(d) of the Act.&nbsp;None
</DIV>

<DIV align="left" style="font-size: 8.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;
Indicate the number of outstanding shares of each of the
issuer&#146;s classes of capital or common stock as of the close
of the period covered by the annual report:
</DIV>

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<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 8.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="79%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="18%">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Series&nbsp;A Shares, par value 250 Rupiah per share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">
    1</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Series&nbsp;B Shares, par value 250 Rupiah per share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">
    20,159,999,279</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 8.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule&nbsp;405 of the Securities
Act.&nbsp;&nbsp;&nbsp;&nbsp;Yes&nbsp;<FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;<FONT face="wingdings">&#254;
</FONT>
</DIV>

<DIV align="left" style="font-size: 8.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;
If this report is an annual or transition report, indicate by
check mark if the registrant is not required to file reports
pursuant to Section&nbsp;13 or 15(d) of the Securities Exchange
Act of
1934.&nbsp;&nbsp;&nbsp;&nbsp;Yes&nbsp;<FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;<FONT face="wingdings">&#254;
</FONT>
</DIV>

<DIV align="left" style="font-size: 8.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;
Indicate by check mark whether the registrant (1)&nbsp;has filed
all reports required to be filed by Section&nbsp;13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding
12&nbsp;months (or for such shorter period that the Registrant
was required to file such reports) and (2)&nbsp;has been subject
to such filing requirements for the past
90&nbsp;days.&nbsp;&nbsp;&nbsp;&nbsp;Yes&nbsp;<FONT face="wingdings">&#254;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;<FONT face="wingdings">&#111;
</FONT>
</DIV>

<DIV align="left" style="font-size: 8.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;
Indicate by check mark whether the registrant is a large
accelerate filer, an accelerated filer, or an non-accelerated
filer. See definition of &#147;accelerated filer and large
accelerated filer&#148; in Rule&nbsp;12b-2 of the Exchange Act.
(Check one):
</DIV>

<DIV align="left" style="font-size: 8.0pt;color: #000000; background: #ffffff;">
Large accelerated
filer&nbsp;<FONT face="wingdings">&#254;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accelerated
filer&nbsp;<FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-accelerated
filer&nbsp;<FONT face="wingdings">&#111;
</FONT>
</DIV>

<DIV align="left" style="font-size: 8.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;
Indicate by check mark which financial statement item the
Registrant has elected to
follow.&nbsp;&nbsp;&nbsp;&nbsp;Item&nbsp;17&nbsp;<FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Item&nbsp;18&nbsp;<FONT face="wingdings">&#254;
</FONT>
</DIV>

<DIV align="left" style="font-size: 8.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;
If this is an annual report, indicate by check mark whether the
registrant is a shell company (as&nbsp;defined in
Rule&nbsp;12b-2 of the Exchange
Act).&nbsp;&nbsp;&nbsp;&nbsp;Yes&nbsp;<FONT face="wingdings">&#111;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;<FONT face="wingdings">&#254;
</FONT>
</DIV>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD>*&nbsp;</TD>
    <TD align="left">
    Investor Relations Unit, Graha Citra Caraka, Jl. Gatot Subroto,
    No.&nbsp;52, 5th Floor, Jakarta 12570.</TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>**&nbsp;</TD>
    <TD align="left">
    The Series&nbsp;B Shares were registered in connection with the
    registration of the American Depositary Shares. The
    Series&nbsp;B Shares are not listed for trading on the New York
    Stock Exchange.</TD>
</TR>

</TABLE>

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<DIV style="width: 100%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 4.0pt;color: #000000; background: #ffffff;">
<DIV style="width: 100%; border-top: 2.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

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<A name="tocpage"></A>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>TABLE OF CONTENTS</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="19%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="70%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Page</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    &nbsp;<A HREF='#101'>DEFINITIONS</A></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    &nbsp;<A HREF='#102'>FORWARD LOOKING STATEMENTS</A></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    &nbsp;<A HREF='#103'>CONVENTIONS</A></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="7">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="7" align="center" valign="top">
    &nbsp;<A HREF='#104'>PART I</A></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#105'>Item 1.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#105'>IDENTITY OF DIRECTORS, SENIOR MANAGEMENT
    AND ADVISERS*</A></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#106'>Item 2.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#106'>OFFER STATISTICS AND EXPECTED TIMETABLE*</A></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#107'>Item 3.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#107'>KEY INFORMATION</A></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#108'>Item 4.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#108'>INFORMATION ON THE COMPANY</A></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#109'>Item 5.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#109'>OPERATING AND FINANCIAL REVIEW AND
    PROSPECTS</A></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>78</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#110'>Item 6.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#110'>DIRECTORS, SENIOR MANAGEMENT AND
    EMPLOYEES</A></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>140</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#111'>Item 7.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#111'>MAJOR STOCKHOLDERS AND RELATED PARTY
    TRANSACTIONS</A></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>150</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#112'>Item 8.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#112'>FINANCIAL INFORMATION</A></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>158</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#113'>Item 9.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#113'>THE OFFER AND LISTING</A></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>160</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#114'>Item 10.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#114'>ADDITIONAL INFORMATION</A></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>164</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#115'>Item 11.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#115'>QUANTITATIVE AND QUALITATIVE DISCLOSURE
    ABOUT MARKET RISK</A></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>179</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#116'>Item 12.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#116'>DESCRIPTION OF SECURITIES OTHER THAN EQUITY
    SECURITIES*</A></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>183</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="7">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="7" align="center" valign="top">
    &nbsp;<A HREF='#117'>PART II</A></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#118'>Item 13.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#118'>DEFAULTS, DIVIDEND ARREARAGES AND
    DELINQUENCIES*</A></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>183</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#119'>Item 14.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#119'>MATERIAL MODIFICATIONS TO THE RIGHTS OF
    SECURITY HOLDERS AND USE OF PROCEEDS*</A></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>183</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#120'>Item 15.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#120'>CONTROL AND PROCEDURES</A></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>183</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#121'>Item 16.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#121'>RESERVED</A></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>186</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#122'>Item 16A.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#122'>AUDIT COMMITTEE FINANCIAL EXPERT</A></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>186</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#123'>Item 16B.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#123'>CODE OF ETHICS</A></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>186</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#124'>Item 16C.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#124'>PRINCIPAL ACCOUNTANT FEES AND SERVICES</A></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>186</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#125'>Item 16D.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#125'>EXEMPTIONS FROM THE LISTING STANDARDS FOR
    AUDIT COMMITTEES</A></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>187</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#126'>Item 16E.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#126'>PURCHASES OF EQUITY SECURITIES BY THE
    ISSUER AND AFFILIATED PURCHASERS*</A></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>188</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="7">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="7" align="center" valign="top">
    &nbsp;<A HREF='#127'>PART III</A></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#128'>Item 17.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#128'>CONSOLIDATED FINANCIAL STATEMENTS*</A></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>188</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#129'>Item 18.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#129'>CONSOLIDATED FINANCIAL STATEMENTS</A></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>188</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#130'>Item 19.</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    &nbsp;<A HREF='#130'>EXHIBITS</A></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>188</TD>
    <TD>&nbsp;</TD>
</TR>

<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="u92750exv4w45.txt">Ex-4.45 Supply Contract for The Procurement and Installation of Ring JASUKA Backbone between TELKOM and NEC-SIEMENS CONSORTIUM, dated June 10, 2005.</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="u92750exv4w46.txt">Ex-4.46 Supply Contract for Capacity Expansion of Submarine Cable System Tanjung Pandan-Pontianak between TELKOM and NEC Corporation, dated July 2005.</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="u92750exv12w1.htm">EX-12.1 CERTIFICATION PURSUANT TO SECTION 302</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="u92750exv12w2.htm">EX-12.2 CERTIFICATION PURSUANT TO SECTION 302</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="u92750exv13w1.htm">EX-13.1 CERTIFICATION PURSUANT TO SECTION 906</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="u92750exv13w2.htm">EX-13.2 CERTIFICATION PURSUANT TO SECTION 906</A></FONT></TD></TR>
</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<!-- /TOC -->
</DIV>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>*&nbsp;</TD>
    <TD align="left">
    Omitted because the item is not applicable.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">i

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='101'></A>
</DIV>

<!-- link1 "DEFINITIONS" -->

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>DEFINITIONS</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="28%"></TD>
    <TD width="1%"></TD>
    <TD width="71%"></TD>
</TR>

<TR>
    <TD valign="top">
    &#147;ADS&#148;</TD>
    <TD></TD>
    <TD valign="top">
    American Depositary Share, which is a certificate (known as an
    ADR) being traded on a U.S. securities market (such as New York
    Stock Exchange) representing a number of foreign shares. One ADS
    of TELKOM represents 40 of TELKOM&#146;s Series&nbsp;B shares.
    The ratio of shares to ADS is 40:1.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;ADSL&#148;</TD>
    <TD></TD>
    <TD valign="top">
    (Asymmetric Digital Subscriber Line) is a technology that allows
    combinations of services including voice, data and one way full
    motion video to be delivered over existing copper feeder
    distribution and subscriber lines.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;AMPS&#148;</TD>
    <TD></TD>
    <TD valign="top">
    (Advanced Mobile Phone System) is an analog mobile cellular
    system standard.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;ARPU&#148;</TD>
    <TD></TD>
    <TD valign="top">
    (Average Revenue Per User) serves as an evaluation statistic in
    connection with a network operator&#146;s subscriber base. It is
    computed by dividing total revenues (including gross
    interconnection revenues) for a given period by the respective
    average number of subscribers for such period, except that for
    the mobile cellular service, revenues do not include connection
    fees, interconnection revenues, international roaming revenues
    from non-subscribers and dealer discounts.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;ASR&#148;</TD>
    <TD></TD>
    <TD valign="top">
    (Answer to Seizure Ratio). See &#147;call completion rate&#148;.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;ATM&#148;</TD>
    <TD></TD>
    <TD valign="top">
    (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.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;B2B&#148;</TD>
    <TD></TD>
    <TD valign="top">
    (Business-to-Business Electronic Commerce) is a
    technology-enabled application environment to facilitate the
    exchange of business information and automate commercial
    transaction designed to automate and optimize interactions
    between business partners.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;backbone&#148;</TD>
    <TD></TD>
    <TD valign="top">
    refers to the main telecommunications network consisting of
    transmission and switching facilities connecting several network
    access nodes. The transmission links between nodes and switching
    facilities include microwave, submarine cable, satellite,
    optical fiber and other transmission technology.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;bandwidth&#148;</TD>
    <TD></TD>
    <TD valign="top">
    refers to the capacity of a communication link.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;BTS&#148;</TD>
    <TD></TD>
    <TD valign="top">
    (Base Transceiver Station) refers to equipment that transmits
    and receives radio telephony signals to and from other
    telecommunication systems.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;call completion rate&#148;</TD>
    <TD></TD>
    <TD valign="top">
    is 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&#146;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, or &#147;ASR&#148;.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">1

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<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="28%"></TD>
    <TD width="1%"></TD>
    <TD width="71%"></TD>
</TR>

<TR>
    <TD valign="top">
    &#147;capacity utilization&#148;</TD>
    <TD></TD>
    <TD valign="top">
    refers to the ratio of lines in service to local exchange
    capacity or installed lines.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;CDMA&#148;</TD>
    <TD></TD>
    <TD valign="top">
    (Code Division Multiple Access) is a wide-band spread-spectrum
    network technology.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;DCS1800&#148;</TD>
    <TD></TD>
    <TD valign="top">
    (Digital Communication System) is a mobile cellular system using
    GSM technology operating in the 1800 MHz frequency band.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;DGPT&#148;</TD>
    <TD></TD>
    <TD valign="top">
    is the Director General of Post and Telecommunications.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;Directors&#146; Decree on Internal Control&#148;</TD>
    <TD></TD>
    <TD valign="top">
    is the decree of the Board of Directors, dated October&nbsp;29,
    2004, titled &#147;Internal Control over Financial Reporting in
    Compliance with the Sections&nbsp;302 and 404 of the Sarbanes
    Oxley Act of 2002&#148; on certain policies and procedures for
    effective internal controls and good corporate governance and
    early detection of errors, frauds and other misuses&#148;.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;distribution point&#148;</TD>
    <TD></TD>
    <TD valign="top">
    is the point of interconnection between the dropwire and the
    secondary cable running to a cabinet and/or a local exchange.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;DLD&#148;</TD>
    <TD></TD>
    <TD valign="top">
    refers to domestic long-distance telecommunications services
    such as long-distance telephone calls and leased lines services.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;downlink&#148;</TD>
    <TD></TD>
    <TD valign="top">
    refers to the receiving portion of a satellite circuit extending
    from the satellite to the Earth.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;dropwire&#148;</TD>
    <TD></TD>
    <TD valign="top">
    is the wire connecting the subscriber&#146;s premises to the
    distribution point.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;DTR&#148;</TD>
    <TD></TD>
    <TD valign="top">
    (Distributable TELKOM Revenues) is the monthly revenue share
    payable by each KSO Unit to TELKOM under the KSO Agreements,
    being a specified percentage of total KSO revenues in a KSO Unit
    after deduction of specified KSO operating expenses and MTR.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;dualband&#148;</TD>
    <TD></TD>
    <TD valign="top">
    refers to the capability of a mobile cellular network and mobile
    cellular handsets to operate across two frequency bands, for
    example GSM 900 and GSM 1800.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;duopoly system&#148;</TD>
    <TD></TD>
    <TD valign="top">
    is a system allowing only two national operators, which in
    Indonesia&#146;s case are TELKOM and Indosat, to provide fixed
    line telecommunication services including domestic long-distance
    and international long-distance.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;earth station&#148;</TD>
    <TD></TD>
    <TD valign="top">
    is the antenna and associated equipment used to receive or
    transmit telecommunication signals via satellite.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;Erlang&#148;</TD>
    <TD></TD>
    <TD valign="top">
    refers to a unit of measurement of telephone traffic equal to
    one hour of conversation.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;existing installations&#148;</TD>
    <TD></TD>
    <TD valign="top">
    refer to telecommunications facilities, including telephone
    lines, network infrastructure and related assets in existence in
    each KSO Division as of the beginning of each KSO Period plus
    certain facilities and equipment constructed or installed by
    TELKOM in the KSO Units after such dates to be managed by a KSO
    Investor.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">2

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="28%"></TD>
    <TD width="1%"></TD>
    <TD width="71%"></TD>
</TR>

<TR>
    <TD valign="top">
    &#147;fixed cellular&#148;</TD>
    <TD></TD>
    <TD valign="top">
    refers to a form of fixed wireless technology which uses
    conventional cellular network configurations to link a
    subscriber at a fixed location to a local exchange.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;fixed line&#148;</TD>
    <TD></TD>
    <TD valign="top">
    refers to fixed wireline and fixed wireless.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;fixed wireless&#148;</TD>
    <TD></TD>
    <TD valign="top">
    refers to a local wireless transmission link using cellular,
    microwave or radio technology to link a subscriber at a fixed
    location to a local exchange.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;fixed wireline&#148;</TD>
    <TD></TD>
    <TD valign="top">
    refers to a fixed path (wire or cable) linking a subscriber at a
    fixed location to a local exchange, usually with an individual
    phone number.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;frame relay&#148;</TD>
    <TD></TD>
    <TD valign="top">
    is a packet-switching protocol (in which messages are divided
    into packets before they are sent) for connecting devices on a
    computer network that spans a relatively large geographical area.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;Government&#148;</TD>
    <TD></TD>
    <TD valign="top">
    refers to the Government of the Republic of Indonesia.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;GPRS&#148;</TD>
    <TD></TD>
    <TD valign="top">
    (General Packet Radio Service) is a data packet switching
    technology that allows information to be sent and received
    across a mobile network and only utilizes the network when there
    is data to be sent.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;GSM&#148;</TD>
    <TD></TD>
    <TD valign="top">
    (Global System for Mobile Telecommunication) is a European
    standard for digital cellular telephone.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;IDD&#148;</TD>
    <TD></TD>
    <TD valign="top">
    (International Direct Dialing) is a service that allows a
    subscriber to make an international call without the assistance
    or intervention of an operator from any telephone terminal.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;installed lines&#148;</TD>
    <TD></TD>
    <TD valign="top">
    refer to complete lines fully built-out to the distribution
    point and ready to be connected to subscribers.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;intelligent network&#148; or &#147;IN&#148;</TD>
    <TD></TD>
    <TD valign="top">
    is a service-independent telecommunications network where the
    logic functions are taken out of the switch and placed in
    computer nodes distributed throughout the network. This provides
    the means to develop and control services more efficiently
    allowing new or advanced telephony services to be introduced
    quickly.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;ISDN&#148;</TD>
    <TD></TD>
    <TD valign="top">
    (Integrated Services Digital Network) is a network that provides
    end-to-end digital connectivity and allows simultaneous
    transmission of voice, data and video and provides high-speed
    Internet connectivity.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;ITRB&#148;</TD>
    <TD></TD>
    <TD valign="top">
    refers to the Indonesian Telecommunications Regulatory Body.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;Kbps&#148;</TD>
    <TD></TD>
    <TD valign="top">
    (Kilobits per second) is a measure of speed for digital signal
    transmission expressed in thousands of bits per second.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;KSO&#148;</TD>
    <TD></TD>
    <TD valign="top">
    (Kerjasama Operasi) or Joint Operating Scheme, is a unique type
    of Build, Operate and Transfer arrangement with a consortium of
    partners in which the consortium invests and operates TELKOM
    facilities in regional divisions. The consortium partners are
    owned by international operators and private domestic companies,
    or in cases where TELKOM has acquired the consortium partner, by
    TELKOM.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">3

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<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="28%"></TD>
    <TD width="1%"></TD>
    <TD width="71%"></TD>
</TR>

<TR>
    <TD valign="top">
    &#147;KSO Agreements&#148;</TD>
    <TD></TD>
    <TD valign="top">
    refer to the agreements, as amended from time to time, governing
    the operation of the network in the relevant KSO region for the
    KSO Period.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;KSO Period&#148;</TD>
    <TD></TD>
    <TD valign="top">
    refers to period covered by the KSO Agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;KSO Unit&#148;</TD>
    <TD></TD>
    <TD valign="top">
    refers to a regional division of TELKOM managed and
    operated&nbsp;&#151; pursuant to the relevant KSO Agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;leased line&#148;</TD>
    <TD></TD>
    <TD valign="top">
    is a dedicated telecommunications transmissions line linking one
    fixed point to another, rented from an operator for exclusive
    use.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;lines in service&#148;</TD>
    <TD></TD>
    <TD valign="top">
    refer to revenue-generating lines connected to subscribers,
    including payphones, but not including mobile cellular
    subscribers or lines used internally by TELKOM.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;local call&#148;</TD>
    <TD></TD>
    <TD valign="top">
    is the call among subscribers in the same numbering area without
    any prefix number being required.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;local exchange capacity&#148;</TD>
    <TD></TD>
    <TD valign="top">
    refers to the aggregate number of lines at a local exchange
    connected and available for connection to outside plant.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;MHz&#148;</TD>
    <TD></TD>
    <TD valign="top">
    (Megahertz) is a unit of measure of frequency. 1&nbsp;MHz is
    equal to one million cycles per second.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;microwave transmission&#148;</TD>
    <TD></TD>
    <TD valign="top">
    is a transmission consisting of electromagnetic waves in the
    radio frequency spectrum above 890&nbsp;million cycles per
    second and below 20&nbsp;billion cycles per second.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;MoC&#148;</TD>
    <TD></TD>
    <TD valign="top">
    (Ministry of Communication). See &#147;MoCI&#148;.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;MoCI&#148;</TD>
    <TD></TD>
    <TD valign="top">
    refers to the Ministry of Communication and Information, to
    which telecommunications regulatory responsibility was
    transferred from the MoC in February 2005.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;Modern License&#148;</TD>
    <TD></TD>
    <TD valign="top">
    is an operational license, contemplated in the Telecommunication
    Law, which replaces the existing operational license for basic
    telecommunications services.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;MoF&#148;</TD>
    <TD></TD>
    <TD valign="top">
    refers to the Ministry of Finance.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;MTR&#148;</TD>
    <TD></TD>
    <TD valign="top">
    (Minimum TELKOM Revenues) is the specified minimum amount
    payable monthly by each KSO Unit to TELKOM under the KSO
    Agreements.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;NMT-450&#148;</TD>
    <TD></TD>
    <TD valign="top">
    (Nordic Mobile Telephone) is a form of analog mobile cellular
    service primarily installed in vehicles.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;optical fiber&#148;</TD>
    <TD></TD>
    <TD valign="top">
    refers to cables using optical fiber and laser technology
    whereby modulating light beams representing data are transmitted
    through thin filaments of glass.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;outside plant&#148;</TD>
    <TD></TD>
    <TD valign="top">
    is the equipment and facilities used to connect subscriber
    premises to the local exchange.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;PBH&#148; or &#147;Revenue-Sharing Arrangement&#148;</TD>
    <TD></TD>
    <TD valign="top">
    (Pola Bagi Hasil) is a type of Build, Operate and Transfer
    arrangement scheme between TELKOM and domestic private
    companies. Under this scheme the private company invests in the
    telecommunication facilities to be operated by TELKOM.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">4

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<TR>
    <TD width="28%"></TD>
    <TD width="1%"></TD>
    <TD width="71%"></TD>
</TR>

<TR>
    <TD valign="top">
    &#147;PPLT&#148;</TD>
    <TD></TD>
    <TD valign="top">
    refers to Penyediaan dan Pengembangan Layanan Telekomunikasi or
    Provision and Development of Telecommunications Services program
    established by TELKOM to provide telecommunication
    infrastructure to certain regions where telecommunication
    services are not available.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;PSDN&#148;</TD>
    <TD></TD>
    <TD valign="top">
    (Packet Switched Data Networks) is a network using a switch
    device and sending packets of data through the network to some
    remote location.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;PSTN&#148;</TD>
    <TD></TD>
    <TD valign="top">
    (Public Switched Telephone Network) is a telephone network
    operated and maintained by TELKOM and the KSO Units for and on
    behalf of TELKOM.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;RSA&#148;</TD>
    <TD></TD>
    <TD valign="top">
    refers to the Revenue Sharing Agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;RUIM&#148; or &#147;RUIMcard&#148;</TD>
    <TD></TD>
    <TD valign="top">
    (Removable User Identity Module) is a &#147;smart&#148; card
    designed to be inserted into a fixed wireless telephone that
    uniquely identifies a CDMA network subscription and that
    contains subscriber-related data such as phone numbers, service
    details and memory for storing messages.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;satellite transponder&#148;</TD>
    <TD></TD>
    <TD valign="top">
    is the radio relay equipment embedded on a satellite that
    receives signals from earth and amplifies and transmits the
    signal back to earth.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;SIM&#148; or &#147;SIMcard&#148;</TD>
    <TD></TD>
    <TD valign="top">
    (Subscriber Identity Module) is a &#147;smart&#148; card
    designed to be inserted into a mobile cellular telephone that
    uniquely identifies a GSM network subscription and that contains
    subscriber-related data such as phone numbers, service details
    and memory for storing messages.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;SMS&#148;</TD>
    <TD></TD>
    <TD valign="top">
    Short Messaging Service, a technology allowing the exchange of
    text messages between mobile cellular phones and between fixed
    wireless phones.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;switch&#148;</TD>
    <TD></TD>
    <TD valign="top">
    is a mechanical, electrical or electronic device that opens or
    closes circuits, completes or breaks an electrical path, or
    selects paths or circuits, used to route traffic in a
    telecommunications network.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;trunk exchange&#148;</TD>
    <TD></TD>
    <TD valign="top">
    is a switch that has the function of connecting one telephony
    switch to another telephony switch, which can be either a local
    or trunk switch.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;USO&#148;</TD>
    <TD></TD>
    <TD valign="top">
    (Universal Service Obligation) is the service obligation imposed
    by the Government on all providers of telecommunications
    services for the purpose of providing public services in
    Indonesia.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;VoIP&#148;</TD>
    <TD></TD>
    <TD valign="top">
    (Voice over Internet Protocol) is a means of sending voice
    information using the Internet Protocol.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;VPN&#148;</TD>
    <TD></TD>
    <TD valign="top">
    (Virtual Private Network) is a secure private network
    connection, built on top of publicly-accessible infrastructure,
    such as the Internet or the public telephone network. VPNs
    typically employ some combination of encryption, digital
    certificates, strong user authentication and access control to
    provide secur-</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">5

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<TR>
    <TD width="28%"></TD>
    <TD width="1%"></TD>
    <TD width="71%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    ity to the traffic they carry. They usually provide connectivity
    to many machines behind a gateway or firewall.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;VSAT&#148;</TD>
    <TD></TD>
    <TD valign="top">
    (Very Small Aperture Terminal) is a relatively small antenna,
    typically 1.5 to 3.0 meters in diameter, placed in the
    user&#146;s premises and used for two-way communications by
    satellite.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;WAP&#148;</TD>
    <TD></TD>
    <TD valign="top">
    (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 e-mail, Web
    sites, financial information, on-line banking, information and
    entertainment (infotainment), games and micro payments.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    &#147;WLL&#148;</TD>
    <TD></TD>
    <TD valign="top">
    (Wireless Local Loop) is a means of providing local loop (the
    physical connection from the subscriber&#146;s premises to the
    carrier&#146;s point of presence or POP) facility without wires,
    which allows carriers to provide local loop with approximately 1
    Gbps or more in aggregate bandwidth per coverage area. WLL is
    particularly effective in rocky or soggy terrain.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">6

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='102'></A>
</DIV>

<!-- link1 "FORWARD LOOKING STATEMENTS" -->

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>FORWARD LOOKING STATEMENTS</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This document contains certain forward looking statements within
the meaning of Section&nbsp;27A of the Securities Act of 1933,
as amended (the &#147;Securities Act&#148;) and Section&nbsp;21E
of the Securities Exchange Act of 1934, as amended (the
&#147;Exchange Act&#148;) and the Private Securities Litigation
Reform Act of 1995, with respect to the financial condition,
results of operations and business of Perusahaan Perseroan
(Persero) P.T.&nbsp;Telekomunikasi Indonesia Tbk.
(&#147;TELKOM&#148; or the &#147;Company&#148;) and its
subsidiaries and certain plans and objectives of the Company or
the Company and its subsidiaries, wherever applicable, with
respect to these items&nbsp;&#151; in particular, among other
statements, certain statements in Item&nbsp;5. &#147;Operating
and Financial Review and Prospects&#148; including, without
limitation, those concerning the Company&#146;s expectations and
plans, strategy, management&#146;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 the
Company&#146;s operations, performance and financial condition.
Such statements can be generally identified by the use of terms
such as &#147;believes,&#148; &#147;expects,&#148;
&#147;may,&#148; &#147;will,&#148; &#147;would,&#148;
&#147;could,&#148; &#147;plans,&#148; or
&#147;anticipates,&#148; and the negatives of such terms or
comparable terms. By their nature, forward looking statements
involve risk and uncertainty 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 differ materially from those expressed or
implied by these forward looking statements. Important
information regarding risks and uncertainty is set forth
elsewhere in this annual report, including in Item&nbsp;3.
&#147;Key Information&nbsp;&#151; D. Risk Factors,&#148;
Item&nbsp;5. &#147;Operating and Financial Review and
Prospects&nbsp;&#151; E. Off-Balance Sheet Arrangements,&#148;
Item&nbsp;5. &#147;Operating and Financial Review and
Prospects&nbsp;&#151; F. Tabular Disclosure of Contractual
Obligations&#148; and Item&nbsp;11. &#147;Quantitative and
Qualitative Disclosures About Market Risk&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='103'></A>
</DIV>

<!-- link1 "CONVENTIONS" -->

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>CONVENTIONS</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In this Annual Report, unless otherwise specified or the context
otherwise requires, all references to &#147;Indonesia&#148; are
references to the Republic of Indonesia and all references to
the &#147;U.S.&#148; and &#147;United States&#148; are
references to the United States of America. All references to
the &#147;Government&#148; herein are references to the
government of the Republic of Indonesia. References herein to
&#147;Rupiah&#148; and &#147;Rp.&#148; are to the lawful
currency of Indonesia and all references to &#147;US
Dollars&#148; or &#147;US$&#148; are to the lawful currency of
the United States of America. For convenience, unless otherwise
specified, certain Rupiah amounts have been translated into US
Dollar amounts, based on the prevailing exchange rate of
Rp.9,830 = US$1.00, being the middle market spot rate of
exchange for Rupiah against US Dollar quoted by Reuters on
December&nbsp;31, 2005. Such translations should not be
construed as representations that the Rupiah or US Dollar
amounts referred to could have been, or could be, converted into
Rupiah or US Dollars, as the case may be, at that or any other
rate or at all. The average middle market spot rate of exchange
for Rupiah against US Dollar quoted by Bank Indonesia on
December&nbsp;31, 2005 was Rp.9,830 to US$1.00. See Item&nbsp;3.
&#147;Key Information&nbsp;&#151; A.&nbsp;Selected financial
data&nbsp;&#151; Exchange Rate Information&#148; for further
information regarding rates of exchange between Rupiah and US
Dollars.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">7

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='104'></A>
</DIV>

<!-- link1 "PART I" -->

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>PART&nbsp;I</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<A name='105'></A>
</DIV>

<!-- link1 "ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS" -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>ITEM&nbsp;1.</B></TD>
    <TD>
    <B>IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Not applicable.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='106'></A>
</DIV>

<!-- link1 "ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE" -->

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>ITEM&nbsp;2.</B></TD>
    <TD>
    <B>OFFER STATISTICS AND EXPECTED TIMETABLE</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Not applicable.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='107'></A>
</DIV>

<!-- link1 "ITEM 3. KEY INFORMATION" -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>ITEM&nbsp;3.</B></TD>
    <TD>
    <B>KEY INFORMATION</B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>A.</B></TD>
    <TD>
    <B>Selected financial data</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM&#146;s consolidated financial statements for the year
2001 were audited by KAP Hans Tuanakotta Mustofa &#38; Halim
(formerly KAP Hans Tuanakotta &#38; Mustofa), the member firm of
Deloitte Touche Tohmatsu in Indonesia (&#147;Deloitte&#148;).
TELKOM&#146;s consolidated financial statements for the year
2002 have been audited by KAP Haryanto Sahari &#38; Rekan
(formerly KAP Drs.&nbsp;Hadi Sutanto &#38; Rekan), the member
firm of PricewaterhouseCoopers in Indonesia (&#147;PwC&#148;).
TELKOM&#146;s consolidated financial statements for the years
2003, 2004 and 2005 have been audited by KAP Siddharta Siddharta
&#38; Widjaja, the member firm of KPMG International in
Indonesia (&#147;KPMG&#148;). KPMG is a Swiss cooperative of
which all firms are members. See Item&nbsp;5. &#147;Operating
and Financial Review and Prospects&nbsp;&#151; A. Operating
Results&nbsp;&#151; Changes in Methods of Accounting under
Indonesian GAAP&#148;. All such consolidated financial
statements were prepared in accordance with Indonesian GAAP,
which differs in certain significant respects from U.S. GAAP.
See Item&nbsp;5. &#147;Operating and Financial Review and
Prospects&nbsp;&#151; A.&nbsp;Operating Results&nbsp;&#151;
Summary of Significant Differences between Indonesian GAAP and
U.S. GAAP&#148; and Note&nbsp;54 to the Company&#146;s
consolidated financial statements, which provide a description
of the significant differences between Indonesian GAAP and U.S.
GAAP and a reconciliation to the amount of U.S. GAAP net income
and stockholders&#146; equity of TELKOM for and as of the end of
each of the periods indicated in the consolidated financial
statements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For the year 2005, 9 companies were consolidated into
TELKOM&#146;s consolidated financial statements, namely: PT
AriaWest International (&#147;AriaWest&#148;, 100% owned by
TELKOM), PT Multimedia Nusantara (&#147;Metra&#148;, 100%), PT
Graha Sarana Duta (&#147;GSD&#148;, 100%), PT Pramindo Ikat
Nusantara (&#147;Pramindo&#148;, 100%), PT&nbsp;Indonusa
Telemedia (&#147;Indonusa&#148;, 96%), PT Dayamitra
Telekomunikasi (&#147;Dayamitra&#148;, 100%),
PT&nbsp;Telekomunikasi Selular (&#147;Telkomsel&#148;, 65%), PT
Napsindo Primatel Internasional (&#147;Napsindo&#148;, 60%) and
PT Infomedia Nusantara (&#147;Infomedia&#148;, 51%). In addition
to those companies, for the years 2003 and 2004, TELKOM
consolidated the financial statements of PT Pro Infokom
Indonesia (&#147;PII&#148;, 51% owned by TELKOM). In 2004,
TELKOM increased its ownership interest in Dayamitra from 90% to
100%. In 2005, TELKOM increased its ownership interest in
Indonusa from 90% to 96%. See Item&nbsp;4, &#147;Information on
the Company&nbsp;&#151; C. Business and Organizational
Structure&nbsp;&#151; Information on Subsidiaries and Associated
Companies&#148; and Note&nbsp;1c to TELKOM&#146;s consolidated
financial statements.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">8

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following tables set forth a summary of the financial
information of TELKOM as of and for the years specified. This
information should be read in conjunction with Item&nbsp;5.
&#147;Operating and Financial Review and Prospects&#148; and is
qualified in its entirety by reference to TELKOM&#146;s
consolidated financial statements and the related notes thereto
included elsewhere in this Annual Report.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 7.0pt;">
    <TD colspan="5">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>Year Ended December 31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="5">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="5">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="5">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2001</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(As Restated)<SUP style="font-size: 85%; vertical-align: text-top">(6)</SUP></B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="5">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="5">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(US$</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="5">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>(Rp. in billion, except for data relating to shares, dividends and ADS)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>million,</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="5">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>except for</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="5">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>data relating</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="5">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>to shares,</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="5">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>dividends</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="5">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>and ADS)<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="5" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Consolidated Income Statement Data</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="5" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Indonesian GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="5" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    OPERATING REVENUES</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Telephone</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fixed lines</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Local and domestic long-distance usage</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,226</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,448</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,562</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,439</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,223</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>735</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Monthly subscription charges</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>998</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,475</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,949</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,935</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,290</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>335</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Installation charges</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>98</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>130</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>223</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>201</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>197</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Others</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>93</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>211</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>163</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>71</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="5">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total fixed lines revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,415</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,264</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,897</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,645</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,781</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,097</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="5">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cellular</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Air time charges</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,988</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,454</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,678</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,826</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,666</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,390</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Monthly subscription charges</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>581</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>593</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>581</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>448</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>384</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Features</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>91</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>457</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Connection fee charges</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>129</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>172</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>194</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>56</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>64</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="5">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total cellular revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,708</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,227</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,459</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,421</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,571</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,482</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="5">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total telephone revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,123</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,491</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,356</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,066</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,352</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,579</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="5">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Joint Operation Schemes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Minimum TELKOM Revenues (MTR)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,474</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,320</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>900</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>296</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>269</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Share in Distributable KSO Revenues (DKSOR)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>733</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>801</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>583</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>350</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>319</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of unearned initial investor payments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="5">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total revenue under Joint Operation Schemes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,220</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,128</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,486</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>657</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>589</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>60</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interconnection</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,424</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,831</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,162</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,188</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,742</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>788</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Network</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>415</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>316</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>518</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>654</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>587</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>59</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Data and Internet</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>673</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,552</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,109</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,809</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,934</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>705</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenue-Sharing Arrangements</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>264</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>264</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>258</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>281</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>302</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other telecommunications services</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>165</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>221</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>227</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>293</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>301</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="5">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Operating Revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,284</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,803</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27,116</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,948</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41,807</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,253</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="5">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">9

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9.0pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="26%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>Year Ended December 31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2001</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(As Restated)<SUP style="font-size: 85%; vertical-align: text-top">(6)</SUP></B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(US$</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>(Rp. in billion, except for data relating to shares, dividends and ADS)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>million,</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>except for</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>data relating</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>to shares,</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>dividends</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>and ADS)<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    OPERATING EXPENSES</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Personnel</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,281</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,388</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,440</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,910</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,563</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>668</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,870</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,474</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,779</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,438</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,571</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>770</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operations, maintenance and telecommunication services</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,150</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,290</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,339</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,530</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,916</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>602</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    General and administrative</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,343</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,146</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,079</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,600</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,764</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>281</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Marketing</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>220</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>375</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>503</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>882</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,126</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>114</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Write-down of assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>617</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>63</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss on procurement commitments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>79</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Operating Expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,864</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,673</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,140</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,360</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,636</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,506</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating Income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,420</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,130</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,976</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,588</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,171</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,747</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other income (expenses)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Gain on sale of long-term investment in Telkomsel</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,196</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,330</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,583</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,383</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,270</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,177</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(120</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>572</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>480</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>366</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>318</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>345</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Gain (loss)&nbsp;on foreign exchange&nbsp;&#151; net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(379</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>557</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>126</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,221</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(517</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(53</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity in net income (loss)&nbsp;of associated companies</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(86</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Others&nbsp;&#151; net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>353</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(36</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>364</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>331</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>409</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>42</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other Income (Expenses)&nbsp;&#151; net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(870</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,619</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(524</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,839</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(929</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(95</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income Before Tax</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,550</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,749</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,452</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,749</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,242</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,652</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Tax expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,007</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,899</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,861</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,178</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,184</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(527</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income before minority interest in net income of subsidiaries</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,543</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,850</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,591</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,571</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,058</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,125</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Minority interest in net income of subsidiaries, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(475</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(810</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,504</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,956</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,064</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(312</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net Income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,068</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,040</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,087</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,615</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,994</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>813</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Weighted average shares outstanding (millions)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,160</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,160</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,160</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,160</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,160</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income per share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>201.81</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>398.80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>301.95</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>328.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>396.51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.04</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income per ADS</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,072.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,951.80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,077.83</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,124.14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,860.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.61</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dividends declared per
    share<SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44.08</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>105.41</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>165.58</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>158.09</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>144.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.01</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.
    GAAP<SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,298</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,587</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,791</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,468</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,840</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>798</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income per share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>213.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>425.96</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>287.23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>320.86</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>388.89</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.04</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income per ADS</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,528.17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,038.21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,489.40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,834.47</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,555.74</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.58</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">10

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="28%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>As of December 31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2001</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(As Restated)<SUP style="font-size: 85%; vertical-align: text-top">(6)</SUP></B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center"><B>(US$ million)<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap><B>(Rp. in billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Consolidated Balance Sheet Data</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Indonesian GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,036</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44,307</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,283</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>56,179</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>62,171</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,325</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current
    liabilities<SUP style="font-size: 85%; vertical-align: text-top">(4)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,543</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,708</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,170</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,677</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,513</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,375</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,447</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,383</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,258</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,222</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,728</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>786</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term debts</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,730</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,834</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,214</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,332</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,153</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,720</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27,097</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,262</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,113</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32,573</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,314</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Minority interest</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,235</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,596</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,708</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,938</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,305</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>641</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capital
    stock<SUP style="font-size: 85%; vertical-align: text-top">(5)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,040</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,040</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,040</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,040</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,040</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>513</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total stockholders&#146; equity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,081</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,614</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,313</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,128</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23,292</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,370</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.
    GAAP<SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32,449</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44,623</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>51,347</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>56,702</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>63,481</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,440</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total stockholders&#146; equity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,766</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,911</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,285</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,571</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,568</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,499</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    The translations of Rupiah amounts into US Dollars are included
    solely for the convenience of the readers and have been made
    using the average of the market buy and sell rates of Rp.9,830
    to US$1 published by Reuters on December&nbsp;31, 2005. The
    convenience translations should not be construed as
    representations that the Rupiah amounts have been, could have
    been, or can in the future be, converted into US Dollars at this
    or any other rate of exchange.</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Dividends declared per share in 2001, 2002 and 2003 represent
    dividends per share after adjusting for the stock split that was
    effected in 2004. Dividends declared per share in 2004 comprised
    cash dividends for 2003 of Rp.150.98 per share and interim cash
    dividends declared in December 2004 of Rp.7.11 per share.
    Dividends declared per share in 2005 represent cash dividends
    for 2004 of Rp.152.01 per share deducted by interim cash
    dividends declared in 2004 of Rp.7.11 per share.</TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    U.S. GAAP amounts reflect adjustments resulting from differences
    in the accounting treatment of termination benefits, foreign
    exchange differences capitalized to property under construction,
    interest capitalized on property under construction,
    revenue-sharing arrangements, employee benefit plans, equity in
    net income or loss of associated companies, land rights, revenue
    recognition, goodwill, capital leases, acquisition of Dayamitra,
    reversal of difference due to change of equity in associated
    companies, asset retirement obligations, and deferred income
    taxes. See Item&nbsp;5. &#147;Operating and Financial Review and
    Prospects&nbsp;&#151; A.&nbsp;Operating Results&nbsp;&#151;
    Summary of Significant Differences between Indonesian GAAP and
    U.S. GAAP&#148; and Note&nbsp;54 to the consolidated financial
    statements.</TD>
</TR>

<TR valign="top">
    <TD>(4)&nbsp;</TD>
    <TD align="left">
    Includes current maturities of long-term debts.</TD>
</TR>

<TR valign="top">
    <TD>(5)&nbsp;</TD>
    <TD align="left">
    As of December&nbsp;31, 2004 and 2005, Issued and Paid-Up
    Capital Stock consists of one Series&nbsp;A Dwiwarna share
    having a par value of Rp.250 and 20,159,999,279 Series&nbsp;B
    shares having a par value of Rp.250 from an authorized capital
    stock comprising one Series&nbsp;A Dwiwarna share and
    79,999,999,999 Series&nbsp;B shares.</TD>
</TR>

<TR valign="top">
    <TD>(6)&nbsp;</TD>
    <TD align="left">
    The 2004 consolidated financial statements have been restated to
    reflect the adoption of PSAK No.&nbsp;24 (Revised 2004),
    &#147;Employee Benefits&#148; (&#147;PSAK&nbsp;24R&#148;). See
    Note&nbsp;4a to the consolidated financial statements. See
    Item&nbsp;5. &#147;Operating and Financial Review and
    Prospects&nbsp;&#151; A. Operating Results&nbsp;&#151; Changes
    in Methods of Accounting under Indonesian GAAP&#148;.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">11

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Exchange Rate Information</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table shows the exchange rate of Rupiah to US
Dollar based on the middle exchange rates at the end of each
month for the periods indicated. The Rupiah middle exchange rate
is calculated based on Bank Indonesia buying and selling rates.
No representations are made that the Rupiah or US&nbsp;Dollar
amounts referred to herein could have been or could be converted
into US&nbsp;Dollar or Rupiah, as the case may be, at any
particular rate or at all.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="46%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2" align="center" nowrap><B>Year</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>At period end</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Average<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>High<SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Low<SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap><B>(Rp. Per US$1.00)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2001</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,266</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,675</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,865</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    First Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,895</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,450</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Second Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,440</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,391</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,440</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,058</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,675</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,355</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,675</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,350</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fourth Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,422</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,435</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,400</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2002</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,940</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,316</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,473</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,460</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    First Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,655</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,192</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,473</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,542</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Second Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,730</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,109</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,775</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,460</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,015</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,949</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,218</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,695</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fourth Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,940</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,058</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,326</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,815</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,465</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,573</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,120</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,165</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    First Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,919</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,907</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,120</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,836</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Second Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,285</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,488</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,906</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,165</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,389</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,427</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,665</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,166</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fourth Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,465</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,471</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,583</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,365</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2004</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,290</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,935</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,430</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,323</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    First Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,587</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,465</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,465</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,323</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Second Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,415</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,992</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,430</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,574</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,170</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,151</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,389</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,825</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fourth Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,290</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,126</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,355</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,960</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,830</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,711</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,133</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    First Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,480</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,276</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,520</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,133</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Second Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,713</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,548</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,755</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,435</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,310</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,735</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fourth Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,830</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,992</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,300</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,735</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2006</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    January</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,395</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,493</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,795</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,355</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    February</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,230</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,253</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,335</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,200</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    March</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,075</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,172</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,370</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,030</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    April</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,775</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,937</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,045</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,775</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    May</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,220</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,985</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,320</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,720</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    The average of the middle exchange rate announced by Bank
    Indonesia applicable for the period.</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    The high and low amounts are determined based upon the daily
    middle exchange rate announced by Bank Indonesia during the
    applicable period.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 8.0pt;color: #000000; background: #ffffff;">
<I>Source: Bank Indonesia</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;
The exchange rates used for translation of monetary assets and
liabilities denominated in foreign currencies are the buy and
sell rates published by Reuters in 2003, 2004 and 2005. The
Reuters buy and sell rates, applied respectively to monetary
assets and liabilities, were Rp.8,430 and Rp.8,450 to US$1 as
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
of December&nbsp;31, 2003, Rp.9,280 and Rp.9,300 to US$1 as of
December&nbsp;31, 2004 and Rp.9,825 and Rp.9,835 to US$1 as of
December&nbsp;31, 2005. The Company does not guarantee that
assets and liabilities denominated in foreign currencies can be
converted into Indonesian Rupiah at the rates of exchange as of
December&nbsp;31, 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The consolidated financial statements are stated in Rupiah. The
translations of Rupiah amounts into US Dollars are included
solely for the convenience of the readers and have been made
using the average of the market buy and sell rates of Rp.9,830
to US$1 published by Reuters on December&nbsp;31, 2005. The
convenience translations should not be construed as
representations that the Rupiah amounts have been, could have
been, or can in the future be, converted into US Dollars at this
or any other rate of exchange.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capitalization and
Indebtedness</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Not applicable.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reason for the Offer and Use
of Proceeds</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Not applicable.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>D.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Risk Factors</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>TELKOM had a number of material weaknesses in its internal
    control over financial reporting as of December&nbsp;31, 2003,
    2004 and 2005 and TELKOM concluded that as of December&nbsp;31,
    2005 its disclosure controls were not effective, which could
    cause investors to lose confidence in its reported financial
    results and have an adverse effect on the trading price of its
    securities.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reportable conditions (as defined under standards established by
the American Institute of Certified Public Accountants) relating
to TELKOM&#146;s internal control over financial reporting (as
defined in
Rules&nbsp;<FONT style="white-space: nowrap">13a-15(f)</FONT>
and <FONT style="white-space: nowrap">15d-15(f)</FONT> of the
Exchange Act) were identified and communicated by KPMG in
connection with its audits of the consolidated financial
statements as of and for the years ended December&nbsp;31, 2003,
2004 and 2005. As part of its communications, KPMG informed the
Audit Committee that it had identified &#147;reportable
conditions&#148; each of which constituted a &#147;material
weakness&#148; (as&nbsp;each such term is defined under
standards established by the American Institute of Certified
Public Accountants) in TELKOM&#146;s internal control over
financial reporting. TELKOM&#146;s principal executive officer
and principal financial officer concluded that because of the
&#147;material weaknesses&#148; identified, TELKOM&#146;s
disclosure controls and procedures as of December&nbsp;31, 2003,
2004, and 2005 were not effective to ensure that information
required to be disclosed in the reports that TELKOM files and
submits under the Exchange Act is recorded, processed,
summarized and reported as and when required, and is accumulated
and communicated to TELKOM&#146;s management, including
TELKOM&#146;s principal executive officer and principal
financial officer, to allow timely decisions regarding required
disclosure. See Item&nbsp;15. &#147;Control and Procedures&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Since November 2003, TELKOM has been working to improve its
internal control over financial reporting, including those
needed to enable it to comply with Section&nbsp;404 of the
Sarbanes-Oxley Act of 2002, as well as its disclosure controls
and procedures, and has taken a number of steps to address these
issues. See Item&nbsp;15. &#147;Control and Procedures&#148;.
TELKOM cannot provide any assurance that the steps that it has
taken and is continuing to take will result in all material
weaknesses being eliminated. TELKOM expects that its internal
controls over financial reporting and disclosure controls and
procedures will continue to evolve in the future. Any control
system, regardless of how well designed, operated and evaluated,
can provide only reasonable, not absolute, assurance that its
objectives will be met. Any failure to implement required new or
improved controls, or difficulties encountered in their
implementation, could adversely affect TELKOM&#146;s ability to
report financial results on a timely and accurate basis or cause
TELKOM to fail to meet its reporting obligations. Inadequate
internal controls over financial reporting or disclosure
controls and procedures could also cause investors to lose
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
confidence in TELKOM&#146;s reported financial information,
which could have an adverse effect on the trading price of
TELKOM&#146;s securities.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Risks Relating to Indonesia</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Current political and social events in Indonesia may
    adversely impact business activity in Indonesia.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Since 1998, Indonesia has experienced a process of democratic
change, resulting in political and social events that have
highlighted the unpredictable nature of Indonesia&#146;s
changing political landscape. These events have resulted in
political instability, as well as general social and civil
unrest on a number of occasions in the past few years. For
example, in June 2001, demonstrations and strikes affected at
least 19&nbsp;cities after the Government mandated a 30%
increase in fuel prices. Similar demonstrations occurred in
January 2003, when the Government again tried to increase fuel
prices, as well as electricity and telephone charges. In both
instances, the Government was forced to drop or substantially
reduce such proposed increases. In October 2005 following
substantial increases in the market price of crude oil, the
Government raised fuel prices by approximately 80%, which also
led to numerous demonstrations and strikes.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Actions by separatist movements and clashes between religious
and ethnic groups have also resulted in social and civil unrest
in parts of Indonesia. In the province of Papua (formerly Irian
Jaya), there have been numerous clashes between supporters of
separatist movements and the Indonesian military. In the
provinces of Maluku and Central Sulawesi (Poso), clashes between
religious groups have resulted in thousands of casualties and
displaced persons in recent years. The Government has attempted
to resolve problems in these troubled regions with limited
success.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Political and related social developments in Indonesia have been
unpredictable in the past and there can be no assurance that
social and civil disturbances will not occur in the future and
on a wider scale, or that any such disturbances will not,
directly or indirectly, have a material adverse effect on us or
on an investment in the ADSs or Common Stock. Further, these
social and civil disturbances could continue to have a material
adverse effect on investment and confidence in and the
performance of the Indonesian economy and in turn our business.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Terrorist activities in Indonesia could destabilize
    Indonesia, which could adversely affect TELKOM&#146;s
    business.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Bombings have occurred in recent years, at government buildings,
foreign diplomatic facilities, night clubs and other locations,
including the Jakarta Stock Exchange building, the Police
Function Building in Jakarta, the departure lounge of
Jakarta&#146;s Soekarno-Hatta International Airport, the
parliament building in Jakarta and a shopping mall in Jakarta. A
bombing campaign struck religious buildings throughout Indonesia
in 2000. On October&nbsp;12, 2002, over 200 people were killed
in a bombing at a tourist area in Bali. This terrorist attack
resulted in a significant decline in international tourism. On
August&nbsp;5, 2003 a bomb exploded at the J.W.&nbsp;Marriott
Hotel in Jakarta killing at least 12&nbsp;people and injuring
more than 150 people. On September&nbsp;9, 2004, a bomb exploded
outside the Australian Embassy in Jakarta&#146;s central
business district, killing at least nine people and injuring
over 180 people. On May&nbsp;28, 2005, two bombs exploded in a
crowded market in Tentena in central Indonesia, killing at least
20&nbsp;people and injuring at least 40. In October 2005,
multiple bombs exploded in two locations in Bali, killing
22&nbsp;people and injuring at least 50. Indonesian and United
States government officials have indicated that some of these
bombings may be the responsibility of Jemaah Islamiya, a
Southeast Asian-based terrorist network allegedly linked to the
international terrorist organization,
<FONT style="white-space: nowrap">Al-Qaeda.</FONT> In May 2005,
the United States also closed its embassy in Indonesia for a few
days following an unspecified threat.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
There can be no assurance that further terrorist acts will not
occur in the future. A number of governments have from time to
time issued warnings to their citizens in relation to a
perceived increase in the possibility of terrorist activities in
Indonesia, targeting foreign, particularly United States,
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">14

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
interests. Such acts could destabilize Indonesia and increase
internal divisions within the Government as it considers
responses to such instability and unrest. Violent acts arising
from and leading to instability and unrest have in the past had,
and could continue to have, a material adverse effect on
investment and confidence in, and the performance of, the
Indonesian economy and our business.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Declines or volatility in Indonesia&#146;s currency
    exchange rates can have a material adverse impact on business
    activity in Indonesia.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Government&#146;s exchange rate policies and any future
changes in the value of the Rupiah against the US&nbsp;Dollar or
other currencies could adversely affect TELKOM&#146;s financial
condition and results of operations. On August&nbsp;14, 1997,
Bank Indonesia permitted the exchange rate for the Rupiah to
float without announcing a level at which it would intervene.
From August 1997 to mid-1998, the month-end value of the Rupiah
relative to the US&nbsp;Dollar declined from approximately
Rp.2,600 per US&nbsp;Dollar to as low as approximately Rp.15,000
per US&nbsp;Dollar. There can be no assurance that: (a)&nbsp;the
Rupiah will not be subject to continued depreciation or
volatility; (b)&nbsp;the current exchange rate policy will
remain the same; (c)&nbsp;the Government will act when necessary
to stabilize, maintain or increase the value of the Rupiah, or
that any such action, if taken, will be successful.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Continued depreciation or volatility of the Rupiah against the
US Dollar or other currencies could adversely affect general
economic conditions in Indonesia. Rupiah depreciation would also
drive up the Rupiah cost of TELKOM&#146;s capital expenditure
program since most of the equipment to be used in the expansion
of TELKOM&#146;s network capacity is sourced off-shore and
priced in foreign currencies, mainly in US Dollars and Euros,
while almost all of TELKOM&#146;s revenues are in Rupiah.
Changes in the current exchange rate policy may result in
significantly higher domestic interest rates, liquidity
shortages, capital or exchange controls or the withholding of
additional financial assistance by multilateral institutions.
The foregoing consequences, if they occur, could have a material
adverse effect on TELKOM&#146;s business. As of
December&nbsp;31, 2005, the average exchange rate of Rupiah to
US Dollar, based on the Reuters middle buy and sell rates, was
Rp.9,830 per US Dollar.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Fluctuations in the exchange rate between the Rupiah and the US
Dollar could adversely affect, among other things, the Rupiah
cost of Telkom&#146;s network equipment purchases, the dollar
value of any amounts a holder or beneficial owner of ADSs will
receive in the event we issue dividends, the US&nbsp;Dollar
value of the proceeds a holder or beneficial owner would receive
upon the sale in Indonesia of shares of the Common Stock and the
secondary market price of the ADSs.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Indonesia ended its Extended Financing Facility with the
    International Monetary Fund and the consequences thereof are
    unpredictable.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In December 2003, the Government ended its Extended Financing
Facility (&#147;EFF&#148;) program with the International
Monetary Fund (&#147;IMF&#148;) and began to drawdown on its
gross foreign reserves, as well as on its outstanding balances
at the IMF. Considering the Government&#146;s current fiscal
deficit and modest foreign exchange reserves, the end of the EFF
has raised concerns about the ability of the Government to fund
subsidies for staples such as food and fuel, which, in turn,
could have extremely serious political and social consequences.
The end of the EFF also brings with it the end of the
Government&#146;s ability to reschedule Indonesia&#146;s Paris
Club bilateral foreign loans. Other consequences of ending the
EFF are not known at this stage. While the Government has sought
to address these concerns by issuing a White Paper setting forth
its fiscal strategy and policy objectives for 2004, there can be
no assurance that the Government&#146;s strategy will be
successful or that its objectives will be met in full or in part.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Indonesia no longer has access to the Paris Club but
    continues to rely on loans from the World Bank and the Asian
    Development Bank.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Since the financial crisis of 1997, the members of the Paris
Club have been an important source of funding for the
Government. The Paris Club is an informal voluntary group of
19&nbsp;creditor countries
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
that coordinates solutions for payment difficulties experienced
by debtor nations. The last debt rescheduling took place in
April 2002 when the Paris Club rescheduled approximately
US$5.4&nbsp;billion of principal and interest due from the
Government between April 2002 and December 2003. This was done
by extending the period within which the amounts could be repaid.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition to the Paris Club, the World Bank and the Asian
Development Bank have been major sources of financing.
Disbursements from these sources have been slower than expected
in recent years due to the slow pace of institutional reforms in
Indonesia and concerns regarding the Government&#146;s
decentralization plan. As of the date of this Annual Report,
regional governments in Indonesia are not allowed to borrow in
foreign currency and any change to Indonesian law allowing them
to borrow in foreign currency could be a source of potential
debt service problems. The World Bank and Asian Development Bank
lending programs are subject to regular compliance reviews and
can be reduced or withdrawn at any time. The impact of any
elimination of lending cannot be assessed but is likely to be
materially adverse.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Indonesia&#146;s high level of sovereign debts may result
    in it being unable to service its debt obligations when they
    become due.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Indonesia&#146;s high level of sovereign debts has forced it to
negotiate with its major creditors several times since the 1997
financial crisis. For example, the Government held a round of
talks with the Paris Club donor countries and the IMF in April
2002 to discuss the rescheduling of Indonesia&#146;s debt due in
2002. In these talks, the Government sought to restructure not
just debt principal, but interest payments as well, totaling
US$2.6&nbsp;billion. The meeting resulted in the rescheduling of
debt principal payments only, but no assurance can be given as
to Indonesia&#146;s capacity to meet these rescheduled debt
payments. While no further rescheduling has taken place, future
decisions to renegotiate Indonesia&#146;s existing sovereign
indebtedness cannot be ruled out. Such decisions may affect
Indonesia&#146;s sovereign credit rating and could have a
material adverse impact on investor confidence in Indonesia.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Indonesia&#146;s sovereign debt rating continues to be
    reviewed and revised by international rating agencies.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Beginning in 1997, certain recognized statistical rating
organizations, including Moody&#146;s Investors Service, Inc.
(&#147;Moody&#146;s&#148;) and Standard &#38; Poor&#146;s Rating
Services (&#147;S&#38;P&#148;), downgraded Indonesia&#146;s
sovereign rating and the credit ratings of various credit
instruments of the Government and a large number of Indonesian
banks and other companies. &#147;The Government&#146;s long-term
foreign currency debt was rated B1 by Moody&#146;s as of
May&nbsp;19, 2006, rated BB- by Fitch Ratings
(&#147;Fitch&#148;) as of March&nbsp;3, 2006, and rated B+ by
S&#38;P as of February&nbsp;9, 2006.&#148; These ratings reflect
an assessment of the Government&#146;s overall ability to pay
its obligations and its willingness to meet its financial
commitments as they come due. No assurance can be given that
Moody&#146;s, S&#38;P, Fitch or any other international credit
rating agency will not downgrade the credit ratings of Indonesia
or Indonesian companies. Any such downgrade would have an
adverse impact on liquidity in the Indonesian financial markets
and the ability of Indonesian companies, including TELKOM, to
raise additional financing and the interest rates at which such
additional financing is available.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Indonesia is vulnerable to natural disasters and other
    events beyond TELKOM&#146;s control, which could severely
    disrupt the normal operation of TELKOM&#146;s business and
    adversely affect TELKOM&#146;s operating results.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM&#146;s existing operations are primarily in Indonesia,
parts of which are vulnerable to natural disasters. Disruption
of operations for any reason, including earthquakes, tsunamis,
floods, volcanic eruptions, droughts, power outages or other
events beyond TELKOM&#146;s control, could cause disruptions to
operations and damage to equipment which would adversely affect
TELKOM&#146;s financial condition and results of operations.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2002, a major flood in Jakarta affected TELKOM&#146;s
operations in Jakarta, where a significant portion of its
revenues are derived. In December 2004, northern parts of the
Indonesian island of Sumatra, and particularly the province of
Aceh, suffered severe damage following a massive earthquake
estimated to be of magnitude 9.3 on the Richter scale and a
series of tsunami waves on December&nbsp;26, 2004. The tsunami
and the earthquake caused approximately Rp.54.9&nbsp;billion
(US$5.6&nbsp;million) of damages to TELKOM&#146;s assets and
equipment in the Aceh province, including 22 out of 44 switching
facilities and transmission facilities and disrupted over 35,000
telephone lines out of approximately 99,000&nbsp;lines.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On March&nbsp;28, 2005, a major earthquake estimated to be of
magnitude 8.7 on the Richter scale struck off the western coast
of Sumatra. Scientists and seismic experts believe that rather
than relieving stresses along the Sunda fault, located to the
south of Sumatra, the seismic stresses along the Sunda fault
continue unabated or have increased, and warned of the
possibility of further earthquakes and tsunamis. The increased
seismic activity has also coincided with volcanoes in Sumatra
and Java, some of which have started to spew ashes and lava in
the first quarter of 2006. Most recently, Mount Merapi in
Central Java began erupting in May&nbsp;2006, and experts
believe a large eruption is imminent.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
While TELKOM maintains several insurance policies relating to
TELKOM&#146;s assets which covered the losses resulting from
tsunami damage, it does not maintain business interruption
insurance, and there can be no assurance that the insurance
coverage will be sufficient to protect TELKOM from potential
losses resulting from natural disasters and other events beyond
its control. In addition, there can be no assurance that the
premium payable for these insurance policies upon renewal will
not increase substantially, which may adversely affect
TELKOM&#146;s financial condition and results of operations.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Risks relating to TELKOM and its subsidiaries</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>TELKOM&#146;s expansion plans may strain key resources and
    thereby adversely affect its business, financial condition and
    prospects.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
To remain competitive and position TELKOM in gaining market
share, TELKOM has identified its primary business objective as
becoming a full service and network provider. To achieve this
objective, TELKOM has determined that it should increase its
focus on multimedia and other types of services in addition to
its present core business concentration on local, domestic
long-distance and mobile cellular services. The implementation
of measures designed to achieve these objectives could strain
TELKOM&#146;s managerial, financial and other resources, which
could adversely affect TELKOM&#146;s business, financial
condition and prospects.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>TELKOM&#146;s controlling stockholder&#146;s interests may
    differ from those of TELKOM&#146;s other stockholders.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Government has an aggregate interest of approximately 51.19%
of the issued and outstanding shares of TELKOM and has control
of TELKOM and the ability to determine the outcome of
substantially all actions requiring the approval of TELKOM
shareholders. The Government is also the holder of the Dwiwarna
share of TELKOM, which has special voting rights and veto rights
over certain matters, including the election and removal of the
Directors and Commissioners of TELKOM. Through the Ministry of
Communication and Information (&#147;MoCI&#148;), the Government
also exercises regulatory power over the Indonesian
telecommunications industry. There might be situations where the
objectives of the Government, as TELKOM&#146;s regulator and its
controlling shareholder, conflict with TELKOM&#146;s business
goals. In addition, there can be no assurance that the
Government will not direct opportunities to other
telecommunications service providers in which it holds an
interest.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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    <TD width="3%"></TD>
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<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Certain systems failures could, if they occur, adversely
    affect TELKOM&#146;s results of operations.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM&#146;s telecommunications services are carried through
its fixed line, cellular and data networks. All types of
networks use last mile access, regional metro junction and long
haul transmis-
</DIV>

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sion networks as a common network resource. For last mile
access, TELKOM operates Copper Access Network, Optical Access
Network and Wireless Access Network. The regional metro junction
and long haul transmission network operated by TELKOM consists
of optical fiber cable, microwave, submarine cable and satellite
transmission links.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Any failure of this integrated network, TELKOM&#146;s servers,
or any link in the transmission chain that results in an
interruption in TELKOM&#146;s operations or the provision of any
service, whether from operational disruption, natural disaster
or otherwise, could damage TELKOM&#146;s ability to attract and
retain subscribers and adversely affect its results of
operations, financial condition and prospects.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Regulators and other telecommunications operators may
    challenge TELKOM&#146;s ability to apply PSTN tariffs to its new
    CDMA-based fixed wireless phone service, which is marketed under
    the brand name TELKOMFlexi.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In December 2002, TELKOM introduced new CDMA-based fixed
wireless phone service, which is marketed under the brand name
TELKOMFlexi for both fixed and portable handsets. As of
December&nbsp;31, 2005, this service was offered in
231&nbsp;cities. CDMA-based fixed wireless technology enables
rapid development of telephone networks and reduces the capital
expenditures per line by obviating the need for the installation
of underground cables. TELKOMFlexi offers customers the ability
to use a wireless handset with limited mobility (within the same
area code). Customers generally have all features offered by
cellular services except roaming to other area codes and
internationally. Postpaid TELKOMFlexi customers are charged
tariffs that are similar to PSTN tariff rates for this service
while prepaid customers are charged tariffs slightly higher than
postpaid rates but with no monthly fees. In each case, both
TELKOMFlexi postpaid and prepaid tariffs are substantially lower
than tariffs for cellular services. Telecommunications
regulators, cellular operators and cellular trade associations
have sought and may in the future seek to impose limitations on
TELKOM&#146;s ability to provide fixed wireless services at PSTN
rates. If any such limitations are imposed, TELKOM could lose
part or all of the benefit of its investment in the network that
supports the TELKOMFlexi service. TELKOM may also be subject to
disputes with its regulators or competitors.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>TELKOM may need to raise funds required for certain future
    expenditure requirements and the terms of any debt financing may
    subject TELKOM to restrictive covenants.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM may need to raise significant additional funds in order
to support its growth, undertake acquisitions, meet unexpected
contingencies and develop new or enhanced services and products.
It may also need to respond to competitive pressures, acquire
complementary businesses or technologies or take advantage of
opportunities. TELKOM cannot be certain that such additional
funding, if needed, will be available on acceptable terms, if at
all. Furthermore, any debt financing, if available, may involve
restrictive covenants, which may limit TELKOM&#146;s operating
flexibility with respect to certain business matters. If
adequate funds are not available on acceptable terms, TELKOM may
be unable to develop or enhance its services. It may also be
unable to take advantage of future opportunities or respond to
competitive pressures, any of which could have a material
adverse effect on TELKOM&#146;s business, results of operations
and financial condition.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>TELKOM&#146;s ability to develop adequate financing
    arrangements is critical to support its capital
    expenditures.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The telecommunications industry is capital intensive in nature.
In order to satisfy customer demand and provide service and
technology that is comparable to and compatible with, other
telecommunications service providers, TELKOM must continue to
expand and modernize its network, which involves substantial
capital investment. TELKOM relies heavily on its internal funds,
two-step loans obtained through the Government and third-party
financing, including vendor financing to support the development
of its fixed line network. If TELKOM does not have sufficient
internal funds or is unable to obtain adequate vendor or other
third-party financing for its planned capital expenditures or
otherwise fund such expenditures through other financing
arrangements, TELKOM
</DIV>

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may have to forego, delay or postpone certain of its planned
capital expenditures. This may prevent TELKOM from being able to
expand sufficiently and upgrade its network, which could
adversely affect its revenues and growth.
</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Employee unions may negatively affect TELKOM&#146;s
    business.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Laws permitting the formation of labor unions, combined with
weak economic conditions, have resulted and may continue to
result, in labor unrest and activism in Indonesia. On
February&nbsp;25, 2003, the Indonesian Parliament passed a new
employment law, Law No.&nbsp;13 of 2003 (the &#147;Employment
Law&#148;), which took effect on March&nbsp;25, 2003. The
Employment Law provides more protection for the employee, such
as requiring a ruling from the Industrial Relations Court for
termination of an employee in certain situations, and covers the
increment of severance amount, service and compensation payment
payable to terminated employees as well as to allow employees to
unionize without intervention from employers. The Employment Law
and new implementation regulations that may be issued thereunder
may substantially affect labor relations in Indonesia. In May
2000, TELKOM employees formed a union named &#147;Serikat
Karyawan TELKOM&#148; or &#147;SEKAR&#148;. Membership with
SEKAR is not compulsory. TELKOM believes that its relations with
SEKAR are good. However, there can be no assurance that the
activities of employee unions will not materially and adversely
affect TELKOM&#146;s business, financial condition and prospects.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>New technologies may adversely affect TELKOM&#146;s
    ability to remain competitive.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The telecommunications industry is characterized by rapid and
significant changes in technology. TELKOM may face increasing
competition from technologies being developed or that may be
developed in the future. New technologies, services or standards
could require significant changes to its business model, the
development of new products or the provision of additional
services. In addition, TELKOM may need to substantially upgrade
to a next generation network to implement convergent
technologies and upgrade its billing and credit control systems
to accommodate growth in its business and the adoption of new
technologies and services. New products and services may be
expensive to develop and may result in the introduction of
additional competitors into the marketplace. TELKOM cannot
accurately predict how emerging and future technological changes
will affect its operations or the competitiveness of its
services. Similarly, TELKOM cannot provide any assurances that
the technologies it adopts will not soon thereafter become
obsolete or subject to intense competition from new technologies
in the future. If TELKOM is unable to keep pace with rapid
technological changes, its business, financial condition and
results of operations could be materially and adversely affected.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>TELKOM operates in a legal and regulatory environment that
    is undergoing significant reforms and such reforms may adversely
    affect TELKOM&#146;s business.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
There are a number of uncertainties in the current regulatory
environment for the Indonesian telecommunications industry. In
particular, the Telecommunications Law No.&nbsp;36 of 1999
(&#147;Telecommunications Law&#148;) provides key guidelines for
industry reforms, including industry liberalization,
facilitation of new entrants and changes to the industry&#146;s
competition structure. The Telecommunications Law only outlines
the framework and substantive principles for the liberalization
of the telecommunications industry. TELKOM considers that there
is uncertainty in the Indonesian regulatory environment with
regard to, among other things:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Interconnection:</I> TELKOM, including its subsidiaries such
    as Telkomsel, is obligated to allow other operators to
    interconnect their networks with those of TELKOM subject to
    entering into interconnection agreements with those other
    operators. As of the date of this Annual Report, TELKOM&#146;s
    ability to negotiate such interconnection agreements is limited
    by the provisions set forth in various ministerial decrees
    governing interconnection rates. On February&nbsp;8, 2006, the
    MoCI issued Regulation&nbsp;No.&nbsp;8/2006, which mandates a
    new cost-based interconnection tariff scheme for all
    telecommunications network and services operators. Under the new
    scheme, the operator of the network on which calls terminate
    would determine the interconnection charge to</TD>
</TR>

</TABLE>

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    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    be received by it based on a formula to be mandated by the
    Government, which would be intended to have the effect of
    requiring that operators charge for calls based on the costs of
    carrying such calls. Such calculated interconnection charges
    must be presented in a Reference Interconnection Offer
    (&#147;RIO&#148;) and reported to the ITRB. TELKOM submitted its
    RIO in April 2006. ITRB is expected to complete its review of
    RIOs submitted by large network operators, including TELKOM, by
    July 2006. The new interconnection tariff scheme will become
    effective on January&nbsp;1, 2007. For further information on
    the interconnection scheme, see Item&nbsp;4. &#147;Information
    on the Company&nbsp;&#151; B.&nbsp;Business Overview&nbsp;&#151;
    Regulations&nbsp;&#151; Interconnection&#148;. TELKOM can give
    no assurance regarding the impact, if any, of such adjustment on
    the interconnection revenues and costs on TELKOM and there can
    be no assurance that such impact would not have a material
    adverse effect on TELKOM&#146;s business, financial condition,
    results of operations and prospects.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Licenses:</I> TELKOM&#146;s separate licenses to provide
    fixed line services, DLD services and IDD services were replaced
    and combined into a single license issued on May&nbsp;13, 2004.
    TELKOM also has a multimedia license that includes services such
    as Internet service provider, data communication and VoIP. The
    Government, with due regard to prevailing laws and regulations,
    may amend the terms of TELKOM&#146;s licenses and business
    authority at its discretion. It may also impose certain
    mandatory obligations on the license holders. See Item&nbsp;4.
    &#147;Information on the Company&nbsp;&#151; B.&nbsp;Business
    Overview&nbsp;&#151; Regulations&nbsp;&#151; Modern
    License&#148;. Any breach of the terms and conditions of its
    licenses or business authority or failure to comply with
    applicable regulations may result in such licenses or business
    authority being revoked. Any revocation or unfavorable amendment
    of the licenses or business authority, or any failure to renew
    them on comparable terms, could have a materially adverse effect
    on TELKOM&#146;s business, financial condition, results of
    operations and prospects.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Tariffs:</I> In 1995, the Government implemented regulations
    providing a formula to establish the tariff adjustment for
    domestic fixed line telecommunications services. However, such
    annual tariff review adjustment has not been applied on a
    consistent basis. In addition, amendments to the current price
    cap policy allow operators to calculate yearly tariff
    adjustments beginning January&nbsp;1, 2002, based on a formula
    to be stipulated by the Government. On January&nbsp;29, 2002,
    the Government issued a letter to TELKOM stipulating a 45.49%
    increase in domestic fixed line telephone tariffs to be
    implemented over three years. For the year 2002 a tariff
    increase, with a weighted average of 15% increase, was
    implemented. In January 2003, the Government postponed the
    second tariff increase due to numerous public protests. However,
    on March&nbsp;30, 2004, the Government, as recommended by the
    ITRB, announced that it would allow operators to adjust their
    tariffs, with the resulting weighted average of tariffs
    increasing by 9%. There can be no assurance that the Government
    will implement further tariff increases or that tariffs will
    keep pace with costs over time. Any failure of the Government to
    implement regular tariff increases could have a material adverse
    effect on our business, financial condition and results of
    operations.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Migration of Frequencies for 3G Service Providers:</I> On
    August&nbsp;31, 2005, the MoCI issued a press release which
    announced that in order to conform with the international
    standards of the industry and as recommended by the
    International Telecommunications Union&nbsp;&#151;
    Radiocommunication Sector
    <FONT style="white-space: nowrap">(&#147;ITU-R&#148;),</FONT>
    the 1900&nbsp;MHz frequency spectrum would only be used for the
    International Mobile Telecommunications- 2000
    <FONT style="white-space: nowrap">(&#147;IMT-2000&#148;</FONT>
    or <FONT style="white-space: nowrap">&#147;3-G&#148;)</FONT>
    network. The MoCI also announced that the CDMA-based technology
    network which TELKOM uses for its fixed wireless services can
    only operate in the 800&nbsp;MHz frequency spectrum. At present,
    TELKOM utilizes the 1900&nbsp;MHz frequency spectrum for its
    fixed wireless network in Jakarta and West Java areas while for
    other areas, TELKOM utilizes the 800&nbsp;MHz frequency
    spectrum. As a result of the Government&#146;s decision,
    TELKOM&#146;s Base Station System (&#147;BSS&#148;) equipment in
    Jakarta and West Java areas which are part of transmission
    installation and equipment for fixed wireless network can no
    longer be used commencing at the end of 2007. We expect that the
    BSS equipment will be</TD>
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    completely replaced with the BSS equipment operating in
    800&nbsp;MHz by mid-2007. On January&nbsp;13, 2006, the MoCI
    issued MoCI Regulation No.&nbsp;01/PER/M.KOMINFO/1/2006 which
    reaffirmed the Government&#146;s decision that TELKOM&#146;s
    fixed wireless network can only operate in the 800&nbsp;MHz
    frequency spectrum and that the 1900&nbsp;MHz is allocated for
    the <FONT style="white-space: nowrap">3-G</FONT> network. See
    Item&nbsp;5. &#147;Operating and Financial Review and
    Prospects&nbsp;&#151; A. Operating Results&nbsp;&#151;
    Overview&nbsp;&#151; Write-down of Assets, Depreciation Expense,
    Loss on Procurement Commitments, and Operations, Maintenance and
    Telecommunication Services Expenses&#148;. There can be no
    assurance that TELKOM will not recognize further loss as a
    result of such Government decisions.</TD>
</TR>

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    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Termination of Wireless Local Loop (&#147;WLL&#148;)
    License:</I> In the first quarter of 2005, the Government, in
    its efforts to rearrange the frequency spectra utilized by the
    telecommunications industry, issued a series of regulations
    which resulted in TELKOM not being able to utilize certain
    frequency spectra it currently uses to support its fixed
    wireline cable network commencing at the end of 2006. As a
    result of these regulations, certain of TELKOM&#146;s cable
    network facilities within the fixed wireline segment, which
    comprise primarily of WLL and approach link equipment (a
    transmission equipment to link BTSs to a local exchange)
    operating in the affected frequency spectra, can no longer be
    used commencing at the end of 2006. See Item&nbsp;5.
    &#147;Operating and Financial Review and Prospects&nbsp;&#151;
    A. Operating Results&nbsp;&#151; Overview&nbsp;&#151; Write-down
    of Assets, Depreciation Expense, Loss on Procurement
    Commitments, and Operations, Maintenance and Telecommunication
    Services Expenses&#148;. There can be no assurance that TELKOM
    will not recognize further loss as a result of such Government
    decisions.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
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<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Indonesian Telecommunications Regulatory Body
    (&#147;ITRB&#148;):</I> The Telecommunications Law allows the
    Government to delegate its authority to regulate, supervise and
    control the telecommunications sector in Indonesia to an
    independent regulatory body, while maintaining the authority to
    formulate policies over the industry. Such delegation of
    authority to the ITRB was implemented under the MoC Decree
    No.&nbsp;31/2003, dated July&nbsp;11, 2003. The ITRB comprises
    officials from the Directorate General of Post and
    Telecommunication and the Committee of Telecommunications
    Regulations. There can be no assurance that the ITRB will not
    take actions that may be detrimental to TELKOM&#146;s business,
    financial condition, results of operations or prospects.</TD>
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    <TD style="font-size: 6.0pt">&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Competition in the Fixed Line Domestic Telecommunications
    Market:</I> Historically, TELKOM had the exclusive right to
    provide fixed line domestic telecommunications services in
    Indonesia. Pursuant to regulations introduced to implement the
    Telecommunications Law, the Government terminated TELKOM&#146;s
    monopoly in providing fixed line domestic telecommunications
    services. The MoC issued Indosat a license to provide local
    telephone services from August 2002. On May&nbsp;13, 2004,
    Indosat received its commercial license to provide domestic
    long-distance telephone services. Indosat launched its CDMA
    fixed wireless access service under the brand name
    &#147;StarOne&#148; in Surabaya on May&nbsp;29, 2004 and in
    Jakarta on July&nbsp;25, 2004, thereby creating a &#147;duopoly
    system&#148; in Indonesia&#146;s fixed line domestic
    telecommunications market. As of December&nbsp;31, 2005, Indosat
    offered this service in Jakarta, Bogor, Depok, Tangerang,
    Bekasi, Banten, Surabaya, Yogyakarta, Malang, Sidoarjo, Gresik,
    Batu, Madura (Bangkalan, Sampang, Sumenep), Pasuruan, and Medan.
    Based on the interconnection agreement between TELKOM and
    Indosat dated September&nbsp;23, 2005, TELKOM and Indosat have
    agreed to open interconnection (i)&nbsp;of TELKOM&#146;s local
    fixed line network with Indosat&#146;s long-distance fixed line
    network; (ii)&nbsp;of Indosat&#146;s local fixed line network
    with TELKOM&#146;s long-distance fixed line network;
    (iii)&nbsp;between TELKOM&#146;s and Indosat&#146;s
    long-distance fixed line networks; (iv)&nbsp;of TELKOM&#146;s
    domestic fixed line network with Indosat&#146;s international
    fixed line network; and (v)&nbsp;Indosat&#146;s local fixed line
    network with TELKOM&#146;s international fixed line network,
    with the interconnection tariff being calculated on a
    call-by-call basis. On December&nbsp;1, 2005, TELKOM and Indosat
    entered into an interconnection agreement for the
    interconnection of TELKOM&#146;s fixed network with
    Indosat&#146;s mobile cellular network and allowing
    Indosat&#146;s mobile customers to access TELKOM&#146;s IDD
    services. Therefore, Indosat is expected to expand its service
    coverage to other cities in Indonesia. Indosat also commenced
    offering limited domestic long-distance services for</TD>
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    calls within its network in late 2004. This greater competition
    in the fixed line market, including fixed wireless, could lead
    to a decline in TELKOM&#146;s existing subscriber base as
    subscribers choose to receive services from other providers.
    TELKOM&#146;s interconnection arrangements will be affected by
    the new cost-based interconnection scheme which was publicly
    announced in February 2006. An amendment to the interconnection
    agreement with Indosat reflecting the new cost-based
    interconnection scheme is expected to be effective by the end of
    2006.</TD>
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    <TD style="font-size: 6.0pt">&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>DLD and IDD Services:</I> On March&nbsp;11, 2004, the MoC
    issued Decree No. 28/2004, Decree No.&nbsp;29/2004 and Decree
    No.&nbsp;30/2004 that further implement the Government&#146;s
    policy of encouraging competition in the markets for DLD and IDD
    services. Based on Decree No.&nbsp;28/2004, TELKOM, which
    currently uses &#147;0&#148; as the access code for its DLD
    service, was required by March&nbsp;1, 2005 to cease using the
    &#147;0&#148; access code and to implement a three digit access
    code in the form of &#147;01X&#148; for access to its DLD
    service. However, TELKOM has not within the given deadline
    implemented, and does not expect in the near future to
    implement, a three digit access code, as extensive installation
    or upgrade of equipment will be required. TELKOM expects to
    incur significant costs in connection with the new requirement
    to establish three digit DLD access codes, including
    expenditures required to install or upgrade new switching
    facilities, create a new routing database, costs relating to
    customer education and other marketing costs. In response to the
    MoC Decree No.&nbsp;28/2004, in June 2004, TELKOM submitted a
    letter to the ITRB highlighting the technical difficulties in
    implementing the three digit DLD access codes within the given
    deadline and the substantial costs involved, and requesting that
    TELKOM be allowed to continue using the &#147;0&#148; prefix for
    its DLD access prefix and that it be given an additional
    <FONT style="white-space: nowrap">five-year</FONT> period to
    implement the three digit DLD access codes. On April&nbsp;1,
    2005, the MoCI, to which telecommunications regulatory
    responsibility was transferred, announced that it would make
    available to Indosat the &#147;011&#148; DLD access in five
    major cities that were technically ready for interconnection,
    including Jakarta, and progressively extend it to all other area
    codes within five years. TELKOM has also been assigned
    &#147;017&#148; as its DLD access code. However, the
    interconnection agreement between Indosat and TELKOM in these
    five cities does not contain any provisions on technical and
    business arrangements regarding the use of &#147;011&#148; and
    &#147;017&#148; DLD access codes. In the five-year interim
    period and thereafter, the &#147;0&#148; prefix may continue to
    be used by all operators, including TELKOM, as default code for
    each operator&#146;s customers to access the DLD service
    selected by the respective operator. Competition in the market
    for DLD services could lead to a decline in TELKOM&#146;s DLD
    revenues as subscribers choose to receive DLD services from
    other providers, such as Indosat. With regard to IDD services,
    on May&nbsp;13, 2004 TELKOM received its commercial license from
    the Government to provide IDD services and began offering such
    services to customers on June&nbsp;7, 2004. Nevertheless,
    competition among IDD service providers may limit TELKOM&#146;s
    ability to generate significant IDD revenues. On May&nbsp;17,
    2005, the MoCI issued decree No.&nbsp;6/2005. According to
    Decree No.&nbsp;6/2005, the three digit access code in the form
    of &#147;01X&#148; and &#147;0&#148; access code for access to
    DLD services may be used. The &#147;0&#148; access code is being
    used to accommodate customers who prefer not to choose their
    long-distance carrier, while the &#147;01X&#148; access code has
    to be implemented gradually in local areas in which TELKOM has
    technical capabilities to support such services. By
    April&nbsp;1, 2010, the &#147;01X&#148; long-distance services
    must be commenced in all TELKOM&#146;s local areas to
    accommodate customers who prefer to choose their long-distance
    carrier. For further information, see Item&nbsp;4.
    &#147;Information on the Company&nbsp;&#151; B.&nbsp;Business
    Overview&nbsp;&#151; Indonesian Telecommunications
    Industry&nbsp;&#151; Regulations&nbsp;&#151; DLD and IDD
    Services.&#148;</TD>
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    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Compensation Risk:</I> The Telecommunications Law provides
    that TELKOM and Indosat will be compensated for the early
    termination of their exclusive rights. TELKOM previously had
    exclusive rights to provide fixed local and domestic
    long-distance services in Indonesia. TELKOM&#146;s exclusive
    right to provide fixed local telecommunications services was
    terminated by the Government in August 2002 and TELKOM&#146;s
    exclusive right to provide domestic long-distance services was
    terminated on March&nbsp;30, 2004. The Government has determined
    the scheme of compensation for the termination of TELKOM&#146;s
    exclusive rights, which will consist of</TD>
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    <TD></TD>
    <TD align="left">
    (i)&nbsp;expedited issuance of an IDD license to TELKOM, which
    was issued on May&nbsp;13, 2004; (ii)&nbsp;approval of the
    reissuance and transfer of TELKOM&#146;s DCS 1800 license to
    Telkomsel, which took place on July&nbsp;12, 2002; and
    (iii)&nbsp;a net cash payment to TELKOM of Rp.478&nbsp;billion
    (after taxes). While the amount of the compensation payable to
    TELKOM has been determined, payment was contingent on
    appropriations to the State Budget for the MoCI, which requires
    approval by Parliament. On December&nbsp;15, 2005, TELKOM signed
    an agreement on Implementation of Compensation for Termination
    of Exclusive Rights with the Directorate General of Post and
    Telecommunications of MoCI. Pursuant to this agreement, the
    Government agreed to pay Rp.478.0&nbsp;billion to TELKOM over a
    five-year period. Under the plan, the Government paid
    Rp.90.0&nbsp;billion in 2005 and shall pay Rp.90.0&nbsp;billion
    in 2006 and then the remaining Rp.298.0&nbsp;billion thereafter
    in installments or in lump-sum, which payment schedule will
    depend upon the Government&#146;s budgetary considerations. In
    addition, TELKOM is required by the Government to use funds
    received thereunder for development of Indonesian
    telecommunications infrastructure. TELKOM can provide no
    assurance that the Government will honor its promise to pay the
    balance within the next five years.</TD>
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    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Identity Registration:</I> For prepaid subscribers, there is
    a new obligation regulated under the MoCI Decree
    No.&nbsp;23/2005, issued on October&nbsp;28, 2005. Pursuant to
    this Decree, TELKOM is required to obtain identity information
    for all of its prepaid customers on or prior to April&nbsp;28,
    2006. Such an obligation may slow down revenue growth in 2006
    compared to 2005 and have an adverse impact on TELKOM&#146;s
    profit as TELKOM will have to incur additional expenditures on
    support systems and dealers&#146; compensation. It may also
    present difficulties for TELKOM in retaining existing customers
    and expose TELKOM customers&#146; identities to illegal use or
    government investigations. This identity registration
    requirement, however, will affect other competitors as well.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
There can be no assurance that the amendment or interpretation
or implementation of current laws and regulations, or the
introduction of additional laws or regulations, will not
adversely affect TELKOM&#146;s business, financial condition and
prospects.
</DIV>

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    <B><I>TELKOM&#146;s increasingly important cellular operations
    face significant constraints and competitive pressures.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM provides cellular telecommunications services primarily
through its subsidiary Telkomsel (GSM 900&nbsp;Mhz and
1800&nbsp;Mhz). Telkomsel has experienced rapid growth in its
subscriber-base in recent years and its revenue has become an
increasingly large component of TELKOM&#146;s consolidated
revenue. Telkomsel&#146;s future growth depends upon its ability
to manage capacity and spectrum constraints. Telkomsel has
experienced such constraints in the past and has therefore
deployed significant resources to eliminate such constraints.
Although Telkomsel is not currently experiencing such
difficulties, there is no guarantee that Telkomsel would not
face such constraints in the future, which may result in network
congestion, reduced service quality and an inability to increase
and retain its subscriber base.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Indonesian cellular telecommunications market is highly
competitive. Currently, Telkomsel competes primarily with
Indosat and PT Excelcomindo Pratama (&#147;Excelcomindo&#148;)
in attracting and retaining subscribers for its mobile cellular
telecommunications services. There are also several other new
competitors, including new CDMA cellular operators. Competition
between Telkomsel and all of these operators is based on various
factors such as pricing, network quality and coverage, range of
services offered and customer service. While TELKOM believes
Telkomsel has been successful in maintaining its market share to
date, there can be no assurance that Telkomsel will be
successful in competing in the cellular market in the future.
</DIV>

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    <B><I>TELKOM&#146;s satellites have a limited life and
    substantial risk exists for
    <FONT style="white-space: nowrap">TELKOM-1</FONT> and
    <FONT style="white-space: nowrap">TELKOM-2</FONT> to be damaged
    or interrupted during operation and satellite loss or reduced
    performance may adversely affect our financial condition,
    results of operations and ability to provide certain
    services.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM&#146;s TELKOM-1 and TELKOM-2 satellites have limited
operational lifespans. A number of factors affect the
operational livespans of satellites, including the quality of
their construction, the durability of their component parts, the
amount of fuel on board, the launch vehicle used and the manner
in which the satellite is monitored and operated. The satellites
could fail before the end of their useful lives and repairing
these satellites while in orbit is not feasible. For further
information on the insurance coverage for TELKOM-1 and TELKOM-2
satellites, see Item&nbsp;4. &#147;Information of the
Company&nbsp;&#151; B. Business Overview&nbsp;&#151;
Insurance&#148;. While TELKOM has provided insurance for its
satellites, there can be no assurance that such insurance will
offer adequate coverage. The loss of its satellites may have a
material adverse effect on TELKOM&#146;s financial condition,
results of operations and ability to provide certain services,
particularly in the eastern parts of Indonesia which currently
relies largely on satellite coverage for telecommunication
services.
</DIV>

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    <TD>
    <B><I>TELKOM is subject to Indonesian accounting and corporate
    disclosure standards that differ in significant respects from
    those applicable in other countries.</I></B></TD>
</TR>

</TABLE>

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There may be less publicly-available information about
Indonesian public companies, including TELKOM, than is regularly
disclosed by public companies in countries with more mature
securities markets. TELKOM&#146;s audited consolidated financial
statements have been prepared in accordance with Indonesian
GAAP, which varies in certain significant respects from
U.S.&nbsp;GAAP. See Item&nbsp;5. &#147;Operating and Financial
Review and Prospects&nbsp;&#151; A. Operating
Results&nbsp;&#151; Summary of Significant Differences between
Indonesian GAAP and U.S.&nbsp;GAAP&#148; and Note&nbsp;54 to
TELKOM&#146;s consolidated financial statements.
</DIV>

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    <TD>
    <B><I>Certain TELKOM employees, including present and former
    TELKOM directors, are subject to on-going police
    investigations.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
There are on-going investigations by the West Java Police
Department as to the conduct of TELKOM&#146;s Director of Human
Resources Development, TELKOM&#146;s Director of Consumer, and
several other TELKOM employees (including one former TELKOM
director and one former President Director of Napsindo). As the
details of the investigations have not been made public, TELKOM
does not know the full nature or extent of the investigations or
the matters to which they relate, or whether any charges are
likely to be filed. Based on press reports, TELKOM understands
that the investigations relate principally to an alleged
violation of anti-corruption law regarding (i)&nbsp;the
retention by TELKOM of a consultant and an alleged overpayment
without compliance with proper procedures; and (ii)&nbsp;the
alleged provision of interconnection services to Napsindo,
TELKOM&#146;s subsidiary, and Globalcom, a Malaysian company, at
an incorrect tariff, and alleged use by Napsindo/Globalcom of
TELKOM&#146;s network for the provision of illegal VoIP
services. It is also understood that one of the investigations
relates to TELKOM&#146;s guarantee of a bank loan obtained by
Napsindo. To TELKOM&#146;s knowledge, no charges have been filed
against any of the persons investigated by the West Java Police
Department, although several of them (but not our Director of
Consumer) were held in custody in West Java pending completion
of the investigations. On May&nbsp;10, 2006, those individuals
were released from police custody because the police were unable
to find any incriminating evidence to support the alleged
charges during the 120-day period they were held. 120&nbsp;days
is the maximum period allowed for police custody of suspects for
investigation purposes. However, the investigation is ongoing.
</DIV>

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There can be no assurance that the police will not find evidence
of wrong-doing, that charges will not be filed in relation to
the foregoing or that such persons or other TELKOM employees
will not be found guilty of any offence. Although TELKOM
believes that the investigations are without merit, to the
extent any of such persons are in custody, or are found guilty
of any offence, TELKOM is and
</DIV>

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would be deprived of their services. In addition, TELKOM does
not believe that there are any financial ramifications for
TELKOM as a result of the investigations.
</DIV>

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    <TD>
    <B><I>TELKOM is incorporated in Indonesia and it may not be
    possible for investors to effect service of process or to
    enforce judgments obtained in the United States against
    TELKOM.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM is a limited liability company incorporated in Indonesia,
operating within the framework of Indonesian laws relating to
public companies and all of TELKOM&#146;s significant assets are
physically located in Indonesia. In addition, the majority of
TELKOM&#146;s Commissioners and Directors reside in Indonesia
and a substantial portion of the assets of such persons is
located outside the United States. As a result, it may not be
possible for investors to effect service of process, including
judgments, on TELKOM or such persons within the United States,
or to enforce against TELKOM or such persons in the United
States judgments obtained in United States courts, including
judgments predicated upon the civil liability provisions of the
United States federal securities laws or the securities laws of
any state within the United States, or upon other bases.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM has been advised by its Indonesian legal advisor that
judgments of United States courts, including judgments
predicated upon the civil liability provisions of the United
States federal securities laws, are not enforceable in
Indonesian courts, although such judgments could be admissible
as non-conclusive evidence in a proceeding on the underlying
claim in an Indonesian court. There is doubt as to whether
Indonesian courts will enter judgments in original actions
brought in Indonesian courts predicated solely upon the civil
liability provisions of the United States federal securities
laws. As a result, holders of ADSs or Common Stock would be
required to pursue claims against TELKOM or its Commissioners
and Directors in an Indonesian court.
</DIV>

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    <TD></TD>
    <TD>
    <B><I>Forward-looking statements reflect current expectations
    and may not be correct.</I></B></TD>
</TR>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This document contains various forward-looking statements,
including statements regarding our expectations and projections
for future operating performance and business prospects. The
words &#147;believe&#148;, &#147;expect&#148;,
&#147;anticipate&#148;, &#147;estimate&#148;,
&#147;project&#148; and similar words identify forward-looking
statements. In addition, all statements other than statements of
historical facts included herein are forward-looking statements.
These statements reflect TELKOM&#146;s current expectations.
Although TELKOM believes that the expectations reflected in the
forward-looking statements are reasonable, TELKOM can give no
assurance that such expectations will prove to be correct. They
are subject to a number of risks and uncertainties, including
changes in the economic, social and political environments in
Indonesia. In light of the many risks and uncertainties
surrounding Indonesia, investors in the ADSs or the common
shares should bear in mind that TELKOM cannot guarantee that the
forward-looking statements described herein will transpire. All
subsequent written and oral forward-looking statements
attributable to TELKOM or persons acting on our behalf are
expressly qualified in their entirety by reference to these
risks.
</DIV>

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<A name='108'></A>
</DIV>

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    <TD><B>ITEM 4.</B></TD>
    <TD>
    <B>INFORMATION ON THE COMPANY</B></TD>
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    <TD><B>A.</B></TD>
    <TD>
    <B>History and Development of the Company</B></TD>
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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM, a majority state-owned company, is the principal
provider of fixed line services in Indonesia. TELKOM&#146;s
majority-owned subsidiary Telkomsel is also the largest
Indonesian mobile cellular operator, as measured by subscribers
and revenues. The Company also provides a wide range of other
telecommunications services including interconnection, network,
data and Internet services and other telecommunications
services. Pursuant to its Articles of Association, TELKOM was
established for an unlimited period of time. The Company&#146;s
purposes and objectives are to operate telecommunications
networks and provide telecommunications and information services.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 first made available in Indonesia in
1882 and, until 1906, were provided by privately-owned
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
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&#146;s. The
Government separated postal and telecommunications services in
1965 into two state-owned companies, PN Pos and Giro and PN
Telekomunikasi. In 1974, PN Telekomunikasi was further divided
into two state-owned companies, Perusahaan Umum Telekomunikasi
(&#147;Perumtel&#148;) to provide domestic and international
telecommunications services and PT Industri Telekomunikasi
Indonesia Tbk (&#147;PT INTI&#148;), to provide
telecommunications equipment manufacturing. In 1980, the
international telecommunications business was transferred to
Indosat.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 1991, Perumtel was transformed into a &#147;Persero&#148;, or
state-owned limited liability corporation with commercial
purposes and renamed Perusahaan Perseroan (Persero)
P.T.&nbsp;Telekomunikasi Indonesia, known as TELKOM. Prior to
1995, TELKOM&#146;s business operations were segregated into
twelve regional operating units, known as &#147;Witels,&#148;
which were centrally controlled from TELKOM&#146;s headquarters
in Bandung, West Java. Each Witel had a management structure
responsible for all aspects of TELKOM&#146;s business in their
respective regions, from the provision of telephone services to
property management and security.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During 1995, TELKOM restructured its operations by converting
all twelve Witels into seven regional divisions (Division&nbsp;I
Sumatera; Division&nbsp;II Jakarta and the surrounding areas;
Division&nbsp;III West Java; Division&nbsp;IV Central Java;
Division&nbsp;V East Java; Division&nbsp;VI Kalimantan; and
Division&nbsp;VII Eastern part of Indonesia) and one Network
Division. The Company also entered into KSO Agreements pursuant
to which it transferred the right to operate five of its seven
regional divisions (regional divisions&nbsp;I, III, IV, VI and
VII) to private sector consortia, each of which involved one or
more prominent international telecommunications operators. The
KSO Agreements provided for the relevant KSO partner to manage
and operate the regional division for a fixed term, undertake
the construction of a specified number of fixed lines and, at
the end of the fixed term, transfer the existing and new
telecommunications facilities in the region to TELKOM for an
agreed amount of compensation. The KSO Agreements also provided
for TELKOM and the KSO partner to share revenues generated
during the term of the agreement.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On November&nbsp;14, 1995, the Government sold TELKOM shares
through an initial public offering. TELKOM shares are listed on
the Jakarta Stock Exchange and the Surabaya Stock Exchange and
its shares, in the form of ADSs, are listed on the New York
Stock Exchange and the London Stock Exchange. Its shares were
also publicly offered without listing on the Tokyo Stock
Exchange. TELKOM is currently one of the largest companies by
market capitalization in Indonesia, with a market capitalization
of approximately Rp.118,943&nbsp;billion as of December&nbsp;31,
2005 and of approximately Rp.143,136&nbsp;billion as of
May&nbsp;24, 2006. The Government currently has an aggregate
interest of approximately 51.2% of the issued and outstanding
shares of TELKOM. The Government also holds the Dwiwarna share
of TELKOM, which has special voting and veto rights over certain
matters.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Based on the resolution of the Extraordinary General Meeting of
Stockholders on December 21, 2005, the Stockholders authorized a
plan to repurchase up to a maximum of 5% of TELKOM&#146;s
20,159,999,279 total issued and outstanding Series&nbsp;B shares
for a total repurchase amount not exceeding Rp.5,250,000
million. Pursuant to the share repurchase plan, as of
June&nbsp;2, 2006, TELKOM has cumulatively repurchased an
aggregate of 8,373,500 Series&nbsp;B shares on either the
Jakarta Stock Exchange or the New York Stock Exchange,
representing less than 0.05% of the total issued and outstanding
Series&nbsp;B shares of 20,159,999,279 for a total repurchase
amount of Rp.61.4&nbsp;billion (US$6.2&nbsp;million). These
transactions are in compliance with the limitations set forth in
the resolution. For further information on the share repurchase,
see Item&nbsp;7. &#147;Major Stockholders and Related Party
Transactions&nbsp;&#151; A. Major Stockholders&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Following the Indonesian economic crisis that began in mid-1997,
certain KSO partners experienced difficulties in fulfilling
their obligations to TELKOM, which led to certain disputes. As a
result,
</DIV>

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TELKOM has in recent years acquired or entered into agreements
to acquire control of its KSO partners in regions I, III and VI,
and amended the terms of the KSO agreement with its KSO partner
in region IV to obtain legal right to control financial and
operating decisions of Regional Division IV. For a more complete
description of the acquisition of control of its KSO partners in
regions I, III and VI, acquisition of control of region IV, and
TELKOM&#146;s KSO arrangements, see Item&nbsp;10.
&#147;Additional Information&nbsp;&#151; C.&nbsp;Material
Contracts&#148; and Item&nbsp;4. &#147;Information on the
Company&nbsp;&#151; B.&nbsp;Business Overview&nbsp;&#151; Joint
Operation Scheme&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 1999, the Government passed Telecommunications Law
No.&nbsp;36 which became effective in September 2000. The
Telecommunications Law provides key guidelines for industry
reforms, including industry liberalization, facilitation of new
entrants and enhanced competition. Under the prior
telecommunications law, TELKOM and PT Indonesian Satellite
Corporation (&#147;Indosat&#148;) maintained joint ownership in
most telecommunications companies in Indonesia. The Government
reforms called for the progressive elimination of these joint
shareholdings to promote competition. As a result, in 2001,
TELKOM acquired Indosat&#146;s 35% interest in Telkomsel,
resulting in TELKOM owning 77.72% of the shares of Telkomsel and
Indosat acquired TELKOM&#146;s 22.5% interest in Satelindo and
37.7% interest in Lintasarta. In 2002, TELKOM sold 12.72% of
Telkomsel to Singapore Telecom Mobile Pte Ltd (&#147;SingTel
Mobile&#148;), resulting in TELKOM&#146;s ownership being
reduced to 65% of the shares of Telkomsel.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to the Telecommunications Law, the Government as of
August&nbsp;1, 2001 terminated the exclusive rights of TELKOM to
provide fixed line services in Indonesia and Indosat to provide
international direct dial services. TELKOM&#146;s exclusive
right to provide domestic local service was terminated in August
2002 and TELKOM&#146;s exclusive right to provide domestic
long-distance service was likewise terminated in August 2003. On
May&nbsp;13, 2004, TELKOM received its commercial license to
provide IDD fixed line services and began offering such services
on June&nbsp;7, 2004. The MoC issued Indosat a license to
provide local telephone services from August 2002. On
May&nbsp;13, 2004, Indosat received its commercial license to
provide domestic long-distance telephone services. Indosat
launched its CDMA fixed wireless access service under the brand
name &#147;StarOne&#148; in Surabaya on May&nbsp;29, 2004 and in
Jakarta on July&nbsp;25, 2004, thereby creating a &#147;duopoly
system&#148; in Indonesia&#146;s fixed line domestic
telecommunications market. As of the date of this Annual Report,
Indosat is able to provide nationwide DLD services through its
CDMA-based fixed wireless network and its interconnection
arrangements with TELKOM.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For a description of the important events in the development of
the Company&#146;s business since the beginning of the
Company&#146;s last three financial years to the date of this
Annual Report, see Item&nbsp;5. &#147;Operating and Financial
Review and Prospects&nbsp;&#151; A. Operating
Results&nbsp;&#151; Overview&#148;. A description of the
Company&#146;s principal capital expenditures and divestitures,
since the beginning of the Company&#146;s last three financial
years to the date of this Annual Report is set forth in
Item&nbsp;5. &#147;Operating and Financial Review and
Prospects&nbsp;&#151; B.&nbsp;Liquidity and Capital
Resources&#148;. Information concerning the principal capital
expenditures and divestitures currently in progress is also
described in Item&nbsp;5. &#147;Operating and Financial Review
and Prospects&nbsp;&#151; B.&nbsp;Liquidity and Capital
Resources&#148;. The Company is domiciled in the Republic of
Indonesia. It is incorporated in and under the legislation of
the Republic of Indonesia. The address of the Company&#146;s
registered office is No.&nbsp;1, Jalan Japati, Bandung, 40133,
Indonesia and the telephone number of the Company&#146;s
registered office is
(62)&nbsp;(22)&nbsp;<FONT style="white-space: nowrap">452-1510.</FONT>
</DIV>

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    <TD><B>B.</B></TD>
    <TD>
    <B>Business Overview</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>General</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM is the main provider of fixed line telecommunications
services in Indonesia and is the majority owner of Telkomsel,
which is the largest Indonesian mobile cellular operator, as
measured by subscribers and revenue. The Company also provides a
wide range of other telecommunications
</DIV>

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services including interconnection, network, data and Internet
services and other telecommunications services. TELKOM reports
revenues in the following categories:
</DIV>

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    <TD width="1%"></TD>
    <TD width="96%"></TD>
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    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Fixed lines (which consists of fixed wireline and fixed
    wireless);</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Cellular;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Joint Operation Schemes (KSO);</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Interconnection;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Network;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Data and Internet;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Revenue-Sharing Arrangements; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Other Services (including revenues from telephone directory
    services and building management services).</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For segment reporting purposes, TELKOM has four segments:
(i)&nbsp;fixed wireline, (ii)&nbsp;fixed wireless,
(iii)&nbsp;cellular and (iv)&nbsp;other. See Note&nbsp;46 to the
consolidated financial statements. The fixed wireline segment
provides local, domestic long-distance and international
(starting 2004) telephone services, and other telecommunications
services (including, among others, leased lines, telex,
transponder, satellite and Very Small Aperture Terminal-VSAT) as
well as ancillary services. The fixed wireless segment provides
local and domestic long-distance CDMA-based telephone services,
as well as other telecommunication services using
limited-mobility wireless handsets within a local area code. The
cellular segment provides basic telecommunication services,
particularly mobile cellular telecommunication services.
Operating segments that do not individually represent more than
10% of the Company&#146;s revenues are presented as
&#147;Other&#148; comprising the telephone directories and
building management businesses.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For 2005, no single customer, other than interconnection
customers, accounted for more than 1% of TELKOM&#146;s total
operating revenues and TELKOM&#146;s top 100 customers, other
than interconnection customers, together accounted for no more
than 2% of its total operating revenues. For the purpose of
calculating operating revenues, TELKOM treats each state-owned
enterprise owned by the Government as a single customer.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM&#146;s business does not experience significant
seasonality.
</DIV>

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    <TD></TD>
    <TD>
    <B><I>Fixed Line Services</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Fixed line services are comprised mainly of local and domestic
long-distance services. TELKOM is the principal provider of
fixed line services in Indonesia. In 2005, TELKOM provided fixed
line services in Divisions&nbsp;I, II, III, IV, V and VI. In
2005, revenues from fixed line services in these divisions
contributed Rp.10,781.3&nbsp;billion (US$1,096.8&nbsp;million),
or 25.8% of total operating revenues. Beginning January&nbsp;20,
2004, when TELKOM acquired control of operations of Regional
Division&nbsp;IV, TELKOM began providing fixed line services in
Division&nbsp;IV.
</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>Fixed Wireline Services</I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Fixed wireline subscribers pay one-time installation charges,
ongoing monthly subscription charges and usage charges for
local, domestic long-distance and international services. Usage
charges are generally uniform nationwide and are based on call
distance, call duration and the time of day at which calls are
made. In addition, subscribers are provided with a number of
value-added features, such as voicemail and information services
and billing and directory assistance, which are billed on a
monthly basis.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM began offering IDD services, under the brand name
&#147;Telkom International Call 007&#148;, or &#147;TIC
007,&#148; on June&nbsp;7, 2004. TELKOM reports its IDD revenues
under international interconnection
</DIV>

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revenues as this service requires interconnection between TELKOM
and network operators in other countries. See
&#147;&#151;&nbsp;Interconnection Services&#148; below. Through
its VoIP service, which is known as &#147;TelkomGlobal
017&#148;, TELKOM already provides international call services
based on VoIP technology. TELKOM records its revenues from the
VoIP service under &#147;Data and Internet Services&#148; as
this service uses IP and data-based infrastructure. See
&#147;&#151;&nbsp;Data and Internet Services&#148; below.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>Fixed Wireless Services</I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In December 2002, TELKOM began offering a limited mobility
(within a local area code) CDMA-based fixed wireless phone
service under the brand name &#147;TELKOMFlexi&#148; for both
fixed and portable handsets. TELKOM&#146;s rollout of this
service began in the three cities of Surabaya, Denpasar and
Balikpapan and, as of December&nbsp;31, 2005, was available in
231 cities. TELKOM&#146;s rollout of this limited mobility fixed
wireless service is occurring concurrently with its use of CDMA
fixed wireless technology for the development of its fixed line
network. CDMA-based fixed wireless technology enables rapid
development of telephone networks and the reduction of capital
expenditures per line by reducing and often eliminating the need
for layout of cables. TELKOM intends to continue to rapidly
develop its CDMA-based fixed wireless network and expand its
TELKOMFlexi service to other cities and regions in Indonesia. As
of December&nbsp;31, 2005, TELKOM had 1,448 BTSs and
3.7&nbsp;million line units deployed, of which 1,357 BTSs and
3.3&nbsp;million line units were financed by TELKOM and 91 BTSs
and 0.3&nbsp;million line units were established under the RSA
scheme. As of December&nbsp;31, 2005, TELKOM had 4,061,867
TELKOMFlexi lines in service.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOMFlexi subscribers have the option of postpaid and prepaid
services. Postpaid subscribers pay one-time activation charges,
ongoing monthly subscription charges and usage charges for
local, domestic-long distance and international services, which
charges are generally the same as those paid by fixed line
subscribers. Prepaid subscribers are required to purchase
starterpacks containing RUIM cards and vouchers or refills, and
pay only usage charges, which are typically higher than those
paid by postpaid subscribers. Prepaid subscribers may purchase a
Rp.35,000 starterpack, which include a Rp.35,000 voucher.
Refills are made through purchasing vouchers, or through
voucherless electronic and ATM channels, in amounts ranging from
Rp.10,000 to Rp.500,000, depending on the refill method used.
Vouchers and refills purchased remain active for limited periods
from the date of purchase, ranging from 15&nbsp;days for a
Rp.10,000 voucher or refill to 210&nbsp;days for a Rp.500,000
voucher or refill. TELKOM generally provides a 30-day grace
period after the expiry of the active period in which only
incoming calls are allowed.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOMFlexi subscribers are also provided with a number of
value-added features, such as SMS, WAP, a web portal, ring
tones, voicemail and information services, such as billing,
directory assistance and other content services. The revenues
from these services are reported in the Data and Internet
category. See &#147;&#151;&nbsp;Data and Internet Services&#148;
below. Customers generally have all features offered by cellular
services except roaming to other local area codes and
internationally. In June 2004, TELKOM launched a
&#147;FlexiCombo&#148; service which allows each subscriber to
have up to three telephone numbers, with each number assigned
for use in one of three different cities (area codes), but
without local area code or international roaming. As of
December&nbsp;31, 2005, the &#147;FlexiCombo&#148; service was
available in 231&nbsp;cities.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>Cellular Services</I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM provides its mobile cellular services through its
65%-owned subsidiary Telkomsel. Cellular revenues grew by 39.8%
from Rp.10,421.3&nbsp;billion (US$1,121.8&nbsp;million), or
30.7% of TELKOM&#146;s total operating revenues, for the year
ended December&nbsp;31, 2004 to Rp.14,571.0&nbsp;billion
(US$1,482.3&nbsp;million), or 34.8% of TELKOM&#146;s total
operating revenues, for the year ended December&nbsp;31, 2005.
Over the same period, the total number of Telkomsel&#146;s
mobile cellular subscribers (pre-paid and post-paid) increased
by 49.0% from approximately 16.3&nbsp;million at the end of 2004
to approximately 24.3&nbsp;million as of December&nbsp;31, 2005.
Of the total subscribers as of December&nbsp;31, 2005,
approximately 22.8&nbsp;million were pre-paid and approximately
1.5&nbsp;million were post-paid. Based on data developed by
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">29

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
Telkomsel from various sources, Telkomsel had an estimated 52%
share of the GSM cellular market in Indonesia as of
December&nbsp;31, 2005, compared to an estimated 54% market
share as of December&nbsp;31, 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telkomsel provided GSM cellular services in Indonesia through
its own network and internationally through the
376&nbsp;networks operated by 244 international roaming partners
in 148 countries as of the end of 2005. As of December&nbsp;31,
2005, Telkomsel had the largest network of any of the cellular
operators in Indonesia, providing coverage to over 90% of
Indonesia&#146;s population, including all counties in Indonesia
and all sub-counties in Java and Bali.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telkomsel provides its subscribers with the option of a prepaid
service under the brand name &#147;SimPATI,&#148; or a postpaid
service under the brand name &#147;KartuHALO.&#148; In May 2004,
Telkomsel launched a new prepaid brand &#147;Kartu As,&#148;
which was intended to target the lower segment of the market as
well as customers who travel frequently within Indonesia, by
offering free domestic roaming and lower tariffs on local and
domestic long-distance calls, with no difference between tariffs
for calls during peak and off-peak hours. On February&nbsp;1,
2005, Telkomsel introduced new flat tariff for
simPATI&nbsp;&#151; Rp.150 per 30 seconds for any call within
Telkomsel&#146;s network throughout Indonesia during off-peak
time. Further, on March&nbsp;15, 2005, in order to accelerate
simPATI growth and to decrease the simPATI churn rate, Telkomsel
launched a new brand called &#147;simPATI 10HOKI&#148; which
offers ten new benefits, including 10 free SMSs, a free 10
minute call and 10 free contents download. Telkomsel also offers
tailor-made postpaid services for corporate customers and a
postpaid family service under the brand name
&#147;HALOkeluarga.&#148; In August 2005, Telkomsel launched new
&#147;HALObebas&#148; packages for its post-paid customers which
allow customers who subscribe to any kartuHALO package to enjoy
free roaming facilities as part of their basic service.
Generally, postpaid subscribers pay one-time activation charges,
ongoing monthly subscription charges and usage charges for
roaming, SMS, local, domestic-long distance and international
services. All postpaid subscribers enjoy free national roaming
and also choose among the following options: (a)&nbsp;special
tariff for calls to five favorite numbers within
Telkomsel&#146;s network; (b)&nbsp;150 free SMSs per month; or
(c)&nbsp;waiver of the monthly subscription charge.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Prepaid customers purchase a starter package, the price of which
starts at Rp.15,000 for Kartu As customers and Rp.15,000 for
SimPATI customers, depending on the value of the pre-paid
voucher included in the package. For Kartu As customers, the
Rp.15,000 starter package contains a SIM card and a voucher
worth Rp.15,000. For SimPATI customers, the Rp.25,000 starter
package contains a SimPATI SIM card and a voucher worth
Rp.15,000. SimPATI subscribers can buy pre-paid vouchers ranging
in value from Rp.20,000 to Rp.1,000,000 to increase the value of
their SIM cards, while Kartu As subscribers can buy prepaid
vouchers ranging from Rp.5,000 to Rp.100,000. The
customer&#146;s prepaid account can be topped up electronically
or by supplemental refill vouchers. When refill vouchers are
purchased, subscribers call an automated telephone number and
enter a 14-digit code printed on their voucher in order to
activate or supplement their account with the new prepaid
amount. Kartu As and SimPATI starter packages and refill
vouchers may be purchased at any of Telkomsel&#146;s service
centers and distribution outlets. Electronic refills may also be
purchased at selected automatic teller machines, via telephone
banking and over the Internet. In June 2004, Telkomsel
introduced a new electronic refill service called
&#147;M-KIOS&#148; which allows prepaid customers to refill with
a mobile handset as the transaction terminal through secure
means. In September 2004, Telkomsel introduced an automatic
refill service that permits payments through VISA credit cards,
pursuant to which a prepaid customer can elect to have a prepaid
account refilled automatically in one of the following ways:
(i)&nbsp;whenever the prepaid account balance falls below
Rp.10,000; (ii)&nbsp;a fixed amount monthly; or (iii)&nbsp;on
demand, through SMS. The prepaid customer credits generally have
a predetermined expiry date.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Provided that they meet certain credit-related eligibility
requirements, SimPATI customers may sign up for Telkomsel&#146;s
post-paid KartuHALO services at any time without having to
change their telephone numbers. While Kartu As and SimPATI
customers do not pay an activation fee or monthly subscription
charges, they pay higher usage charges than postpaid subscribers.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">30

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On May&nbsp;26, 2005, Telkomsel launched its trial run of 3G
services in Jakarta. Telkomsel became the first Indonesian
telecommunication company to implement a trial run of such
services. Telkomsel continues to expand its 3G&nbsp;network and
is conducting feasibility studies, field tests and marketing of
its 3G&nbsp;services. In February 2006, Telkomsel, Indosat,
Excelcomindo, PT Hutchison CP Telecommunications
(&#147;HCPT&#148;) and PT Lippo Telekom were awarded separate
licenses to operate the 3G network. The licenses will expire in
ten years. Telkomsel has already completed its trial run period,
but the service is not yet available to the public.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telkomsel also offers cellular users value added services such
as SMS, international roaming, GPRS, MMS, multi-party calling,
call forwarding, call waiting, caller number display and
non-display, ring back tone (which allows callers to the
subscriber of the ring back tone service to hear a pre-selected
ringing tone), mobile banking, SMS to e-mail services and other
personal mobile data services, the revenues from which are
reported in the Data and Internet category. See
&#147;&#151;&nbsp;Data and Internet Services&#148; below.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth selected historical information
on Telkomsel&#146;s subscriber base for the periods indicated:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="59%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>As of or for the Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Cellular
    subscribers<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    KartuHALO (Postpaid)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,007,034</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,327,549</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,470,755</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SimPATI (Prepaid)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,581,773</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,557,758</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,004,631</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Kartu As (Prepaid)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,405,201</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,793,967</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Deactivations<SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    KartuHALO (Postpaid)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>265,355</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>317,020</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>372,921</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SimPATI (Prepaid)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,823,025</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,470,819</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,836,633</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Kartu As (Prepaid)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>824,489</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,105,848</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Average monthly churn
    rate<SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    KartuHALO (Postpaid)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.3</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.3</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.1</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SimPATI (Prepaid)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.8</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.2</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Kartu As (Prepaid)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.9</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>ARPU<SUP style="font-size: 85%; vertical-align: text-top">(4)</SUP></B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    KartuHALO (Postpaid) (Rp.&#146;000)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>314</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>304</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>291</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SimPATI (Prepaid) (Rp.&#146;000)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>95</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>84</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>84</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Kartu As (Prepaid) (Rp.&#146;000)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>48</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>45</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Prepaid subscribers may purchase SIM-cards and refill vouchers
    with values ranging from Rp.20,000 to as much as Rp.1,000,000.
    For Kartu As, the voucher values range from Rp.5,000 to
    Rp.100,000. The following table shows the respective active
    periods for Telkomsel&#146;s SimPATI and Kartu As prepaid
    packages, respectively:</TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 8.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="63%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="32%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Period during which subscribers</B></TD><TD></TD>
</TR>

<TR>
    <TD align="center" nowrap><B>SimPATI Value of Voucher</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>will have access to services</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rp.20,000</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>45 days</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rp.50,000</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>60 days</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rp.100,000</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>90 days</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rp.150,000</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>150 days</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rp.200,000</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>180 days</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rp.300,000</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>210 days</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rp.500,000</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>240 days</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rp.1,000,000</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>270 days</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">31

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 8.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="63%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="32%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Period during which subscribers</B></TD><TD></TD>
</TR>

<TR>
    <TD align="center" nowrap><B>Kartu As Value of Voucher</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>will have access to services</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rp.5,000</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30 days</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rp.10,000</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30 days</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rp.25,000</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30 days</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rp.50,000</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30 days</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rp.100,000</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30 days</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Includes voluntary and involuntary deactivations.</TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    The average monthly churn rate for a year is computed by adding
    the monthly churn rates during the year and dividing by 12. The
    monthly churn rate is computed by dividing the number of
    subscribers deactivated during the month by the number of
    subscribers at the beginning of the month.</TD>
</TR>

<TR valign="top">
    <TD>(4)&nbsp;</TD>
    <TD align="left">
    Refers to Average Revenue per User which is calculated by taking
    the sum of the ARPU for each month of the year and dividing by
    12. ARPU is computed by dividing total cellular revenues for
    either postpaid or prepaid subscribers (excluding connection
    fees, interconnection revenues, international roaming revenues
    from non-subscribers and dealer discounts) for each month by the
    respective average number of postpaid or prepaid cellular
    subscribers for that month.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;
In June 2004, Telkomsel introduced an enhanced data transmission
technology known as &#147;EDGE,&#148; or Enhanced Data rates for
GSM Evolution, which offers enhanced data transmission speeds
for handsets equipped to handle EDGE. As of December&nbsp;31,
2005, EDGE was available in Jakarta, Surabaya, Batam, Semarang
and Bali. Telkomsel intends to continue to develop EDGE
technology and expand this service to other major cities in
Indonesia.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Joint Operation Scheme</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM and its remaining KSO partner, PT Bukaka SingTel
International, provided fixed line and other services in
Regional Division VII. In 2005, TELKOM&#146;s revenues from KSO
Regional Division VII (including amortization of unearned
initial investor payments) contributed Rp.588.7&nbsp;billion
(US$59.9&nbsp;million), or 1.4% of total operating revenues.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM entered into agreements to establish the KSOs in 1995 and
pursuant to such agreements transferred the right to operate
Regional Divisions I, III, IV, VI and VII to private sector
consortia, each of which involved one or more prominent
international telecommunications operators. TELKOM then retained
the right to operate divisions II and V, its two largest
divisions. The KSO Agreements provided for the relevant KSO
partner to manage and operate the Regional Division for a fixed
term, undertake the construction of a specified number of fixed
lines and, at the end of the fixed term, transfer the existing
and new telecommunications facilities in the region to TELKOM
for a pre-determined agreed amount of compensation. The KSO
Agreements also provided for TELKOM to receive the following:
(a)&nbsp;one-time initial payment from the KSO partners;
(b)&nbsp;guaranteed minimum monthly payments or Minimum TELKOM
Revenues (&#147;MTR&#148;); and (c)&nbsp;additional monthly
revenue-sharing payments or Distributable TELKOM Revenues
(&#147;DTR&#148;) from the revenues of the KSO Unit after
payments of MTR and certain operating expenses. The KSO partners
were granted licenses to provide fixed line services in the
respective regions.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Following the Indonesian economic crisis that began in mid-1997,
certain KSO partners experienced difficulties in fulfilling
their obligations to TELKOM. In order to assist the KSO partners
in meeting their obligations and to maintain the continuity of
the KSO Agreements, all of the KSO partners entered into a
Memorandum of Understanding with TELKOM on June&nbsp;5, 1998
which reduced the minimum line construction obligations of the
KSO partners, decreased TELKOM&#146;s share of KSO revenues for
1998 and 1999 and cancelled TELKOM&#146;s option to purchase the
assets of the KSO before the end of the KSO period. Beginning
January&nbsp;1, 2000, the parties reverted to the terms of the
original KSO agreements with respect to MTR and DTR payments.
Due to the severity of the crisis, these measures did not solve
the significant difficulties faced by the KSO partners and
TELKOM has in recent years acquired or entered into agreements
to acquire control of its KSO partners in Regional Divisions I,
III and VI, and amended the terms of the KSO Agreement with
respect to Regional Division IV to acquire control of the KSO IV
operations.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">32

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM consolidated the revenues from Regional Division I
(Sumatera) and Regional Division VI (Kalimantan) following their
acquisitions in 2001 and 2002, respectively. TELKOM&#146;s
portion of KSO revenues for the last three years
(2003&nbsp;&#151; 2005) are indicated in the following table:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="43%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2" align="center" nowrap><B>KSO Division</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>MTR</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>DTR</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>MTR</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>DTR</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>MTR</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>DTR</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>(Rp. in billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>(Rp. in billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>(Rp. in billion)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Division III (West Java and
    Banten)<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>242.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>90.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Division IV (Central
    Java)<SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>404.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>184.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Division VII (Eastern Indonesia)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>253.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>308.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>260.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>333.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>268.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>318.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>899.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>583.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>296.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>349.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>268.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>318.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    For 2003, MTR and DTR are from January 1 to July&nbsp;31, 2003.
    TELKOM consolidated Regional Division III (West Java and Banten)
    from July&nbsp;31, 2003 following the acquisition of a 100%
    equity interest in AriaWest on July&nbsp;31, 2003. TELKOM
    consolidated Rp.377.9&nbsp;billion of operating revenues from
    Regional Division III (West Java and Banten) from July&nbsp;31,
    2003 through December&nbsp;31, 2003, Rp.1,016.8&nbsp;billion and
    Rp.1,498.9&nbsp;billion in 2004 and 2005, respectively.</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    On January&nbsp;20, 2004, TELKOM and MGTI entered into an
    agreement to amend and restate the KSO Agreement with respect to
    Regional Division IV (Central Java). See Item&nbsp;10.
    &#147;Additional Information&nbsp;&#151; C. Material
    Contracts&nbsp;&#151; PT Mitra Global Telekomunikasi
    Indonesia.&#148; As a result of the amended and restated KSO
    agreement, TELKOM acquired Regional Division IV. TELKOM
    consolidated Rp.1,398.0&nbsp;billion and Rp.1,653.2&nbsp;billion
    of operating revenues from Regional Division IV (Central Java)
    from February&nbsp;1, 2004 through December&nbsp;31, 2004 and in
    2005, respectively. For 2004, MTR and DTR for Regional Division
    IV represent MTR and DTR generated by Regional Division IV in
    January 2004.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;
The following describes the developments in recent years in
which TELKOM acquired or entered into agreements to acquire
control of its KSO partners in Regional Divisions I, III and VI,
and amended the terms of the KSO Agreement with respect to
Regional Division IV to acquire control of the KSO IV operations.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On April&nbsp;19, 2002, TELKOM entered into a Conditional Sale
and Purchase Agreement to acquire 100% of the issued and paid up
share capital of its KSO partner in Regional Division&nbsp;I,
Pramindo. Under the terms of the agreement, TELKOM agreed to
acquire the shares of Pramindo in three tranches: in August 2002
(30%), September 2003 (15%) and December 2004 (55%). TELKOM has
provided US$384.4&nbsp;million in its accounts as the aggregate
consideration for this transaction. Of the
US$384.4&nbsp;million, TELKOM made an initial payment of
US$9.3&nbsp;million (Rp.82&nbsp;billion) in August 2002 and
issued promissory notes (series&nbsp;I and II) dated August 2002
for the remaining amount. The agreement granted the selling
shareholders a number of protective rights and was conditional
upon TELKOM meeting its payment obligations under the promissory
notes. The series&nbsp;I promissory notes had a face value of
approximately US$372.2&nbsp;million, while the aggregate amount
of the series&nbsp;II promissory notes was estimated to be
approximately US$2.9&nbsp;million. The promissory notes were
payable in ten unequal quarterly installments through December
2004 which were funded by monthly amounts transferred by TELKOM
to an escrow account. Under the agreement, TELKOM also provided
a loan of US$86&nbsp;million (Rp.765&nbsp;billion) to Pramindo
which was used to repay loans from the IFC, one of the selling
shareholders. TELKOM also made an additional payment of
Rp.250&nbsp;billion in respect of a working capital
reimbursement to the selling shareholders. TELKOM obtained
control of Pramindo as of the closing in August 2002. On
January&nbsp;28, 2004, TELKOM signed a short-term loan agreement
with ABN AMRO Bank N.V. Jakarta in the amount of approximately
US$130&nbsp;million and on March&nbsp;15, 2004 TELKOM used the
loan proceeds to repurchase the outstanding promissory notes
that were due on June&nbsp;15, 2004, September&nbsp;15, 2004 and
December&nbsp;15, 2004. This allowed TELKOM to accelerate the
purchase of the remaining 55% of Pramindo that it did not yet
own. As of the date of this Annual Report, TELKOM beneficially
owns 100% of Pramindo.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On July&nbsp;31, 2003, TELKOM acquired 100% of the shares of its
KSO partner for Regional Division&nbsp;III, AriaWest for an
aggregate consideration of US$38.67&nbsp;million in cash
(US$20&nbsp;million of which was paid when the purchase
agreement was signed on May&nbsp;8, 2002 and the remaining
US$18.67&nbsp;million was paid on July&nbsp;31, 2003) and
US$109.1&nbsp;million in promissory notes. The promissory notes,
which are interest-
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
free, are payable in 10&nbsp;semi-annual installments. At the
same time, in consideration of the release of AriaWest&#146;s
outstanding obligations to its lenders, TELKOM also repaid
approximately US$99&nbsp;million of AriaWest&#146;s debt
(including interest of US$25.0&nbsp;million) on behalf of
AriaWest and entered into a new loan agreement for approximately
US$197&nbsp;million with AriaWest&#146;s lenders. TELKOM and
AriaWest also entered into a settlement agreement settling
claims and disputes involving alleged material breaches of the
KSO Agreement by each party. Pursuant to the settlement
agreement, TELKOM and AriaWest irrevocably settled, discharged
and released claims and counterclaims in their ICC arbitration
proceeding and TELKOM agreed to pay a settlement amount of
US$20&nbsp;million. As a result of the acquisition of AriaWest
and the settlement of the ICC arbitration in 2002, for the year
ended December&nbsp;31, 2002 TELKOM reversed the provision of
Rp.511.9&nbsp;billion which was previously made with respect to
certain receivables from KSO Unit III and accrued the settlement
amount of Rp.179.0&nbsp;billion in its consolidated financial
statements for the year ended December&nbsp;31, 2002. The ICC
arbitration proceeding was settled as of July&nbsp;31, 2003. On
December&nbsp;30, 2004, TELKOM fully repaid the balance of the
AriaWest loan that it assumed, amounting to
US$151.9&nbsp;million (including principal due in December 2004
of US$24.6&nbsp;million and interest of US$4.3&nbsp;million).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On January&nbsp;20, 2004, TELKOM and MGTI entered into an
agreement to amend and restate the KSO Agreement with respect to
Regional Division&nbsp;IV. Under the amended and restated KSO
agreement, the rights to operate fixed-line telecommunication
services in KSO&nbsp;IV region are transferred to TELKOM and
KSO&nbsp;IV is operated under the management, supervision,
control and responsibility of TELKOM. In addition, for the
remaining KSO period, TELKOM is entitled at its sole discretion
and expense to construct new telecommunications facilities in
Regional Division&nbsp;IV. MGTI receives fixed monthly payments,
while TELKOM is entitled to the balance of the KSO revenues
after the monthly amounts due to MGTI and operating expenses. If
the KSO&nbsp;IV unit is unable to or does not for any reason pay
MGTI the fixed monthly payments due to it, TELKOM is obligated
to make up any deficiency. At the end of the KSO period
(December&nbsp;31, 2010), all rights, title and interest of MGTI
in existing property, plant and equipment (including new
additional installations) and inventories shall be transferred
to TELKOM at no cost. As a result of the amended and restated
KSO agreement, TELKOM obtained the legal right to control
financial and operating decisions of Regional Division IV for a
purchase price of US$390.7&nbsp;million, or
Rp.3,285&nbsp;billion, which represents the present value of the
fixed monthly payments (totaling US$517.1&nbsp;million) to be
paid by TELKOM to MGTI from 2004 through 2010 plus direct cost
of the business combination. TELKOM has accounted for this
transaction as a business combination using the purchase method
of accounting in 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On May&nbsp;17, 2001, TELKOM acquired 90.32% of the issued and
outstanding shares of its KSO partner for Regional Division VI,
Dayamitra, and purchased a call option and granted a put option
with respect to the 9.68% remaining shares of Dayamitra, for an
aggregate consideration of approximately US$130.8&nbsp;million
(including a US$8.9&nbsp;million post-closing working capital
adjustment to the purchase price, and excluding
consultants&#146; fees of approximately US$3.3&nbsp;million,
which was capitalized as part of the acquisition cost) which was
to be paid in installments. TELKOM paid an initial amount of
US$18.3&nbsp;million on May&nbsp;17, 2001, the
US$8.9&nbsp;million post-closing working capital adjustment to
the purchase price on August&nbsp;10, 2001 and the balance of
US$103.6&nbsp;million in eight quarterly installments of
approximately US$12.9&nbsp;million between August&nbsp;17, 2001
and May&nbsp;17, 2003. On December&nbsp;14, 2004, TELKOM
exercised its call option to acquire the remaining 9.68% of the
shares of Dayamitra with a strike price of US$16.2&nbsp;million.
The purchase price for 9.68% shares of Dayamitra was
US$22.1&nbsp;million (Rp.203.0&nbsp;billion), which represents
the present value of the option strike price of
US$16.2&nbsp;million to be paid to an escrow account from
December&nbsp;26, 2004 through March&nbsp;26, 2006, plus the
option purchase price of US$6.3&nbsp;million and payment for
Dayamitra&#146;s adjusted working capital of US$1.0&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On June&nbsp;11, 2002, TELKOM and its KSO partner for Regional
Division VII, PT Bukaka SingTel International (&#147;Bukaka
SingTel&#148;), entered into a Memorandum of Understanding
pursuant to which they agreed to cooperate in providing
infrastructure for fixed wireless access using CDMA 2000 1x in
KSO VII region. On January&nbsp;14, 2003, TELKOM and Bukaka
SingTel entered into a Co-Operation Agreement on Fixed Wireless
CDMA Facilities Construction in KSO Regional Division VII (the
&#147;Co-
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
Operation Agreement&#148;) that implemented the terms of the
Memorandum of Understanding. Under the terms of the Co-Operation
Agreement, TELKOM, through its Fixed Wireless Division, will
invest US$30.2&nbsp;million and Rp.28.4&nbsp;billion for the
construction of fixed wireless CDMA facilities for 146,700 line
units in Denpasar, Makasar, Manado, Kupang and Mataram, which
facilities will be managed, operated and maintained by Bukaka
SingTel. The new facilities are expected to be completed by
2006, with TELKOM and Bukaka SingTel sharing the revenues
generated by these new facilities. See Item&nbsp;10.
&#147;Additional Information&nbsp;&#151; C. Material
Contracts.&#148;
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM consolidated Dayamitra in 2001, Pramindo in 2002 and
AriaWest in 2003, upon acquisition of a majority ownership
interest or control in those KSO partners. In addition, under
the amended and restated KSO Agreement with respect to Regional
Division IV entered into on January&nbsp;20, 2004, TELKOM
consolidated the operating results of KSO IV from
February&nbsp;1, 2004, being the nearest convenient balance
date. Accordingly, the revenue sharing percentage in those KSOs
is no longer relevant. As of December&nbsp;31, 2005, PT Bukaka
SingTel International is the only remaining KSO partner that has
not been acquired or is not controlled by TELKOM. The following
table sets forth certain information regarding KSO VII as of
December&nbsp;31, 2005, which has been derived from the KSO
Agreements, amendments to the KSO Agreements and other related
sources.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="49%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Division VII</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    KSO Partner</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    PT Bukaka SingTel International</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Shareholders in the KSO partner:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign telecommunications operator</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Singapore Telecom International Pte. Ltd. (40.00%)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Indonesian and other shareholders</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    PT Bukaka Telekomindo International (51.50%); Transpac Capital
    (8.50%)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenue Sharing (TELKOM: KSO Partner)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    35&nbsp;:&nbsp;65</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    End of KSO Period</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    2010</TD>
</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Interconnection Services</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM receives revenues from other telecommunications operators
providing fixed line, cellular, international long-distance and
other services that interconnect with TELKOM&#146;s network. In
2005, revenues from interconnection services contributed
Rp.7,742.1&nbsp;billion (US$787.6&nbsp;million), or 18.5% of
total operating revenues.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM enters into interconnection agreements with one- to
three-year terms with other telecommunications network
operators, including Indosat and Satelindo, Indonesia&#146;s IDD
service providers and cellular operators, establishing the fees
payable by the respective operators and the procedures for
routing calls through the networks of the respective operators.
Most of the short-term (one-year) interconnection agreements are
entered into with telecommunications network operators.
Beginning in 2004, following the merger of Indosat, Indosat
Multi Media Mobile (&#147;IM3&#148;) and Satelindo in 2003,
Indosat assumed the obligations of Satelindo and IM3 under their
respective interconnection agreements with TELKOM.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2006, as a result of new regulations regarding DLD and IDD
services and the implementation of the cost-based
interconnection scheme, which was promulgated on
February&nbsp;8, 2006, TELKOM expects to amend all of its
interconnection agreements with other domestic network operators
to adjust, among other provisions, routing procedures, network
configuration and interconnection fees in accordance with the
cost-based interconnection scheme. Accordingly, there can be no
assurance that TELKOM&#146;s interconnection revenues and costs
will not change. For further information on the interconnection
scheme, see Item&nbsp;4. &#147;Information on the
Company&nbsp;&#151; B. Business Overview&nbsp;&#151;
Regulations&nbsp;&#151; Interconnection&#148;; and Item&nbsp;3.
&#147;Key Information&#148;&nbsp;&#151; D. Risk
Factors&nbsp;&#151; Risks relating to TELKOM and its
subsidiaries&nbsp;&#151; TELKOM operates in a legal and
regulatory environment that is undergoing significant reforms
and such reforms may adversely affect TELKOM&#146;s
business&#148;.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM&#146;s interconnection traffic volumes are set forth in
the following table for the periods indicated:
</DIV>

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<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>Year Ended December 31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2001</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>(millions of minutes)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Mobile Cellular
    Interconnection<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Incoming paid minutes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,355.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,830.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,463.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,235.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,863.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Outgoing paid minutes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,689.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,854.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,872.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,448.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,514.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Fixed Line
    Interconnection<SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Incoming paid minutes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>115.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>128.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>130.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>136.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>612.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Outgoing paid minutes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>51.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>493.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Satellite Phone Interconnection</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Incoming paid minutes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Outgoing paid minutes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>International
    Interconnection<SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Incoming paid minutes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>286.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>303.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>444.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>427.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>596.4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Outgoing paid minutes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>241.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>200.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>149.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>158.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>185.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Total</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Incoming paid minutes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,760.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,275.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,054.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,814.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,083.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Outgoing paid minutes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,966.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,100.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,060.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,665.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,200.4</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Includes interconnection with Telkomsel.</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Fixed line interconnection minutes reflect interconnection with
    the networks of PT Bakrie Telecom (formerly PT Radio Telepon
    Indonesia or Ratelindo), PT Batam Bintan Telekomunikasi, and for
    2004 and 2005, Indosat.</TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    International interconnection minutes are derived from
    interconnection with Indosat&#146;s international network and,
    starting 2004, incoming and outgoing calls using TIC 007 as well.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM&#146;s paid minutes from Telkomsel for 2001&nbsp;&#151;
2005 are set forth in the following table.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="55%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>Year Ended December 31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2001</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>(millions of minutes)</B></TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Incoming paid minutes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,289.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,672.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,011.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,354.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,709.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Outgoing paid minutes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,266.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,001.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,610.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,422.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,251.5</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On June&nbsp;7, 2004, TELKOM began offering IDD fixed line
services under the brand name &#147;TIC 007.&#148; Revenues from
IDD services are reported as international interconnection
revenues. In order to facilitate interconnection of
international calls, TELKOM has entered into international
telecommunications service agreements with telecommunications
operators in several countries. In addition, as TELKOM does not
have agreements with telecommunication operators in each of its
IDD destinations, TELKOM has entered into agreements with
certain major carriers such as Singapore Telecommunications
Limited (&#147;SingTel&#148;), Telekom Malaysia Berhad
(&#147;Telekom Malaysia&#148;), MCI Inc. (&#147;MCI&#148;) and
others for such operators to act as hubs to route international
calls to their destinations.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Network Services</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM provides satellite transponder leasing, satellite
broadcasting, VSAT, audio distribution, satellite-based leased
lines and terrestrial-based leased lines. In 2005, revenues from
network services contributed Rp.586.6&nbsp;billion
(US$59.7&nbsp;million), or 1.4% of total operating revenues.
TELKOM&#146;s customers for network services include businesses
and other telecommunications operators. Customers may enter into
agreements that can be for services as brief as a few minutes in
the case of broadcasts or long-term agreements for services over
the course of one to five years.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">36

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Data and Internet Services</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM provides SMS for fixed line, fixed wireless and cellular
phones, dial-up and broadband Internet access, data network
services (including VPN frame relay and IP VPN), VoIP services
for international calls, ISDN lines and other multimedia
services. In 2005, revenues from data and Internet services
contributed Rp.6,934.3&nbsp;billion (US$705.4&nbsp;million), or
16.6% of total operating revenues.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In October 2004, TELKOM introduced a premium prepaid dial-up
Internet access service. In 2005, an average of approximately
500,000 telephone subscribers accessed its TELKOMNet Instan and
premium prepaid dial-up Internet service per month, representing
an increase of 10% over the prior year. Subscribers utilized a
total of 2.8&nbsp;billion minutes of TELKOMNet Instan and
877,921 minutes of premium prepaid dial-up service in 2005. As
of December&nbsp;31, 2005, TELKOM also had 30,622 broadband
Internet access subscribers, which was available in Jakarta and
Surabaya.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In September 2002, TELKOM began offering a premium VoIP
international calling service under the name
&#147;TELKOMGlobal-017&#148; and a standard VoIP international
calling service under the name &#147;TELKOMSave&#148; and TELKOM
is currently providing both services in several cities in
Indonesia, including Jakarta, Surabaya, Bandung, Medan and
Denpasar. As of December&nbsp;31, 2005, TELKOM&#146;s VoIP
services allowed subscribers access to 633 destination points in
236 countries through agreements which TELKOM has entered into
with eight global carriers (including two global carriers for
outgoing only, three global carriers for incoming only and three
global carriers for incoming and outgoing) and wholesalers that
allow TELKOM to access their international networks. VoIP is a
low-cost phone service that is accessed by dialing a special
international long-distance prefix. On March&nbsp;11, 2004, the
MoC issued Decree No.&nbsp;28/2004 and Decree No.&nbsp;31/2004,
which stated that VoIP access codes must be changed from three
digits to five digits (&#147;010XY&#148;), and on April&nbsp;1,
2005, the MoCI announced that the five digit VoIP access codes
must be implemented by all operators by December&nbsp;31, 2005.
On May&nbsp;17, 2005, MoCI Regulation&nbsp;No.&nbsp;7/2005 was
ratified, which changes the VoIP access codes to
(i)&nbsp;&#147;010XY&#148; for single stage method; and (ii)
&#147;170XY&#148; for double stage method, respectively,
effective January&nbsp;1, 2006. The single stage method refers
to direct dialing services without subscription validation. The
double stage method refers to direct dialing services whereby
subscription validation is required before dialing the
destination number. As at January 2006, the access codes for
TELKOM&#146;s VoIP service are &#147;017&#148; for single stage
and &#147;17017 (prepaid) and 17071 (postpaid)&#148; for double
stage.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company plans to increase the number of access points in
Indonesia and abroad from which its customers are able to access
its VoIP services. In 2005, there was a total of
300.6&nbsp;million outgoing (using either TELKOMSave or
TELKOMGlobal) and incoming (from TELKOM&#146;s global partners)
VoIP minutes called, representing an increase in VoIP minutes
called of 11.6&nbsp;million, or 4.0%, over the prior year.
Incoming VoIP minutes called increased by 21.0% from
178.2&nbsp;million minutes in 2004 to 215.6&nbsp;million in
2005. However, outgoing VoIP minutes called decreased by 23.3%
from 110.8&nbsp;million minutes in 2004 to 85.0&nbsp;million
minutes in 2005. VoIP revenues (consisting of incoming and
outgoing) decreased by Rp.26.2&nbsp;billion, or 8.2%, in 2005,
principally due to a 27.8% decrease in traffic of outgoing
international VoIP calls, primarily resulting from TELKOM&#146;s
focused marketing efforts to promote TELKOM&#146;s IDD service
<FONT style="white-space: nowrap">(TIC-007),</FONT> an
alternative to VoIP.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Certain information about TELKOM VoIP services is set forth in
the following table:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="25%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="34%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="center" nowrap><B>Item</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>TELKOMGlobal 017</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>TELKOMSave</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Tariff</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Discount up to 40% of normal IDD rate</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Discount up to 60% of normal IDD rate</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dial</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    One stage</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Two stage</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Quality/Technology</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Premium VoIP</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Standard VoIP</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenue-Sharing Arrangements
(PBHs)</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM has entered into separate agreements with several
investors under revenue-sharing arrangements to develop fixed
lines, public card-phone booths (including their maintenance) and
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">37

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
related supporting telecommunications facilities. In 2005,
revenues from revenue-sharing arrangements amounted to
Rp.302.3&nbsp;billion (US$30.8&nbsp;million), or 0.7% of
TELKOM&#146;s total operating revenues.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, the Company has 90 revenue-sharing
arrangements with 63&nbsp;partners. The revenue-sharing
arrangements were located mostly in Palembang, Pekanbaru,
Jakarta, East Java and Kalimantan with concession periods
ranging from 16 to 176&nbsp;months.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the revenue-sharing arrangements, the investors finance
the costs incurred in constructing telecommunications
facilities. Upon completion of the construction, the Company
manages and operates the facilities and generally bears the cost
of repairs and maintenance during the revenue-sharing period.
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.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Generally, the revenues earned from the customers in the form of
line installation charges are allocated in full to the
investors. The revenues from outgoing telephone pulses and
monthly subscription charges are shared between the investors
and the Company based on certain agreed ratios.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under revenue-sharing arrangements entered into before October
2002, TELKOM guaranteed a specific internal rate of return to
the investors. However, since October 2002, TELKOM no longer
guarantees an internal rate of return for new revenue sharing
arrangements it enters into. In February 2004, TELKOM began
implementing its PPLT program in the Regional Divisions that it
controls. Pursuant to the PPLT program, division heads are
allowed to enter into agreements for the development of
telecommunications facilities with partners within each regional
division. In deciding what agreements to enter into, division
heads are required to consider certain business factors and act
within specified parameters. Priority is also given to the
development of CDMA facilities.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
To date, TELKOM has entered into 32 PPLTs for fixed wireless
services and 53 PPLTs for fixed wireline services.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>Other Services</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM also provides a variety of other services, such as:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    telephone directory, which TELKOM provides through its
    majority-owned subsidiary, Infomedia;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    cable and pay television and related services, which it provides
    through its majority-owned subsidiary, Indonusa; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    telex and telegram services.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2005, revenues from other services amounted to
Rp.301.0&nbsp;billion (US$30.6&nbsp;million), or 0.7% of
TELKOM&#146;s total operating revenues.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Network Infrastructure</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Fixed line Network and
Backbone</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Fixed Wireline Network.</I> TELKOM&#146;s fixed line network
comprises a hierarchy of exchanges ranging from local exchanges
through trunk exchanges. Each local exchange is connected to the
subscriber&#146;s premises by equipment and facilities called
outside plant. Outside plant includes wireline (optical fiber
and copper) and wireless local transmission links and the
distribution facilities joining them. All of TELKOM&#146;s
switching facilities at the local and trunk exchanges are now
digital. TELKOM believes that this substantially increases
network efficiency, performance and call routing flexibility.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM&#146;s total number of fixed wireline lines in service in
all divisions, including those lines in KSO VII which are owned
by the KSO&nbsp;VII partner and will be transferred to TELKOM at
the end of the
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">38

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
KSO period, has increased from approximately 8.6&nbsp;million as
of December&nbsp;31, 2004 to approximately 8.7&nbsp;million as
of December&nbsp;31, 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth statistics relating to
TELKOM&#146;s fixed wireline network since 2001:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="37%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>As of or for the Year Ended December 31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2" align="center" nowrap><B>Operating Statistics</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2001<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002<SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003<SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004<SUP style="font-size: 85%; vertical-align: text-top">(4)</SUP></B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005<SUP style="font-size: 85%; vertical-align: text-top">(4)</SUP></B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Exchange capacity</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Non-KSO Divisions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,135,108</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,643,688</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,810,766</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,786,887</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,138,167</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    KSO
    Divisions<SUP style="font-size: 85%; vertical-align: text-top">(9)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,669,336</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,459,950</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,608,455</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>954,465</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,045,366</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,804,444</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,103,638</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,419,221</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,741,352</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,183,533</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Installed lines</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Non-KSO Divisions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,725,268</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,157,149</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,235,035</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,264,999</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,497,255</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    KSO
    Divisions<SUP style="font-size: 85%; vertical-align: text-top">(9)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,316,406</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,234,892</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,548,070</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>931,999</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>998,901</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,041,674</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,392,041</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,783,105</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,196,998</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,496,156</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Lines in
    service<SUP style="font-size: 85%; vertical-align: text-top">(5)</SUP></B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Non-KSO Divisions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,270,243</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,701,900</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,792,300</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,714,977</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,787,693</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    KSO
    Divisions<SUP style="font-size: 85%; vertical-align: text-top">(9)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,948,695</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,039,608</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,422,028</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>844,373</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>898,438</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,218,938</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,741,508</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,214,328</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,559,350</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,686,131</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Subscriber lines</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Non-KSO Divisions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,005,106</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,386,430</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,441,973</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,323,304</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,413,769</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    KSO
    Divisions<SUP style="font-size: 85%; vertical-align: text-top">(9)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,831,168</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,952,226</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,365,114</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>816,208</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>869,631</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,836,274</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,338,656</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,807,087</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,139,512</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,283,400</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Public telephones</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Non-KSO Divisions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>265,137</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>315,470</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>350,327</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>391,673</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>373,924</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    KSO
    Divisions<SUP style="font-size: 85%; vertical-align: text-top">(9)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>117,527</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>87,382</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>56,914</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28,165</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28,807</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>382,664</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>402,852</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>407,241</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>419,838</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>402,731</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Leased lines in service</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Non-KSO
    Divisions<SUP style="font-size: 85%; vertical-align: text-top">(6)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,973</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,193</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,213</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,887</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,333</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    KSO
    Divisions<SUP style="font-size: 85%; vertical-align: text-top">(9)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,631</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,879</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,162</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>382</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>575</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,604</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,072</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,375</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,269</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,908</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Fixed wireline subscriber pulse
    production<SUP style="font-size: 85%; vertical-align: text-top">(7)
    </SUP>(millions)</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Non-KSO Divisions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,342</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44,326</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,848</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>58,314</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>57,926</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    KSO
    Divisions<SUP style="font-size: 85%; vertical-align: text-top">(9)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,047</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,788</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,413</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,838</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,743</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>58,389</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>61,114</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>62,261</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>65,152</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>67,669</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Call completion rate&nbsp;(%)</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Local</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Non-KSO Divisions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>75.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>75.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>76.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>78.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>80.4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    KSO
    Divisions<SUP style="font-size: 85%; vertical-align: text-top">(9)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>72.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>75.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>78.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>77.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>80.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Combined</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>75.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>77.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>78.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>80.4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Domestic long-distance</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Non-KSO Divisions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>65.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>65.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>67.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>70.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>74.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    KSO
    Divisions<SUP style="font-size: 85%; vertical-align: text-top">(9)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>85.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>68.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>74.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>74.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>75.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Combined</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>65.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>66.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>69.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>71.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>74.3</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">39

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="37%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>As of or for the Year Ended December 31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2" align="center" nowrap><B>Operating Statistics</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2001<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002<SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003<SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004<SUP style="font-size: 85%; vertical-align: text-top">(4)</SUP></B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005<SUP style="font-size: 85%; vertical-align: text-top">(4)</SUP></B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Fault
    rate<SUP style="font-size: 85%; vertical-align: text-top">(8)</SUP></B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Non-KSO Divisions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    KSO
    Divisions<SUP style="font-size: 85%; vertical-align: text-top">(9)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Combined</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.6</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    For 2001, Non-KSO Divisions refer to Divisions&nbsp;II, V and
    VI, while KSO Divisions refer to Divisions&nbsp;I, III, IV and
    VII.</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    For 2002, Non-KSO Divisions refer to Divisions&nbsp;I, II, V and
    VI, while KSO Divisions refer to Divisions&nbsp;III, IV and VII.</TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    For 2003, Non-KSO Divisions refer to Divisions&nbsp;I, II, III,
    V and VI, while KSO Divisions refer to Divisions&nbsp;IV and VII.</TD>
</TR>

<TR valign="top">
    <TD>(4)&nbsp;</TD>
    <TD align="left">
    For 2004 and 2005, Non-KSO Divisions refer to Divisions&nbsp;I,
    II, III, IV, V and VI, while KSO Divisions refer to
    Division&nbsp;VII.</TD>
</TR>

<TR valign="top">
    <TD>(5)&nbsp;</TD>
    <TD align="left">
    Lines in service are comprised of subscriber lines and public
    telephone lines and include the following number of lines in
    service operated by TELKOM pursuant to revenue-sharing
    arrangements. Such lines in service under revenue-sharing
    arrangements amounted to 430,477, 443,316, 511,108, 396,926 and
    201,485 as of December&nbsp;31, 2001, 2002, 2003, 2004 and 2005,
    respectively.</TD>
</TR>

<TR valign="top">
    <TD>(6)&nbsp;</TD>
    <TD align="left">
    Excludes leased lines for TELKOM&#146;s network and multimedia
    businesses.</TD>
</TR>

<TR valign="top">
    <TD>(7)&nbsp;</TD>
    <TD align="left">
    Consists of pulses generated from local and domestic
    long-distance calls, excluding calls made from pay phones and
    mobile cellular phones.</TD>
</TR>

<TR valign="top">
    <TD>(8)&nbsp;</TD>
    <TD align="left">
    Faults per 100 connected lines per month. The calculation
    formula was changed in January 2002 to include indoor
    installation and mass fault. The previous measure of fault
    consisted of exchange and outdoor cable fault.</TD>
</TR>

<TR valign="top">
    <TD>(9)&nbsp;</TD>
    <TD align="left">
    Divisions classified as KSO Divisions differ year by year due to
    acquisitions in certain years. See footnotes (1)&nbsp;to
    (4)&nbsp;above.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth certain information relating to
the Company&#146;s (including KSOs) fixed line network in each
of its operating divisions as of December&nbsp;31, 2005:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 8.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="23%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Division III</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(West Java</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Division IV</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Division VII</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Division I</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Division II</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>and</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Central</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Division V</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Division VI</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(East</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Sumatra)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Jakarta)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Banten)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Java)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(East Java)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Kalimantan)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Indonesia)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Local exchange capacity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,718,298</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,143,568</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,361,042</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,336,697</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,528,891</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>737,019</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,375,074</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,200,589</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total lines in service</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,921,532</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,856,340</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,095,093</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,182,022</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,806,761</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>676,766</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,209,484</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,747,998</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capacity
    utilization&nbsp;(%)<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>111.83</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>93.07</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>80.46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>88.43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>110.99</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>91.82</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>87.96</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>96.57</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Installed
    lines<SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,910,363</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,081,046</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,345,872</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,273,593</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,458,347</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>760,927</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,339,469</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,169,617</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Utilization
    rate&nbsp;(%)<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.58</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>94.49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>81.37</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>92.81</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>114.17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>88.94</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>90.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>96.80</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Employees<SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,740</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,548</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,967</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,020</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,757</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>956</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,213</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,201</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Population
    (millions)<SUP style="font-size: 85%; vertical-align: text-top">(4)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>55.14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30.72</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26.94</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38.89</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.54</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33.73</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>246.86</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    TELKOM line penetration&nbsp;(%)
    <SUP style="font-size: 85%; vertical-align: text-top">(5)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.48</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12.55</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.07</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.52</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.66</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.59</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.16</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 8pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Capacity utilization (lines in service/exchange capacity) and
    utilization rate (lines in service/installed lines) consist of
    fixed wireline and fixed wireless. The rate can exceed 100%
    since the exchange capacity in fixed wireless (MSC and BTS) is
    calculated by assuming traffic allocation per subscriber of
    60&nbsp;mE&nbsp;(mili Erlang).</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Total for 2005 includes 130,947 fixed wireless line units
    established under RSA scheme.</TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    Does not include employees for support divisions, such as
    TELKOM&#146;s long distance, fixed wireless, multimedia and
    construction divisions.</TD>
</TR>

<TR valign="top">
    <TD>(4)&nbsp;</TD>
    <TD align="left">
    <I>Source</I>: Indonesian Central Bureau of Statistics
    (estimated figures).</TD>
</TR>

<TR valign="top">
    <TD>(5)&nbsp;</TD>
    <TD align="left">
    TELKOM&#146;s penetration based on the estimated population
    figures.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;
<I>Fixed Wireless Network.</I> TELKOM&#146;s fixed wireless
network comprises a hierarchy of exchanges originating from MSC
(Mobile Switching Center) and connecting with each other through
trunk exchanges. Each MSC is connected to BSS (Base Station Sub
System) that comprises BSC (Base Station Controller) and BTS
(Base Transceiver Station), which connect equipment at a
customer&#146;s premises (handheld device and fixed wireless
terminal) to TELKOM&#146;s fixed wireless network.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM&#146;s total number of fixed wireless lines in service
has increased from approximately 1.4&nbsp;million as of
December&nbsp;31, 2004 to approximately 4.1&nbsp;million as of
December&nbsp;31, 2005.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">40
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth statistics relating to
TELKOM&#146;s fixed wireless network since 2002:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="49%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap><B>As of or for the Year Ended December 31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2002<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003<SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004<SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005<SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Exchange capacity
    (MSC)<SUP style="font-size: 85%; vertical-align: text-top">(7)</SUP></B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Non-KSO Divisions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>666,050</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,952,644</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,687,348</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    KSO
    Divisions<SUP style="font-size: 85%; vertical-align: text-top">(6)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>61,550</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>179,700</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>329,708</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>727,600</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,132,344</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,017,056</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Installed lines
    (BTS)<SUP style="font-size: 85%; vertical-align: text-top">(7)</SUP></B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Non-KSO Divisions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,621</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>659,497</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,291,212</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,332,893</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    KSO
    Divisions<SUP style="font-size: 85%; vertical-align: text-top">(6)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>116,150</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>179,717</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>340,568</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,621</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>775,647</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,470,929</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,673,461</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Lines in
    service<SUP style="font-size: 85%; vertical-align: text-top">(4)</SUP></B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Non-KSO Divisions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,527</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>237,749</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,317,673</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,750,821</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    KSO
    Divisions<SUP style="font-size: 85%; vertical-align: text-top">(6)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27,038</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>111,695</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>311,046</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,527</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>264,787</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,429,368</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,061,867</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Subscriber lines</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Non-KSO Divisions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,510</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>237,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,313,978</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,739,095</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    KSO
    Divisions<SUP style="font-size: 85%; vertical-align: text-top">(6)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27,038</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>111,695</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>311,046</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,510</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>264,238</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,425,673</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,050,141</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Public telephones</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Non-KSO Divisions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>549</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,695</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,726</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    KSO
    Divisions<SUP style="font-size: 85%; vertical-align: text-top">(6)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>549</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,695</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,726</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Fixed wireless subscriber pulse production/ minutes
    production<SUP style="font-size: 85%; vertical-align: text-top">(5)(8)
    </SUP>(millions)</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Non-KSO Divisions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>214</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>989</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,254</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    KSO
    Divisions<SUP style="font-size: 85%; vertical-align: text-top">(6)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>125</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>299</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>218</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,114</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,553</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    For 2002, Non-KSO Divisions refer to Divisions&nbsp;I, II, V and
    VI, while KSO Divisions refer to Divisions&nbsp;III, IV and VII.</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    For 2003, Non-KSO Divisions refer to Divisions&nbsp;I, II, III,
    V and VI, while KSO Divisions refer to Divisions&nbsp;IV and VII.</TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    For 2004 and 2005, Non-KSO Divisions refer to Divisions&nbsp;I,
    II, III, IV, V and VI, while KSO Divisions refer to
    Division&nbsp;VII.</TD>
</TR>

<TR valign="top">
    <TD>(4)&nbsp;</TD>
    <TD align="left">
    Lines in service are comprised of subscriber lines and public
    telephone lines and include the lines in service operated by
    TELKOM pursuant to the revenue-sharing arrangements. Such lines
    in service under revenue-sharing arrangements amounted to 8,208,
    63,005 and 130,947 as of December&nbsp;31, 2003, 2004 and 2005,
    respectively.</TD>
</TR>

<TR valign="top">
    <TD>(5)&nbsp;</TD>
    <TD align="left">
    Fixed wireless usage was measured in subscriber pulse before
    2004, and in minutes beginning 2004 due to the installation of
    new equipment. Therefore, fixed wireless usage beginning 2004
    and prior to 2004 are not comparable.</TD>
</TR>

<TR valign="top">
    <TD>(6)&nbsp;</TD>
    <TD align="left">
    The number of divisions classified as KSO Divisions varies year
    to year due to KSO acquisitions in certain years. See footnotes
    (1)&nbsp;to (3)&nbsp;above.</TD>
</TR>

<TR valign="top">
    <TD>(7)&nbsp;</TD>
    <TD align="left">
    The capacity of BTS and MSC are calculated by assuming traffic
    allocation per subscriber to be 60 mE (mili Erlang). However,
    the average traffic used per subscriber in 2005 was only 18 to
    30&nbsp;mE. Therefore, the capacity of BTS and MSC can
    accommodate more than 6&nbsp;million subscribers, respectively.</TD>
</TR>

<TR valign="top">
    <TD>(8)&nbsp;</TD>
    <TD align="left">
    Consists of minutes usage generated from local and domestic
    long-distance calls, excluding calls made from pay phones and
    mobile cellular phones.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM began offering a limited mobility CDMA-based fixed
wireless phone service under the brand name
&#147;TELKOMFlexi&#148; in December 2002. For more information
on TELKOMFlexi, see Item&nbsp;4. &#147;Information on the
Company&nbsp;&#151; B. Business Overview&nbsp;&#151;
General&nbsp;&#151; Fixed Wireless Services&#148;. As of
December&nbsp;31, 2005, TELKOM had 4,061,867 TELKOMFlexi lines
in service (consisting of 3,930,920 lines in service in non-RSA
areas and 130,947 lines in service in RSA areas).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Backbone.</I> TELKOM&#146;s telecommunications network
consists of transmission and switching facilities connecting
several network access nodes. The transmission links between
nodes and switching facilities include microwave, submarine
cable, satellite, optical fiber and other transmission
technology.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">41

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
The following table sets forth certain information on the
transmission capacity of TELKOM&#146;s backbone transmission
facilities as of December&nbsp;31, 2005.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="60%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="21%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Capacity</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Percentage</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(number of Transmission</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>of total</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>medium circuits)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>capacity</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Optical fiber cable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,827</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>71.17</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Microwave</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,682</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18.95</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Submarine cable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,562</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.04</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Satellite</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>357</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.84</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,428</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.00</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For more information on TELKOM&#146;s satellites, see
&#147;Other Network Infrastructure&#148; below.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mobile Cellular
Network</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Telkomsel.</I> Since its incorporation in 1995, Telkomsel has
been providing GSM cellular services throughout Indonesia
through its own network. Telkomsel has the largest network
coverage of any of the cellular operators in Indonesia,
providing coverage to over 90% of Indonesia&#146;s population,
including all counties in Indonesia and all sub-counties in Java
and Bali. Telkomsel currently operates a nationwide GSM/DCS
cellular network using a total of 30&nbsp;MHz of radio frequency
bandwidth. This consists of 7.5&nbsp;MHz in the 900&nbsp;MHz
band and 22.5&nbsp;MHz in the 1800&nbsp;MHz band. Both networks
operate as a single integrated dual band network. Telkomsel has
rolled out GPRS services nationwide since October 2002. In
February 2004, Telkomsel introduced an enhanced data
transmission technology known as &#147;EDGE,&#148; or Enhanced
Data rates for GSM Evolution, which offers enhanced data
transmission speeds for handsets equipped to handle EDGE. As of
December&nbsp;31, 2005, EDGE was available in Jakarta, Surabaya,
Batam, Semarang and Bali.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Telkomsel network is an integrated network of (i)&nbsp;base
transceiver stations containing transmitters, receivers and
other equipment that communicate by radio signals with cellular
telephone handsets within the range of the base transceiver
station, (ii)&nbsp;digital switch centers that route calls to
the proper destinations and (iii)&nbsp;transmission facilities
that link the digital switch centers to other cell sites. The
various components of the network are connected primarily by
microwave transmission, trunk lines owned by Telkomsel and other
fixed lines. In addition, through agreements with TELKOM,
Telkomsel leases certain of TELKOM&#146;s facilities, including
leased lines, integrated management system and information
system facilities, land, sites and towers. As of
December&nbsp;31, 2005, Telkomsel&#146;s digital network had
9,895 BTSs, 71 cellular switching centers, 259 base station
controllers and 79,912 transmitting and receiving exchanges,
with an overall network capacity capable of supporting
26.2&nbsp;million subscribers.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For each of the years ended December&nbsp;31, 2003, 2004 and
2005 Telkomsel made capital expenditures for the development and
expansion of its cellular network of approximately
Rp.5,348.8&nbsp;billion, Rp.4,982.7&nbsp;billion and
Rp.10,085.7&nbsp;billion (US$1,026.0&nbsp;million), respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Prior to 2002, TELKOM (through its business division, TELKOM
Mobile) and Telkomsel, had been independently working on the
construction of separate DCS 1800&nbsp;networks. TELKOM had been
granted 15 MHz of radio frequency bandwidth in the 1800&nbsp;MHz
band. In January 2002, Telkomsel entered into a
<FONT style="white-space: nowrap">co-operation</FONT> agreement
with TELKOM (the &#147;Telkomsel Co-operation Agreement&#148;),
the purpose of which was to set the framework for the transfer
of TELKOM&#146;s mobile telecommunications business and its
DCS&nbsp;1800 license to Telkomsel and for Telkomsel to assume
certain obligations and assets of TELKOM connected with the DCS
1800 network, including the assumption of TELKOM&#146;s rights
and obligations under a supply contract with Siemens. On
April&nbsp;3, 2002, pursuant to the Telkomsel
<FONT style="white-space: nowrap">Co-operation</FONT> Agreement,
Telkomsel purchased TELKOM&#146;s assets relating to TELKOM
Mobile and TELKOM transferred its TELKOM Mobile employees to
Telkomsel. Telkomsel also assumed all of TELKOM&#146;s rights
and obligations under various contracts connected with its
TELKOM Mobile business.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">42

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to the terms of the Telkomsel Co-operation Agreement,
TELKOM undertook to have its DCS&nbsp;1800 license cancelled and
re-issued to Telkomsel so that Telkomsel would have 15 MHz of
radio frequency in addition to its own 7.5 MHz of radio
frequency in the 1800 MHz band. The MoC re-issued the license to
Telkomsel on July&nbsp;12, 2002.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Data and Internet
Network</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM began operating data network services in 1997 and has
since continued to develop and expand its network progressively.
As of December&nbsp;31, 2005, TELKOM&#146;s
<FONT style="white-space: nowrap">IP-based</FONT> network
covered 127&nbsp;cities nationwide with routers in 174 nodes
nationwide. TELKOM will continue to expand its
<FONT style="white-space: nowrap">IP-based</FONT> network
shifting its primary revenue source from narrowband services to
broadband services. The
<FONT style="white-space: nowrap">IP-based</FONT> network serves
as the backbone network for high quality VPNs, VoIP and for
Internet service providers. TELKOM has remote access servers in
98&nbsp;locations with 145 nodes in Indonesia used for its
&#147;TELKOMNet Instan&#148;
<FONT style="white-space: nowrap">dial-up</FONT> Internet
services. For corporate customers requiring high performance and
secured virtual private networks, TELKOM provides a premium
service known as VPN Frame Relay.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Since 2004, TELKOM has provided fixed-line based broadband
access services under the brand name &#147;Speedy&#148;. As of
December&nbsp;31, 2005, there were over 30,000 subscribers in
the areas where such services were available, such as Jakarta,
Surabaya and Makasar. TELKOM expects the subscriber base of
Speedy to grow significantly over the next 12&nbsp;months.
&#147;Speedy&#148; is currently available in Division&nbsp;II
(Jakarta), Division&nbsp;V (Surabaya) and Division&nbsp;VII and
is expected to cover all of Divisions&nbsp;I to VII by the end
of 2006. Subscribers of Speedy typically are residential dial-up
users with a monthly usage of more than Rp.250,000, small
office/home office (&#147;SOHO&#148;) companies, travel agents,
Internet cafe and schools.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;International Network</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM received its commercial license from the Government to
provide IDD services on May&nbsp;13, 2004 and began offering IDD
fixed line services under the brand name &#147;TIC 007&#148; on
June&nbsp;7, 2004. According to an internal study, TELKOM&#146;s
current market share in terms of call volume in this market is
52%. To route outgoing IDD and incoming international calls,
TELKOM has three international gateways, in Batam, Jakarta and
Surabaya. At present, TELKOM has no intention to develop any new
gateways. According to a study conducted by TELKOM in September
2005, three gateways are sufficient to accommodate TELKOM&#146;s
international call volume. Nonetheless, TELKOM plans to improve
the capacities of each gateway and the bandwidth of its
international links.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
To connect its domestic network to the global network, TELKOM
primarily relies on the following microwave, international cable
and satellite links: (i)&nbsp;microwave link between Batam and
Johor (Malaysia); (ii)&nbsp;TIS (Thailand-Indonesia-Singapore)
cable system, which is an international submarine fiber optic
cable system deployed by TELKOM, SingTel and CAT Telecom Public
Company Limited and completed in November 2003, which connects
Indonesia (Batam), Singapore (Changi) and Thailand (Songkhla)
and was extended to Hong Kong in July 2004; (iii)&nbsp;Intelsat
satellites. TELKOM completed developing the ground segment to
link its network to the Intelsat satellites in December 2004;
and (iv)&nbsp;Dumai Melaka cable system, which is an
international submarine fiber optic cable system deployed by
TELKOM and Telekom Malaysia to connect Dumai (Indonesia) to
Melaka (Malaysia) and completed in December 2004. These multiple
international links provide flexibility for TELKOM to
interconnect with foreign operators.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In order to facilitate interconnection of international calls,
TELKOM has entered into international telecommunications service
agreements with telecommunications operators in several
countries. In addition, as TELKOM does not have agreements with
telecommunication operators in each of its IDD destinations,
TELKOM has entered into agreements with SingTel, Telekom
Malaysia, MCI and other entities for such operators to act as
hubs to route international calls to their destinations. TELKOM
plans to enter into additional international telecommunications
service agreements with telecommuni-
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">43

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
cations operators for direct interconnection, particularly
operators in the top 20 destinations for its outgoing IDD
traffic.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>Other Network Infrastructure</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, the Company also operated the
TELKOM-1 and <FONT style="white-space: nowrap">TELKOM-2</FONT>
satellites and 199 earth stations, including one satellite
control system. TELKOM-1 has 36 transponders including 12
extended <FONT style="white-space: nowrap">C-band</FONT>
transponders and 24&nbsp;standard
<FONT style="white-space: nowrap">C-band</FONT> transponders and
<FONT style="white-space: nowrap">TELKOM-2</FONT> has 24
standard <FONT style="white-space: nowrap">C-band</FONT>
transponders. TELKOM uses its satellites for the following
purposes:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Network backbone transmission;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Rural telecommunications services;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Back-up transmission capacity for the national
    telecommunications network;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Satellite broadcasting, VSAT and multimedia services;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Satellite transponder capacity leasing;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Satellite-based lease line; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Teleport (earth station satellite uplinking and downlinking
    services to and from other satellites).</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Network Development</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fixed line Network
Development</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;Fixed Wireline Network
Development</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2004, TELKOM substantially completed the expansion of its
Java fiber optic backbone. TELKOM entered into an agreement on
June&nbsp;10, 2005 with a consortium consisting of NEC
Corporation and PT&nbsp;Siemens Indonesia to further develop its
Java-Sumatra-Kalimantan network by the end of 2006.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM also had several network developments projects that were
ongoing as of December&nbsp;31, 2005, which included the
development of:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    fiber optic backbone infrastructure in Kalimantan (Borneo) from
    Banjarmasin to Samarinda;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    fiber optic backbone infrastructure in Sulawesi from Makasar to
    Palu;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    fiber optic regional junction in greater Jakarta, Surabaya (East
    Java) and Bandung&nbsp;&#151; Cirebon (West Java);</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    IP DSLAM project offering broadband access to all users in
    Indonesia;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    submarine cable system between Jakarta and Batam which
    facilitates the connection between domestic link and
    international link;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    transmission backbone infrastructure for Java island;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    IP-based network; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    installation of Softswitch Class&nbsp;4 in Jakarta, Bandung,
    Semarang and Surabaya to replace the outmoded TDM switch.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
To further develop its communications services, TELKOM also
plans to:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    continue to implement soft switch technologies to move towards a
    next generation network;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    continue to enhance its network through the progressive
    replacement of its old copper access network with optical access
    network; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    continue network integration and quality improvement.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">44

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;Fixed Wireless Network
Development</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM continues to develop and expand its network
infrastructure. TELKOM signed agreements with a consortium led
by Samsung Electronics Co.&nbsp;Ltd. in December 2002, with a
consortium led by Ericsson in December 2002, with
Motorola,&nbsp;Inc. in March 2003, and with PT INTI in August
2003, for the development of a total of 1,656,300 base station
subsystem lines and network and switching subsystem lines based
on CDMA fixed wireless technology. These projects were to be
completed by mid-2006 but were accelerated and completed in 2005
to satisfy increasing market demand. See Item&nbsp;10.
&#147;Additional Information&nbsp;&#151; C. Material
Contracts.&#148; TELKOM also had several on-going network
development projects as of December&nbsp;31, 2005, which
included the development of fixed wireless services in
forty-four locations, consisting of forty locations in Jakarta,
two locations in Sumatera and two locations in Sulawesi.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mobile Cellular Network
Development</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2004, Telkomsel extended its GSM coverage to cover all
counties in Indonesia. It also continued to improve the quality
of its coverage in Jakarta, Surabaya and other major cities
through the addition of microcells and expansion of its fiber
optic transmission backbone. In 2005, Telkomsel added, among
other equipment, 3,690&nbsp;BTSs and 30,580 transmitting and
receiving exchanges, thereby expanding its cellular network to
cover the entire areas of Java and Bali. Telkomsel plans to
continue to install additional BTSs to further expand its
coverage, further expand its fiber optic transmission backbone
for major cities in Java, install additional microcells and
install additional transmitting and receiving exchanges,
particularly in provincial areas, to further improve the quality
of its coverage, upgrade its switching equipment to increase
network capacity, and expand its intelligent network used in
connection with its prepaid products.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Data Network
Development</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2005, TELKOM continued to improve the quality of its data
network by adding capacity and coverage, increasing the capacity
and coverage area of its network management system, as well as
improving its billing system, security and access to its data
network. TELKOM developed IP core network in 15&nbsp;cities to
support the soft switch implementation, increased the number of
Backbone nodes in 114&nbsp;locations to 326&nbsp;locations and
raised the internet gateway capacity to 600 Mbps. It also
extended the coverage for TelkomNet Instan and VPN Dial services
in 53&nbsp;locations in Sumatera as well as Eastern Indonesia
and developed Host to Host in 28 banks, enabling customers to
pay their phone bills using ATM machines. TELKOM also expanded
the coverage of its high performance IP backbone and related IP
infrastructure to increase its IP traffic capacity. TELKOM
appointed a consortium consisting of Juniper Networks (Hong
Kong),&nbsp;Ltd, PT Siemens Indonesia and PT Datacom Diangraha
to develop its IP core network for Rp.29.8&nbsp;billion, through
a letter agreement in December 2004 and formalized by a contract
dated April&nbsp;1, 2005. The project was awarded after holding
an e-auction, and was completed in December 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2005, TELKOM also improved the quality and coverage of its
broadband Internet access network by continuing to expand its
ADSL broadband access network, which currently covers
Division&nbsp;II (Jakarta) and Division&nbsp;V (East Java).
TELKOM deployed a nationwide ADSL broadband Internet access
network, and entered into a contract for the development of this
network. Due to an insufficient customer base for ADSL broadband
access network services, however, the expansion was not
completed in the third quarter of 2005 as originally scheduled,
except for Division&nbsp;VII. In February 2004, TELKOM launched
a quality enhancement program for the broadband access network
called the &#147;JAWARA Broadband&#148; program to modernize the
broadband access networks of TELKOM and improve the quality of
such access networks. In 2005, the program resulted in an
increase in the number of broadband access networks supported by
xDSL broadband internet service by 26%.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT style="white-space: nowrap"><I>TELKOM-2</FONT>
Satellite</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM signed a US$73.1&nbsp;million contract with Orbital
Sciences Corporation to build the
<FONT style="white-space: nowrap">TELKOM-2</FONT> satellite
based on Orbital&#146;s
<FONT style="white-space: nowrap">STAR-2</FONT> platform, to
replace TELKOM&#146;s Palapa
<FONT style="white-space: nowrap">B-4</FONT> satellite, which
was taken out of service in August 2005. The
<FONT style="white-space: nowrap">TELKOM-2</FONT> satellite has
a capacity of 24 standard
<FONT style="white-space: nowrap">C-band</FONT> transponders,
with transponder specifications similar to those of the TELKOM-1
satellite. TELKOM-2 has a 15&nbsp;years
<FONT style="white-space: nowrap">in-orbit</FONT> life and is
expected to provide increased coverage of the Asian region and
the Indian subcontinent compared to Palapa
<FONT style="white-space: nowrap">B-4.</FONT> TELKOM believes
that the satellite will support TELKOM&#146;s network for voice,
video and data communications.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On November&nbsp;8, 2002, TELKOM signed a US$62.9&nbsp;million
agreement with Arianespace S.A., which covers the cost of
launching <FONT style="white-space: nowrap">TELKOM-2.</FONT>
TELKOM launched
<FONT style="white-space: nowrap">TELKOM-2</FONT> on
November&nbsp;17, 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capital Expenditures</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For more information on TELKOM&#146;s principal capital
expenditures, see Item&nbsp;5. &#147;Operating and Financial
Review and Prospects&nbsp;&#151; B.&nbsp;Liquidity and Capital
Resources&nbsp;&#151; Capital Expenditures&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Business Strategy</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM&#146;s objective is to become a leading full
telecommunication services and network company in Indonesia
providing a wide range of communications services. The
Company&#146;s vision is to become a leading &#147;InfoCom&#148;
player in the region, with a mission to provide one-stop
services with excellent quality and competitive prices to
customers and to manage its business using best practices,
utilizing competitive advantages and maximizing synergies.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM believes that Indonesia&#146;s telecommunications market
remains underdeveloped with low penetration rates for both fixed
lines and mobile cellular lines compared to other countries in
Southeast Asia. TELKOM believes that the strong demand for
telecommunications services has largely been responsible for the
growth of its fixed line and wireless business in recent years
and will continue to offer favorable growth opportunities in the
future. TELKOM expects that fixed line and wireless services
will continue to contribute the substantial majority of its
operating revenues in the near term. It has developed broad
strategies to retain its existing customers, to acquire new and
lost customers and to further penetrate the market through
customer relationship management (such as the setting up of its
enterprise service division and account management teams),
product leadership and diversification, competitive pricing and
one-gate distribution channels.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The key elements of TELKOM&#146;s strategy are:
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Strengthening the Fixed
Wireline and Fixed Wireless Business</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Indonesia has one of the lowest fixed line penetration rates in
Southeast Asia. As of December&nbsp;31, 2005, a majority of
total lines in service were in the major metropolitan areas of
Jakarta, Surabaya, Semarang, Bandung, Medan and Denpasar.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM aims to strengthen its fixed wireline and fixed wireless
business by:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    increasing its fixed line penetration rate more quickly and with
    lower capital expenditure per line through the rapid roll-out of
    fixed wireless technology, revenue sharing arrangements, new
    partnership agreements and pay as you grow schemes;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    increasing the use of TELKOMFlexi and value added services;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    strengthening its interconnection business by establishing a
    service center dedicated to telecommunications operators and
    other interconnection customers, opening more gateways to other
    telecommunications operators, offering more attractive pricing
    and providing enhanced billing services;</TD>
</TR>

</TABLE>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    strengthening PlasaTELKOM as a point of sale for TELKOM&#146;s
    services; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    developing and expanding its IDD fixed line business, which
    TELKOM began offering to customers on June&nbsp;7, 2004.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Strengthening its Backbone
Network</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In order to provide a better quality of service to its
customers, TELKOM intends to continue to increase the capacity,
coverage and quality of its network by, among other things,
using an optical network for high speed backbone transmission
infrastructure such as its Java optical backbone, HPBB Sumatera
<FONT style="white-space: nowrap">(2002-2003),</FONT> Trans
Borneo and Trans Sulawesi
<FONT style="white-space: nowrap">(2004-2005)</FONT> and by its
launch of the new TELKOM-2 satellite to replace the Palapa B-4
satellite. In addition, TELKOM aims to manage synergies among
utility providers in order to enhance backbone capacity and
access network penetration, expanding its optical network,
upgrading to a next generation network with the installation of
advanced switching systems, constructing international microwave
and submarine links and upgrading its systems to provide
integrated billing for new services.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Maintaining Telkomsel&#146;s
Leading Position in the Industry</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company regards the cellular business as having the greatest
opportunity for revenue growth. The Company provides its
cellular services through Telkomsel, a market leader in the
cellular business in Indonesia. Based on industry statistics,
Telkomsel had an estimated market share as of December&nbsp;31,
2005 of approximately 52% of the GSM cellular market,
maintaining its position as the largest nationwide licensed GSM
cellular operator in Indonesia and representing a slight
decrease from its estimated market share of 54% as of
December&nbsp;31, 2004. TELKOM intends to promote the further
development of Telkomsel&#146;s business by, among other things,
offering bundling of and
<FONT style="white-space: nowrap">one-stop</FONT> shopping for,
TELKOM&#146;s and Telkomsel&#146;s products and services, and
expanding Telkomsel&#146;s network capacity to enable Telkomsel
to meet the projected needs of its customer base through 2006.
In order to focus on Telkomsel and GSM technology, TELKOM has
sold its interests in cellular operators PT&nbsp;Telekomindo
Selular Raya (&#147;Telesera&#148;), PT Metro Selular Nusantara
(&#147;Metrosel&#148;) and PT&nbsp;Komunikasi Selular Indonesia
(&#147;Komselindo&#148;) which utilize analog and other first
generation non-GSM technologies.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM believes that the 35% equity interest of Singapore
Telecom Mobile Pte Ltd (&#147;SingTel Mobile&#148;) in Telkomsel
increases Telkomsel&#146;s ability to access SingTel
Mobile&#146;s technological and commercial expertise in the
cellular business and increases opportunities for cooperation
between Telkomsel and SingTel Mobile in the development of new
products, thereby strengthening and better positioning Telkomsel
to face competition from other mobile cellular operators.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The key elements of Telkomsel&#146;s strategy for its business
include:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    taking advantage of commercial, operational and network
    synergies with TELKOM and sharing best-practices and know-how
    with SingTel Mobile;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    continuous capacity and coverage expansion at pre-defined
    quality levels to handle subscriber growth;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    maintaining or improving market share by continuously aligning
    the characteristics and features of Telkomsel&#146;s service
    offerings to the evolving needs of its customer, enhancing its
    products and services portfolio (including its EDGE and GPRS
    services), expanding network capacity and improving service
    quality;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    ensuring that Telkomsel has the IT infrastructure in place to
    fulfill its vision and mission, with special focus on areas such
    as billing, service delivery and customer service; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    achieving service levels at par with world class mobile service
    providers through its call center footprint and aggressive
    pursuit of service oriented goals.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">47

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<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Developing its Fixed
Wireless Business</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM began offering a limited mobility CDMA-based fixed
wireless phone service under the brand name
&#147;TELKOMFlexi&#148; in December 2002. For more information
on TELKOMFlexi, see Item&nbsp;4. &#147;Information on the
Company&nbsp;&#151; B. Business Overview&nbsp;&#151; Fixed
Wireless Services&#148;. TELKOM plans to continue to expand its
CDMA-based fixed wireless networks in all of its regional
divisions by constructing CDMA-based fixed wireless networks.
Compared to fixed wireline networks, CDMA-based networks are
generally faster and easier to construct and provide customers
with greater flexibility and mobility. In April 2005, TELKOM
introduced the &#147;GB3&#148; program in order to attract more
TELKOMFlexi customers. Through increased brand image, market
penetration and call generation, the &#147;GB3&#148; program
helped increase the customer base of TELKOMFlexi by
2.1&nbsp;million customers from 1.4&nbsp;million customers in
December 2004 to 3.5&nbsp;million customers in June 2005. TELKOM
believes the deployment of a CDMA-based fixed wireless network
and its TELKOMFlexi business will provide TELKOM a competitive
advantage in the face of liberalization and increased
competition in the fixed line market.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Developing its Data and
Internet Business</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM intends to grow its data and Internet business by, among
other things:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    increased investment in TELKOM&#146;s broadband infrastructure
    (such as ADSL, Hybrid Fiber/ Coaxial and satellite);</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    focusing on retaining and acquiring customers with high demand
    for data services by offering competitive pricing for high-speed
    data and Internet services (including value-added services) and
    full VPN IPs, and by expanding TELKOM&#146;s backbone and
    network access technology;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    giving customers greater Internet access options, such as
    through wireless hotspot technology and the bundling of Internet
    access services with TELKOMFlexi and Telkomsel products;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    developing and offering new value-added services and products,
    such as e-payment services for banks and other financial
    institutions and wireless data content for GPRS and MMS users;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    expanding the international coverage of TELKOM&#146;s data and
    Internet services by entering into agreements with additional
    global carriers and wholesalers; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    expanding the coverage and quality of its Internet Protocol
    backbone to increase data and Internet traffic capacity.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reducing Cost of
Capital</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM recognizes that the increasingly competitive Indonesian
telecommunications market requires TELKOM to develop additional
network capacity, improve operational efficiency and diversify
its sources of financing. TELKOM&#146;s internally generated
cash flows and direct borrowing from banks and other lenders may
not be sufficient to fund aggressive plans to grow its business.
As a result, since the end of 2002 TELKOM has sought to
implement a &#147;pay as you grow&#148; scheme for its
additional network capacity in order to:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    share investment risks with its suppliers;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    reduce its asset base and outsource non-core businesses; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    mitigate financing, commercial, operational, technical and
    capacity risks.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;Pay as you grow&#148; involves arrangements in which
TELKOM and its equipment suppliers agree that a percentage of
the contract cost will be paid up front (for example, 25%) and
the balance will be paid once lines are put into service. TELKOM
and its suppliers also agree to work together to plan and design
networks, assess capacity requirements and determine timetables
for procurement. The &#147;pay as you grow&#148; scheme allows
TELKOM to pay the equipment vendors based on the attainment of a
certain
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
number of customers in the related area/facility or within one
year from completion date, whichever is earlier. Vendors
participating in this &#147;pay as you grow&#148; scheme have
assessed the risk of entering into such scheme and, up to the
date of this Annual Report, have only been willing to enter into
this scheme for projects that they believe have high customer
potential. Accordingly, vendors have always been paid by TELKOM
within a few months after the equipment has been delivered. Only
a relatively small number of equipment vendors are invited to
participate in &#147;pay as you grow&#148; programs and supply a
substantial portion of TELKOM&#146;s infrastructure and other
equipment needs.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Increasing TELKOM and Telkomsel Synergy</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM seeks to increase its synergy with Telkomsel, and to
promote the sharing of facilities and information, the combining
of resources and increased coordination. These resources include
network, marketing, infrastructure support (such as information
technology, logistics, human resources development and
procurement) as well as products and services (such as new
product development, bundling/packaging of services and
interconnection). Specific examples include:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="2%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    joint corporate account handling to be able to offer a complete
    suite of services to relevant corporate customers;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    utilizing the group&#146;s combined customer base to deliver
    each other&#146;s relevant products (such as the offering of
    TELKOM&#146;s 007 IDD service to Telkomsel&#146;s customers with
    specific benefits and a joint promotion campaign);</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    joint promotion and marketing activities on a case-by-case basis
    whenever this generates additional benefits to the group;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    consolidated procurement programs and processes to obtain
    competitive prices for common purchases and implement an
    e-auction process as a standard bid price mechanism;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    sharing of operational facilities (such as sites, towers,
    mechanical and electrical facilities); and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    information sharing and in certain cases joint deals with
    content providers for mobile data services.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Pay TV Services</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM provides pay-TV services through its subsidiary, PT
Indonusa Telemedia (&#147;Indonusa&#148;) under the brand name
TELKOM-VISION through HFC-based SMATV and the Internet. It
currently has approximately 29,000 subscribers.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Customer Service</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>TELKOM</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM provides customer services through:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="2%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    <I>Walk-in customer service points.</I> TELKOM&#146;s walk-in
    customer service points (&#147;Plasa Telkom&#148;) provide
    convenient and comprehensive access to TELKOM&#146;s customer
    services including product and service information requests and
    complaints, activation of services, customer billing, payments,
    account suspensions, service features and marketing promotions.
    As of December&nbsp;31, 2005, TELKOM had more than 800 customer
    service points in total, including 53&nbsp;customer service
    points in Jakarta and 48 in Surabaya, and including
    163&nbsp;customer service points operated by its KSO Unit. In
    2006, TELKOM plans to expand its services at customer service
    points to include electronic payment services via Electronic
    Data Capture (&#147;EDC&#148;) using on-site terminals.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    <I>Call centers and Internet.</I> TELKOM operates call centers
    in many cities in Indonesia, including in the KSO regions.
    Customers are provided a number 08001 TELKOM (toll free for
    corporate customers) to speak directly to customer service
    operators who are trained to handle customer</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">49

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="2%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    requests and complaints and to provide up-to-date information on
    matters such as customer bills, promotions and service features.
    Billing information may also be obtained through the Internet
    for customers in Divisions I to VI. Since December 2004, TELKOM
    has also introduced on a trial basis SMS at a service point for
    customers in Jakarta and East Java and charges such customers at
    the regular SMS rates. Customers are also provided access to
    directory services for which a charge is levied. TELKOM promotes
    the use of call centers, SMS and the Internet over walk-in
    customer service points for its retail customers.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    <I>Enterprise service and account management teams.</I> To focus
    on its corporate customers that contribute between
    Rp.50&nbsp;million to Rp.500&nbsp;million to TELKOM&#146;s
    monthly revenues, particularly corporations with national
    operations, TELKOM has set up an enterprise service division in
    Jakarta, which seeks to develop its business in this segment of
    the market. TELKOM provides these customers with account
    management teams, each comprising an account manager supported
    by personnel from the relevant operational departments, to
    provide a single point of contact for all of the customer&#146;s
    communications needs, including integrated communications
    solutions. TELKOM has also divided its enterprise service and
    account management teams into six segments, namely,
    (i)&nbsp;Financial and Banking, (ii)&nbsp;Government,
    Army&nbsp;&#38; Police, (iii)&nbsp;Manufacturing,
    (iv)&nbsp;Mining&nbsp;&#38; Construction,
    (v)&nbsp;Trade&nbsp;&#38; Industrial Park, and
    (vi)&nbsp;Trading&nbsp;&#38; Service. To cater to such
    customers, the enterprise service division works on integrating
    various product and service offerings to provide total
    telecommunications solutions, including voice telecommunications
    services, multimedia services and certain office automation and
    network monitoring and controlling services. TELKOM has also set
    up similar account management teams at the regional level to
    focus on corporations with regional operations within Indonesia.
    As of December&nbsp;31, 2005, TELKOM had 689 national and
    regional-level account managers that cover Divisions&nbsp;I to
    VI and KSO&nbsp;VII, a 9% increase from 634 account managers as
    of December&nbsp;31, 2004. It plans to further increase the
    number of such teams.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    <I>Service level guarantee program. </I>TELKOM has had a service
    level guarantee program for its fixed line customers in
    Divisions&nbsp;II and&nbsp;V since May 2001 and has been
    implementing a service level guarantee program on a national
    basis since June 2002. The service level guarantee program
    provides guarantees of certain minimum levels of service
    relating to, among others, new line installations, restoration
    of disconnected lines and billing complaints, and provides for
    non-cash compensation, such as free subscription for a certain
    period, to be awarded to customers where such minimum service
    levels are not met.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Telkomsel</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telkomsel provides customer services through:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="2%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    <I>GraPARI Customer Services Centers:</I> As of
    December&nbsp;31, 2005, Telkomsel had 64 GraPARI customer
    services centers (&#147;GraPARI centers&#148;). Telkomsel&#146;s
    GraPARI centers provide convenient and comprehensive access to
    Telkomsel&#146;s customer services. GraPARI centers handle
    product and service information requests and complaints and
    typically focus on activation of services, customer billing,
    payments, account suspensions, service features, network
    coverage, IDD, roaming information and marketing promotions. See
    &#147;&#151;&nbsp;Sales, Marketing and Distribution&#148;.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    <I>Caroline:</I> &#147;Caroline&#148;, or Customer Care On-Line,
    is a 24 hour toll-free telephone service. Telkomsel&#146;s
    customers may speak directly to customer service operators who
    are trained to handle customer requests and complaints and to
    provide up-to-date information on matters such as customer
    bills, payments, promotions and service features.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    <I>Anita:</I> &#147;Anita&#148;, or Aneka Informasi dan Tagihan,
    is an SMS service available only to Telkomsel&#146;s KartuHALO
    subscribers.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">50

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Subscribers may use dedicated Anita telephone lines to obtain
billing information as well as usage information through SMS.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Sales, Marketing and Distribution</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>TELKOM</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM distributes and sells its principal products and
services, including fixed wireless services but excluding mobile
cellular services, through six primary distribution channels:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="2%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    <I>Walk-in customer service points.</I> Customers have access to
    certain products and services in these walk-in customer service
    points. See &#147;&#151;&nbsp;Customer Service&#148; above.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    <I>Account management teams.</I> Account management teams
    promote TELKOM&#146;s products and services in an integrated
    manner to TELKOM&#146;s larger business customers. See
    &#147;&#151;&nbsp;Customer Service&#148; above.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    <I>Public telecommunications kiosks.</I> Small businesses in
    cooperation with TELKOM have established public
    telecommunications kiosks throughout Indonesia. Customers can
    access basic telecommunications services, including local,
    domestic long-distance and international telephony, send
    facsimiles, telexes and telegrams, access the Internet and
    purchase phone-cards and TELKOMFlexi starter packs and vouchers.
    TELKOM generally provides discounts to such kiosks of 30%
    compared with subscriber telephone rates. Kiosks operate on a
    non-exclusive basis and may also provide products and services
    of other operators.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    <I>Authorized dealers and retail outlets.</I> These are located
    throughout Indonesia and primarily sell phone-cards and
    TELKOMFlexi subscriptions, starter packs and vouchers.
    Independent dealers and retail outlets pay for all products they
    receive at a discount, operate on a non-exclusive basis and may
    also sell products and services of other operators.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    <I>Website.</I> Through its website, customers can obtain
    information on TELKOM&#146;s major products and services and
    gain access to certain of its multimedia products.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    <I>Public telephones.</I> Customers can make local, domestic
    long-distance and international telephone calls through public
    telephones.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM&#146;s marketing communications program includes the use
of print and television advertising, customer service and
distribution personnel, infrastructure and special promotional
campaigns to strengthen its brand name, increase its profile and
educate the general public about itself and its products and
services. TELKOM is continuing to develop its marketing
communications program to promote all of its core businesses as
it seeks to evolve into a full service telecommunications
provider.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Telkomsel</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telkomsel sells its cellular services through three primary
distribution channels:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="4%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(i)</TD>
    <TD align="left">
    its 64 GraPARI centers (as of December&nbsp;31, 2005),</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(ii)</TD>
    <TD align="left">
    a network of authorized dealers (operating over 12,000 retail
    outlets throughout Indonesia as of December&nbsp;31, 2005)
    selling primarily prepaid SIM cards and vouchers, and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(iii)</TD>
    <TD align="left">
    other outlets such as banks and photo shops.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Independent dealers and other outlets pay for all products they
receive, such as starter packs and prepaid vouchers, at a
discount. Independent dealers sell Telkomsel&#146;s cellular
services on a non-exclusive basis and may also sell products and
services of other cellular operators.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telkomsel markets its KartuHALO product and services to specific
target groups, focusing on corporate end-users, and
HALOkeluarga, product and services to professionals who tend to
generate higher usage and, therefore, higher revenues. Telkomsel
has established dedicated corporate account
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">51

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
teams to market its services to large corporate customers and to
manage on-going client relationships. Its prepaid products and
services are targeted at a much broader customer base.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telkomsel advertises through a variety of media for strategic
branding and promotions. In addition, Telkomsel employs
marketing methods such as bill inserts and point-of-sale
displays in order to target programs, events and promotions at
particular segments of the market. Telkomsel&#146;s marketing
strategy also includes conducting on-going market analysis to
better understand its targeted subscribers and to gather
feedback on customer preferences. It conducts such analysis with
a view to improving and introducing new services to cater to the
requirements of existing customers and to attract new
subscribers.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Billing, Payment and Collection</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM&#146;s customers are billed on a monthly basis. Customers
are billed according to the regional division in which they are
located, although they may request bills from several regions to
be combined. The billing process is computerized within each
region. Payment can be made within the respective regions,
through designated automated teller machines, at post offices
and banks that act as collecting agents and in certain areas by
direct deposit via telephone transfer or by automatic debit
through banks and Internet banking. However, for payments that
are overdue for three months or more, customers are required to
make such payments only at TELKOM&#146;s customer service
points. TELKOM issues bills on the fifth day of each month and
payment of the bill is due by the 20th day of that same month.
If payment is not received by the due date of the bill,
customers are provided with reminders by way of automated
telephone calls and reminder letters, nominal late fees are
levied and increasing levels of call barring are implemented.
Services will be terminated if no payment is received after two
months from the due date, although TELKOM does not cut off
service to its Government subscribers. After an account is
terminated, the customer may only re-subscribe for services
after making the overdue payment, including payment of late
fees, and by completing a new application.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following is a summary of TELKOM&#146;s overdue payment
policy for &#147;Lines in Service&#148; (&#147;Sambungan Pokok
Telepon&#148;) and TELKOMFlexi (excluding Government
subscribers) effective since April&nbsp;1, 2006:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="34%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="34%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="center" nowrap><B>Stage</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Overdue Payment</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Charge</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Penalty</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    I</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    1-10 days</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    5% of the total outstanding receivables, subject to the minimum
    charge of Rp.5,000</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Out-going isolation (i.e., restricted to receiving incoming
    calls only)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    II</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    11-40 days</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    10% of overdue bill subject to minimum charge of Rp.10,000</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Total isolation (i.e., no outgoing or incoming calls)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    III</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    41-60 days</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    15% of overdue bill subject to minimum charge of Rp.15,000</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Service disconnected</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    IV</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    More than 60 days</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    15% of overdue bill subject to minimum charge of Rp.15,000</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Service disconnected and associated number subject to termination</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">52
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following is a summary of TELKOM&#146;s overdue payment
policy for Speedy (excluding Government subscribers), effective
since April&nbsp;1, 2006:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="34%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="34%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="center" nowrap><B>Stage</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Overdue Payment</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Charge</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Penalty</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    I</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    1-10 days</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    5% of the total outstanding receivables</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Total isolation</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    II</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    11-40 days</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    10% of overdue bill</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Total isolation</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    III</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    41-60 days</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    15% of overdue bill</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Service disconnected</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    IV</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    More than 60 days</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    15% of overdue bill</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Service disconnected and associated number subject to termination</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following is a summary of TELKOM&#146;s overdue payment
policy for WARTEL and Warung TELKOM, kiosk telephone operators
which use TELKOM&#146;s networks, effective since April&nbsp;1,
2006:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="34%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="34%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="center" nowrap><B>Stage</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Overdue Payment</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Charge</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Penalty</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    I</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    1-20 days</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    5% of the total outstanding receivables</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Total isolation</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    II</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    21-50 days</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    10% of overdue bill</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Service disconnected</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    III</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    More than 50 days</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    15% of overdue bill</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Service disconnected and associated number subject to termination</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM currently provides billing services for Indosat in
connection with their IDD services, for which it charges a flat
fee for each bill.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Management of Customer Receivables</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM does not collect deposits from subscribers. TELKOM has
historically been the only provider of fixed line
telecommunication services in Indonesia and has approximately
12.4&nbsp;million subscriber lines comprises 8.3&nbsp;million
subscriber lines on its fixed wireline network and
4.1&nbsp;million subscriber lines on its fixed wireless network.
A delinquent subscriber, except for Government, police and
military customers, is subject to late fees, increasing levels
of call barring and, eventually, disconnection of the service
after approximately 3&nbsp;months of delinquency. Since the
monthly bill for the average customer is insignificant and the
customer is required to pay a reinstallation fee, the overdue
payment and all late fees when the customer intends to
resubscribe, there is little incentive for the customer not to
pay his outstanding bill. In addition, TELKOM screens potential
customers for fixed line by reviewing identity card and
electricity billing statements and by visiting the residence of
such potential customers. Accordingly, TELKOM believes that the
collectibility of its receivables is reasonably assured.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the case of private retail customers, TELKOM generally
provides for 100% of the outstanding debt where the amount has
been outstanding for more than three months. In the case of
Government, police and military customers, TELKOM generally
provides for 25% of the outstanding debt where the amount has
been outstanding between 7 and 12&nbsp;months, 50% where the
amount has been outstanding between 13 and 24&nbsp;months and
100% where the amount has been outstanding for more than
24&nbsp;months. TELKOM does not charge any late fees or interest
on its overdue accounts for Government subscribers.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Telkomsel</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telkomsel bills its KartuHALO post-paid subscribers on a monthly
basis, in arrears based on: (i)&nbsp;the minutes of use for
cellular services; (ii)&nbsp;any additional, chargeable
value-added services utilized during the period; and
(iii)&nbsp;subscription charges for basic and other services
included in their subscription plan. Postpaid subscribers can
choose among three options: (a)&nbsp;special tariff for calls to
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">53
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
five favorite numbers within Telkomsel&#146;s network;
(b)&nbsp;150 free SMSs per month; or (c)&nbsp;waiver of the
monthly subscription charge.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telkomsel offers its KartuHALO post-paid subscribers a variety
of payment options, including payment by cash, cheque, credit
card, direct deposit via telephone transfer or automatic debit
through banks and participating credit card companies. Payments
may be made at any of Telkomsel&#146;s GraPARI centers,
designated automatic-teller machines or through over-the-counter
facilities (mostly at post offices and banks with whom Telkomsel
has an arrangement).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telkomsel issues bills to retail customers on the fifth day of
each month and payment of the bill is due by the 20th day of
that same month (corporate customers can choose the day of the
month that they would like their bill due and Telkomsel issues
the bill approximately 15&nbsp;days prior to such date). If
payment is not received by the due date of the bill, subscribers
are provided with reminders by way of automated telephone calls
or SMS, and the customer will be barred from making any outgoing
calls or receiving any incoming roaming calls. If there is no
payment of the overdue sum within one month from the due date of
the relevant bill, the customer will be further barred from
receiving all incoming calls. If no payment is received within
two months of the due date of payment, the customer&#146;s
account will then be terminated, although Telkomsel will
continue to seek payment and may seek the assistance of a debt
collection agency. After an account is terminated, the customer
may only re-subscribe for services after making the overdue
payment and by completing a new application. Telkomsel does not
charge any late fees or interest on its overdue accounts.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Insurance</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, TELKOM&#146;s property, plant and
equipment, including optical fibers but excluding multi-pair
cables, were insured against the risk of fire, theft and other
specified risks for an aggregate coverage value of Rp.20.3
trillion (US$2.1&nbsp;billion). TELKOM maintained additional
insurance coverage as of such date of US$191.5&nbsp;million in
the event of a total loss of the TELKOM-1 and TELKOM-2
satellites. In connection with the TELKOM-1 satellite, TELKOM
has procured in-orbit insurance coverage in the amount of
US$54.5&nbsp;million. This coverage has been subject to daily
reductions on a straight-line basis since November&nbsp;7, 2004.
As of January&nbsp;1, 2006, the coverage amount is
US$48.2&nbsp;million and it is expected to reduce to zero by
2014. In connection with the TELKOM-2 satellite, which was
successfully launched on November&nbsp;17, 2005, TELKOM has
procured insurance to cover both the satellite and launch
services. With regard to the TELKOM-2 satellite, TELKOM has
procured (i)&nbsp;a satellite launch and in-orbit insurance
providing coverage of US$72.3&nbsp;million to cover the event of
a total loss of the satellite in the period between lift-off and
up to one year in orbit, and (ii)&nbsp;post separation and
in-orbit insurance coverage of US$71.0&nbsp;million to cover the
event of a total loss in the period between the separation of
the satellite from the launcher up to one year in orbit. As of
December&nbsp;31, 2005, TELKOM also maintained general insurance
coverage for motor vehicles of Rp.105.9&nbsp;billion
(US$10.8&nbsp;million). TELKOM does not maintain business
interruption insurance.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM&#146;s subsidiaries separately insure their property in
such amounts and in accordance with the policies determined and
implemented by the subsidiaries themselves. Telkomsel has an
electronic equipment and industrial all-risk insurance policy
underwritten by a consortium led by PT Asuransi Ramayana Tbk in
the amount of US$2,789.2&nbsp;million. The policy provides cover
for Telkomsel&#146;s network equipment, facilities,
infrastructure and buildings although it excludes losses
suffered as a result of war, civil war, rebellion, revolution,
terrorism, insurrection or military or usurped power, amongst
other exclusions. Telkomsel also has general insurance for motor
vehicle liabilities and comprehensive general liabilities.
Telkomsel does not maintain business interruption insurance.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Indonesian Telecommunications Industry</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Overview</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Since 1961, telecommunications services in Indonesia have been
provided by a succession of state-owned companies. As in other
developing economies, the expansion and modernization of
telecommu-
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">54

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
nications infrastructure play an important role in
Indonesia&#146;s general economic development. Moreover, the
nation&#146;s large population and rapid economic growth have
led to significant unmet demand for telecommunications services.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Government has extensive regulatory authority and
supervisory control over the telecommunications sector,
primarily through the MoCI. The Government has historically
maintained a monopoly over telecommunications services within
Indonesia. Recent reforms have attempted to create a regulatory
framework to promote competition and accelerate the development
of telecommunications facilities and infrastructure. The
regulatory reforms embodied in new regulations, which came into
effect on September&nbsp;8, 2000, are intended to increase
competition by removing monopolistic controls, increase the
transparency and predictability of the regulatory framework,
create opportunities for strategic alliances with foreign
partners and facilitate the entrance of new participants to the
industry. The deregulation of the telecommunications sector is
closely linked to the national economic recovery program
supported by the IMF.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Fixed line and cellular penetration are low in Indonesia by
international standards. As of December&nbsp;31, 2005, Indonesia
had an estimated fixed line penetration (excluding
Indosat&#146;s fixed wireless subscribers) of 5% and an
estimated cellular penetration of 21%, according to an internal
study.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM believes that there are a number of trends in the
telecommunications industry in Indonesia which include:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="2%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    Continued growth. TELKOM believes the telecommunications
    industry will continue to grow, as continued development of
    Indonesia&#146;s economy is expected to increase demand for
    telecommunications services.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    Migration to wireless networks. TELKOM anticipates that wireless
    services will become increasingly popular as a result of wider
    coverage areas and improving wireless network quality, declining
    handset costs and the proliferation of prepaid services.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    Increasing competition. TELKOM anticipates an increasingly
    competitive Indonesian telecommunications market as a result of
    the Government&#146;s regulatory reforms.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Regulations</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Overview</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Government exercises both regulatory authority and
supervisory control over the telecommunications industry in
Indonesia. The legal framework for the telecommunications
industry is based on specific laws, government regulations and
ministerial decrees enacted and issued from time to time. The
Government currently regulates the telecommunications sector
through the MoCI. The MoCI is responsible for the overall
supervision and regulation of the industry. Within the MoCI,
various directorates and bureaus carry out specific regulatory
duties. The MoCI has authority to issue implementing decrees,
which are typically broad in scope, thereby giving the MoCI
considerable latitude. Pursuant to such decrees, the MoCI
defines the scope of exclusivity, formulates and approves
tariffs, determines USOs and controls many factors affecting
TELKOM&#146;s competitive position, operations and financial
condition. The MoCI, as regulator, has the authority to grant
new licenses for the establishment of new joint ventures and
other arrangements, particularly in the telecommunications
sector.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Prior to March 1998, the Ministry of Tourism, Post and
Telecommunications (the &#147;MTPT&#148;) was responsible for
the regulation of telecommunications in Indonesia, but, with
reorganization of the Government following the 1999 General
Elections, the MoC was given the regulatory responsibilities. In
2005, pursuant to a presidential decree, such regulatory
responsibilities were transferred to the MoCI. Through the DGPT,
a directorate under the MoCI, the Government regulates the radio
frequency spectrum allocation for all operators, including
TELKOM, which are required to obtain a license from the MoCI for
each of their services utilizing radio frequency spectrum. All
telecommunications
</DIV>

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operators are also required to pay for radio frequency spectrum
usage. The Government also requires all telecommunications
operators to pay a concession license fee of 1% of its collected
operating revenues.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The overall program of telecommunications sector deregulation is
closely linked to the national economic recovery program
supported by the IMF. The national plan is documented in the
Memorandum of Economic and Financial Policies (the
&#147;MEFP&#148;), as further clarified in the Letters of Intent
to the IMF in January and May 2000. The main focus of the MEFP
is to stabilize the economy and regain trust through a
comprehensive plan based on:
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Deregulation;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Promoting competition;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Liberalization;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Restructuring;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Improving market access; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Introducing market-oriented regulations.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Government&#146;s telecommunications reform policy is
formulated in its &#147;Blueprint of the Indonesian
Government&#146;s Policy on Telecommunications&#148;, as
contained in the MoC&#146;s Decree No.&nbsp;KM&nbsp;72 of 1999
dated July&nbsp;20, 1999 (the &#147;Blueprint&#148;). The
policies stated in the Blueprint are intended to:
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Increase the sector&#146;s performance in the era of
    globalization;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Liberalize the sector with a competitive structure by removing
    monopolistic controls;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Increase transparency and predictability of the regulatory
    framework;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Create opportunities for national telecommunications operators
    to form strategic alliances with foreign partners;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Create business opportunities for small and medium enterprises;
    and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Facilitate new job opportunities.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The recent regulatory reforms of the Indonesian
telecommunications sector have their foundation in
Telecommunications Law No.&nbsp;36 of 1999, which came into
effect on September&nbsp;8, 2000 (the &#147;Telecommunications
Law&#148;).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On September&nbsp;15, 2003 the Government issued the Economic
Policy Package pursuant to Presidential
Instruction&nbsp;No.&nbsp;15 dated September&nbsp;15, 2003. The
Government intends to improve efficiency, capacity and equity in
telecommunications by putting in place the infrastructure for an
additional 3&nbsp;million fixed lines and 43,000 fixed lines in
remote areas. Further, on March&nbsp;30, 2004, the MoC issued
Announcement No.PM.2/2004 regarding the Implementation of the
Telecommunications Sector Restructuring, which stated, among
other matters, that the Government will require operators to
install a minimum of 1.4&nbsp;million lines in 2004 and
10.7&nbsp;million lines by 2008.
</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Telecommunications Law</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Telecommunications Law provides key guidelines for industry
reforms, including industry liberalization, facilitation of new
entrants and enhanced transparency and competition. Under the
Indonesian regulatory framework, the Telecommunication Law only
outlines the substantive principles of the subject matter.
Detailed provisions implementing the Telecommunications Law will
be provided in the implementation regulations consisting of
Government regulations, ministerial decrees and decrees of the
DGPT.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The new Telecommunications Law eliminates the concept of
&#147;organizing entities&#148;, thus ending TELKOM&#146;s and
Indosat&#146;s status as organizing entities with responsibility
for coordinating domestic and international telecommunications
services, respectively, for the industry. To enhance
competition, the Telecommunications Law specifically prohibits
monopolistic practices and unfair competition among
telecommunications operators.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The role of the Government is to become that of an impartial
policy maker and supervisor of the telecommunications sector. As
stipulated in the Telecommunications Law and in order to ensure
transparency in the regulatory process, an independent
regulatory body was established on July&nbsp;11, 2003 to
regulate, monitor and control the telecommunication industry.
The Indonesian Telecommunications Regulatory Body
(&#147;ITRB&#148;) is comprised of officials from the DGPT and
the Committee of Telecommunication Regulations and is headed by
the Director General of Post and Telecommunication Services.
Members of the Committee of Telecommunication Regulations were
appointed on December&nbsp;19, 2003.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
MoC Decree No.&nbsp;67/2003 stipulates the relationship between
the MoC, from which telecommunications regulatory responsibility
was transferred to the MoCI in February 2005, and ITRB. As part
of its regulatory function, ITRB is authorized to (i)&nbsp;carry
out the selection or evaluation for licensing of
telecommunications networks and services in accordance with the
MoCI&#146;s policy, and (ii)&nbsp;propose to the MoCI the
operation performance standards for telecommunications networks
and services, service quality standards, interconnection charges
and equipment standardization. As part of its monitoring
function, the ITRB is authorized to monitor and is required to
report to the MoCI on (i)&nbsp;the implementation of the
operation performance standards for telecommunications networks
and services, (ii)&nbsp;the competition among network and
service operators, and (iii)&nbsp;compliance with the
utilization of telecommunication equipment in accordance to the
applicable standards. As part of its controlling function, the
ITRB is also authorized and required to report to the MoCI
regarding (i)&nbsp;the facilitation of any dispute resolution
among network and service operators, and (ii)&nbsp;the control
of the use of telecommunications equipment and implementation of
service quality standards. Decisions of the ITRB are in the form
of a DGPT decree.
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>New Service Categories</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Telecommunications Law classifies telecommunications
providers into three categories: (i)&nbsp;telecommunications
network providers; (ii)&nbsp;telecommunications services
providers; and (iii)&nbsp;special telecommunications providers.
Under these categories, telecommunications network operations
and/or provision of telecommunications services may be carried
out by any legal entity established for that purpose.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the Telecommunications Law, licenses are required for each
category of telecommunications service. A telecommunications
network provider is licensed to own and/or operate a
telecommunications network. A telecommunications service
provider is licensed to provide services by leasing network
capacity from other network providers. Special
telecommunications licenses are required for providers of
private telecommunications services for purposes relating to
broadcasting and national security interests. MoC Decree
No.&nbsp;KM 20/2001 (as amended by Decree No.&nbsp;KM 29/2004)
and MoC Decree No.&nbsp;KM 21/2001 (as amended by Decree
No.&nbsp;KM 30/2004) implement the provisions of the
Telecommunications Law regarding these new categories of
telecommunications network and services operations.
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Modern License</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to the Telecommunications Law the existing licenses for
telecommunication services were replaced with the so-called
&#147;Modern Licenses&#148;, which TELKOM received in May 2004.
In addition to granting the license holder the right to provide
telecommunication services, the Modern License also imposes
certain mandatory obligations on the license holder. These
obligations include, among others, construction obligations,
service obligations, network performance obligations and
contributing 0.75%
</DIV>

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of their gross revenues for Universal Service Obligations
(&#147;USO&#148;). The license holder is required to fulfill the
mandatory obligations set forth in its Modern License and the
failure to comply with such obligations may result in the
revocation of its Modern License. TELKOM&#146;s separate
licenses to provide fixed line services, DLD services and IDD
services were replaced and combined into a single license issued
on May&nbsp;13, 2004. TELKOM also has a multimedia license that
includes services such as Internet service provider, data
communication and VoIP.
</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Exclusivity</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the previous regulatory regime that precedes the
Telecommunications Law, TELKOM was granted a monopoly to provide
domestic local fixed line telecommunications services until
December&nbsp;31, 2010 and domestic long-distance
telecommunications services until December&nbsp;31, 2005.
Indosat and Satelindo (prior to the merger of Satelindo into
Indosat in November 2003) were granted a duopoly for exclusive
provision of basic international telecommunications services
until 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Telecommunications Law did not expressly terminate the
existing exclusivity rights of TELKOM and Indosat. In an effort
to support the undertakings of TELKOM and Indosat during their
respective initial public offerings and to maintain the
Government&#146;s credibility among foreign investors, the
Government announced that termination of the exclusivity rights
would be subject to agreement between the relevant incumbents
and the Government, whereby incumbents would be eligible for
compensation in exchange for early termination of these
exclusivity rights.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On August&nbsp;1, 2001, the Government through the DGPT,
announced the early termination of TELKOM&#146;s and
Indosat&#146;s exclusivity rights for local and domestic-long
distance telecommunications services (in the case of TELKOM) and
IDD (in the case of Indosat). The announcement stated that it is
the Government&#146;s intention that Indosat would receive a
license to provide local telephone services and a license to
provide domestic long-distance and that TELKOM would receive a
license to provide IDD services at the end of 2003. The
Government appointed an appraiser to resolve differences of
opinion regarding the amount of compensation to be provided to
TELKOM and Indosat for early termination of their exclusivity
rights. On March&nbsp;30, 2004, the MoC announced that the
Government shall pay to TELKOM Rp.478&nbsp;billion (net of
taxes) as compensation. The Parliament approved
Rp.478&nbsp;billion as such compensation, which payment will be
made over a 5-year period. See Item&nbsp;3. &#147;Key
Information&nbsp;&#151; D. Risk Factors&nbsp;&#151; Risks
Relating to TELKOM and its Subsidiaries&nbsp;&#151; TELKOM
operates in a legal and regulatory environment that is
undergoing significant reforms and such reforms may adversely
affect TELKOM&#146;s business.&#148;
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As affirmed by the Government, TELKOM received a commercial
license to provide IDD services, which was issued on
May&nbsp;13, 2004. Indosat received a commercial license to
provide local telephone services, which was issued in August
2002, and a commercial license to provide domestic long-distance
services, which was issued on May&nbsp;13, 2004.
</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Competition</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Despite the termination of exclusivity rights, the Government
does not prohibit or discourage operators from attaining a
dominant position with regard to telecommunications services.
The Government, however, does prohibit operators from abusing a
dominant position. On March&nbsp;11, 2004, the MoC issued Decree
No.&nbsp;33/2004, which sets forth measures to prohibit the
abuse of their dominant position by network and service
providers. Dominant providers are determined based on factors
such as their scope of business, coverage area of services and
whether they control a particular market. Specifically, the
Decree prohibits a dominant provider from engaging in practices
such as dumping, predatory pricing, cross-subsidies, compelling
consumers to use such provider&#146;s services (to the exclusion
of competitors) and hampering mandatory interconnection
(including discriminating against specific providers).
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Interconnection</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to the express prohibitions on activities that may
create monopolistic practices and unfair business competition,
the Telecommunications Law provides for fair interconnection of
networks to allow &#147;any to any connectivity&#148;.
Interconnection fees are to be agreed by each network provider
and calculated in a transparent manner. The Telecommunications
Law provides guidance with respect to the interconnection scheme
between telecommunication network providers. Currently,
interconnection costs paid for interconnection with
TELKOM&#146;s fixed line network vary, depending on the type of
interconnected operator (e.g. IDD, cellular, fixed wireline,
fixed wireless or satellite), and are determined in accordance
with MoC Decree No.&nbsp;46/1998 (IDD and IDD, DLD and DLD,
cellular and DLD, cellular and cellular, cellular and IDD), as
amended by MoC Decree No.&nbsp;37/1999 (DLD and IDD) and MoC
Decree No.&nbsp;KU506/1997 (fixed wireline and fixed wireless).
For IDD and satellite operators, interconnection costs are based
on termination and origination charges. Interconnection costs
for fixed wireline and fixed wireless operators are based on
revenue sharing fixed under Decree No.&nbsp;KU506/1997.
Interconnection costs paid by mobile cellular operators are
based principally on negotiations between the network providers
and in the event no agreement is reached by the providers, the
interconnection costs are to be determined in accordance with
MoC Decree No.&nbsp;46/1998.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On February&nbsp;8, 2006, the MoCI issued
Regulation&nbsp;No.&nbsp;8/2006, which mandates a new cost-based
interconnection tariff scheme for all telecommunications network
and services operators, and amends and supercedes MoC Decree
No.&nbsp;46/1998, MoC Decree No.&nbsp;37/1999 and MoC Decree
No.&nbsp;KU506/1997. Under the new scheme, the operator of the
network on which calls terminate would determine the
interconnection charge to be received by it based on a formula
to be mandated by the Government, which would be intended to
have the effect of requiring that operators charge for calls
based on the costs of carrying such calls. Pursuant to
Regulation&nbsp;No.&nbsp;8/2006, each telecommunication network
operator is required to prepare and submit to the ITRB a
reference interconnect offer (the &#147;RIO&#148;), which must
prescribe the type of interconnection services offered by the
network operators and the tariffs charged for each of the
offered services. Such calculated interconnection charges must
be presented in a RIO and reported to the ITRB. TELKOM submitted
its RIO in April 2006. ITRB is expected to complete its review
of RIOs submitted by large network operators, including TELKOM,
by July 2006. The new interconnection tariff scheme will become
effective on January&nbsp;1, 2007. Pursuant a transition clause
in the Regulation, existing interconnection agreements remain
valid as long as the parties to the agreements so agree and to
the extent that the existing agreements do not conflict with the
Regulation. This new regulation is intended to ensure that
interconnection among network operators is conducted on the
basis of the principles of transparency and non-discrimination.
To reflect the new cost-based interconnection scheme, TELKOM
expects to enter into amendments to its existing interconnection
arrangements with other network operators, including Indosat.
Negotiations pertaining to such amendments are scheduled to
commence in August 2006 and be finalized by the end of 2006. See
Item&nbsp;3. &#147;Key Information&#148;&nbsp;&#151; D. Risk
Factors&nbsp;&#151; Risks relating to TELKOM and its
subsidiaries&nbsp;&#151; TELKOM operates in a legal and
regulatory environment that is undergoing significant reforms
and such reforms may adversely affect TELKOM&#146;s
business&#148;.
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>DLD and IDD Services</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Historically, DLD and IDD services could only be offered by
TELKOM and Indosat, respectively (See&nbsp;&#151;
&#147;Exclusivity&#148;). After the Government terminated the
exclusivity rights of TELKOM and Indosat, it stated its
intention to allow TELKOM to offer IDD services and Indosat to
offer DLD services, as well as allowing greater competition in
the market for DLD and IDD services. On March&nbsp;11, 2004, the
MoC issued Decree No.&nbsp;KM 28/2004, Decree No.&nbsp;KM
29/2004 and Decree No.&nbsp;KM 30/2004, which implemented the
new policy regarding IDD and DLD services. Under these Decrees:
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    DLD and IDD network operators may offer DLD and IDD service as
    part of basic telephony service;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Each DLD and IDD operator must use a distinct 3-digit access
    code for its DLD and IDD service;</TD>
</TR>

</TABLE>

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<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Customers may freely select their DLD and IDD providers; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    DLD and IDD fixed telecommunication network operators (currently
    only TELKOM and Indosat) may now provide DLD and IDD basic
    telephony services.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM has been granted authority to use &#147;007&#148; as its
IDD access code. Based on Decree No.&nbsp;28/2004, TELKOM, which
currently uses &#147;0&#148; as the access code for its DLD
service, was required by March&nbsp;1, 2005 to cease using the
&#147;0&#148; access code and to implement a three digit access
code in the form of &#147;01X&#148; for access to its DLD
service. However, TELKOM has not within the given deadline
implemented, and does not expect to in the near future to
implement, a three digit access code, as extensive installation
or upgrade of equipment will be required. TELKOM expects to
incur significant costs in connection with the new requirement
to establish three digit DLD access codes, including
expenditures required to install or upgrade new switching
facilities, create a new routing database, costs relating to
customer education and other marketing costs. In response to the
MoC Decree No.&nbsp;28/2004, in June 2004, TELKOM submitted a
letter to the ITRB highlighting the technical difficulties in
implementing the three digit DLD access codes within the given
deadline and the substantial costs involved, and requesting that
TELKOM be allowed to continue using the &#147;0&#148; prefix for
its DLD access prefix and that it be given an additional five
year period to implement the three digit DLD access codes. On
April&nbsp;1, 2005, the MoCI announced that it would make
available to Indosat the &#147;011&#148; DLD access in five
major cities that were technically ready for interconnection,
including Jakarta, and progressively extend it to all other area
codes within five years. TELKOM has also been assigned
&#147;017&#148; as its DLD access code. On March&nbsp;31, 2005,
TELKOM and Indosat entered into an amended interconnection
agreement, extending the coverage of their local fixed line
network from Jakarta, Surabaya and Malang to cover Medan, Batam,
Bandung, Bogor, Balikpapan, Yogyakarta and their surrounding
areas. This amendment also allows automatic renewal of local
coverage without entering into further amendments, except when
there is a change in the business scheme, such as a change in
the tariff scheme or a change in the settlement method from
call-by-call basis to wholesale basis. On September&nbsp;23,
2005, TELKOM and Indosat entered into an interconnection
agreement related to interconnection between
(i)&nbsp;TELKOM&#146;s local fixed line network and
Indosat&#146;s long-distance fixed line network;
(ii)&nbsp;Indosat&#146;s local fixed line network and
TELKOM&#146;s long-distance fixed line network;
(iii)&nbsp;TELKOM&#146;s and Indosat&#146;s long-distance fixed
line networks; (iv)&nbsp;TELKOM&#146;s domestic fixed line
network and Indosat&#146;s international fixed line network; and
(v)&nbsp;Indosat&#146;s local fixed line network and
TELKOM&#146;s international fixed line network, with the
interconnection tariff being calculated on a call-by-call basis.
Six cities, which include Medan, Batam, Jakarta, Surabaya,
Balikpapan and Denpasar, are covered under this interconnection
agreement. On December&nbsp;1, 2005, TELKOM and Indosat entered
into another interconnection agreement enabling each
party&#146;s customers to make domestic calls between
Indosat&#146;s mobile network and TELKOM&#146;s fixed line
network and allowing Indosat&#146;s mobile customers to access
TELKOM&#146;s IDD service by dialing &#147;007&#148;. This
agreement overrides all existing interconnection agreements on
mobile and fixed line network between TELKOM and Indosat. In the
five-year interim period and thereafter, the &#147;0&#148;
prefix may continue to be used by all operators, including
TELKOM, as default codes for each operator&#146;s customers to
access the DLD service selected by the respective operator.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On May&nbsp;17, 2005, the MoCI issued decree No.&nbsp;6/2005.
According to Decree No.&nbsp;6/2005, the three digit access code
in the form of &#147;01X&#148; and &#147;0&#148; access code for
access to DLD services may be used. The &#147;0&#148; access
code is being used to accommodate customers who prefer not to
choose their long-distance carrier, while the &#147;01X&#148;
access code has to be implemented gradually in local areas in
which TELKOM has technical capabilities to support such
services. By April&nbsp;1, 2010, the &#147;01X&#148;
long-distance services must be commenced in all TELKOM&#146;s
local areas to accommodate customers who prefer to choose their
long-distance carrier.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indonesian
Telecommunications Regulatory Body</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On July&nbsp;11, 2003, the Indonesian Telecommunications
Regulatory Body (&#147;ITRB&#148;) was established as the
implementing agency of the Telecommunications Law. Under MoC
Decree No.&nbsp;KM 31/2003, the ITRB is authorized to regulate,
monitor and control the operations of the telecommunications
sector.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
The ITRB is composed of officials from the DGPT and the
Committee of Telecommunication Regulations. Combined with
further privatization of TELKOM and Indosat, the establishment
of such an independent regulatory body is intended to reduce the
Government&#146;s role in the telecommunications industry from
that of being the telecommunications industry&#146;s financier,
operator, regulator and licenser to becoming primarily the
industry&#146;s licenser and regulator.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2003 the MoC also announced the establishment of the
Telecommunication Traffic Clearing System (&#147;SKTT&#148;),
which will assist the ITRB in the performance of its functions
and which will be responsible for all interconnection matters.
It is expected that through the SKTT, the ITRB will obtain
accurate data about the profile of interconnection traffic among
operators so as to ensure transparency in the charging of
interconnection fees. The actual operation of the SKTT will be
undertaken by PT Pratama Jaringan Nusantara, a private entity
selected by the MoC on February&nbsp;18, 2004, which will act
under the supervision and control of the ITRB. As of the date of
this Annual Report, the SKTT has not commenced operations.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consumer Protection</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the Telecommunications Law, each operator must provide
guarantees for consumer protection in relation to quality of
services, usage or service fees, compensation and other matters.
The law also allows customers injured or damaged by negligent
operations to file claims against negligent providers.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Universal Service
Obligations</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the Telecommunications Law, all telecommunications network
operators and service providers are bound by a Universal Service
Obligation, which requires such network operators and
telecommunication service providers to make contribution towards
providing universal telecommunication facilities and
infrastructure or other forms of compensation. On
September&nbsp;3, 2003, the DGPT issued a letter stating that
telecommunications operators in Indonesia will be required to
contribute 0.75% of gross revenues (with due consideration for
bad debt and interconnection charges) for USO development. On
March&nbsp;11, 2004, the MoC issued Decree No.&nbsp;34/2004,
which stated that USO facilities must meet the following minimum
requirements: (a)&nbsp;the facilities should meet the standards
of basic telephony services, including facsimile and dial-up
Internet services; (b)&nbsp;the facilities should provide basic
public telephony services, with domestic long-distance,
international and mobile access; (c)&nbsp;the facilities should
provide telecommunication services that are capable to transmit
and receive data; (d)&nbsp;the facilities should be accessible
for emergency services; and (e)&nbsp;the facilities should
utilize equipment that has been certified by the DGPT. Tariffs
for services provided under the USO program are based on the
applicable PSTN tariffs. On March&nbsp;30, 2004, the MoC issued
Announcement No.&nbsp;PM. 2/2004, which sets forth the basic
policies underlying the USO program and required
telecommunications operators in Indonesia to contribute 0.75% of
gross revenues (with due consideration for bad debt and
interconnection charges) for USO development. On
September&nbsp;30, 2005, the MoCI issued Regulation
No.&nbsp;15/2005 which provides that the USO contribution in the
amount of 0.75% of the gross revenues is to be made payable per
quarter, per semester or annually, at the latest on
March&nbsp;31 of the following year, to the State Treasury
through a certain determined account. As of April&nbsp;30, 2006,
TELKOM and its subsidiaries have paid Rp.213.1&nbsp;billion out
of total USO amount payable of Rp.307.7&nbsp;billion for the
fiscal year 2005.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Implementing Regulations</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
To date, the Government has issued several implementing
regulations relating to the Telecommunications Law, including
Government Regulation No.&nbsp;52/2000 (&#147;Operation of
Telecommunications&#148;) and Government Regulation
No.&nbsp;53/2000 (&#147;Utilization of Radio Frequency Spectrum
and Satellite Orbit&#148;), as well as ministerial decrees,
including No.&nbsp;KM&nbsp;20/2001 (&#147;Operation of
Telecommunications Networks&#148;), No.&nbsp;KM&nbsp;21/2001
(&#147;Operation of Telecommunications Services&#148;),
No.&nbsp;KM&nbsp;12/2002 (&#147;Completing MPPT Decree
No.&nbsp;KM.&nbsp;<FONT style="white-space: nowrap">79/PR-301/MPPT-95</FONT>
on Procedures for the Tariff Adjustment of
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
Domestic Basic Telecommunications Services&#148;),
No.&nbsp;KM&nbsp;40/2002 (&#147;Guidance for Tariff
Implementation of State Revenue on Tax from Cost of Utilization
Right of Radio Frequency Spectrum&#148;),
No.&nbsp;KM&nbsp;23/2002 (&#147;Internet Telephony Service for
Public&#148;), No.&nbsp;KM&nbsp;31/2003 (&#147;Indonesian
Telecommunication Regulatory Body&#148;),
No.&nbsp;KM&nbsp;28/2004 (&#147;Amendments to the Decree of the
Minister of Communication No.&nbsp;KM.&nbsp;4/2001 of
Fundamental Technical Plan National 2000),
No.&nbsp;KM&nbsp;29/2004 (&#147;Amendments to the Decree of the
Minister of Communication No.&nbsp;20 of 2001 on the Provision
of Telecommunication Network&#148;), No.&nbsp;KM&nbsp;30/2004
(&#147;Amendments to the Decree of the Minister of Communication
No.&nbsp;21 of 2001 on the provision of Telecommunication
Services&#148;), No.&nbsp;KM&nbsp;31/2004 (&#147;Amendment to
the Decree of the Minister of Communication No.&nbsp;23/2002 on
the Provisions of Internet Telephony Services for Public
Needs&#148;), No.&nbsp;KM&nbsp;32/2004 (&#147;Interconnection
Charges for Telecommunication&#148;), No.&nbsp;KM&nbsp;33/2004
(&#147;Supervision of Fair Competition in the Provision of Fixed
Network and Basic Telephony Services&#148;),
No.&nbsp;KM&nbsp;34/2004 (&#147;Universal Service
Obligation&#148;), No.&nbsp;KM&nbsp;35/2004 (&#147;Provision of
Wireless Local Fixed Network with Limited Mobility&#148;), MoCI
Regulation No.&nbsp;6/2005 (&#147;Second Amendments to the
Decree of the Minister of Communication No.&nbsp;KM&nbsp;4/2001
of Fundamental Technical Plan National 2000&#148;), MoCI
Regulation No.&nbsp;7/2005 (&#147;Second Amendments to the
Decree of the Minister of Communication No.&nbsp;KM&nbsp;23/2002
on Internet Telephony Service for Public&#148;), MoCI Regulation
No.&nbsp;13/2005 (&#147;Operation of Telecommunications using
Satellite&#148;), MoCI Regulation No.&nbsp;15/2005
(&#147;Implementing Guidance on Tariff for Non-Tax State Income
from USO Contribution&#148;), MoCI Regulation No.&nbsp;23/2005
(&#147;Prepaid Card Registration&#148;), MoCI Regulation
No.&nbsp;24/2005 (&#147;Provision of Value Added
Features&#148;), MoCI Regulation No.&nbsp;01/2006
(&#147;Operation of Radio Frequency Band 2.1 GHz for Cellular
Network) and MoCI Regulation No.&nbsp;8/2006
(&#147;Interconnection&#148;). The MoCI and DGPT are in the
process of finalizing a number of additional ministerial decrees
that are intended to implement other aspects of the
Telecommunications Law, including decrees relating to special
telecommunications operations and implementation of the
cost-based interconnection system.
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Satellite regulation</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The international satellite industry is highly regulated. In
addition to being subject to domestic licensing and regulation
in Indonesia such as for the use of orbital slots and radio
frequencies, the placement and operation of TELKOM&#146;s
satellites are also subject to registration with the Radio
Communications Bureau of the International Telecommunications
Union and the Intelsat consultation process.
</DIV>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Fixed Wireless Access regulation</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On March&nbsp;11, 2004, the MoC issued Decree No.&nbsp;35/2004,
which provides that only fixed network operators holding
licenses issued by the MoC and using radio frequency access
networks may offer fixed wireless access service. In addition,
the decree states that each fixed wireless access provider must
provide basic telephony services. However, a fixed wireless
access provider can only provide fixed wireless access service
within its designated area code. Further, fixed wireless access
service may not incorporate roaming and auto mutation features.
Accordingly, customers cannot use their fixed wireless access
phones to make or receive calls when they are located outside
their respective area codes.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Competition</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fixed Wireline and Fixed
Wireless</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Historically, TELKOM had the exclusive right to provide fixed
line domestic telecommunications services in Indonesia. Pursuant
to regulations introduced to implement the Telecommunications
Law, the Government terminated TELKOM&#146;s monopoly in
providing fixed line domestic telecommunications services. The
MoC issued Indosat a license to provide local telephone services
from August 2002. On May&nbsp;13, 2004, Indosat received its
commercial license to provide domestic long-distance telephone
services. Indosat launched its CDMA fixed wireless access
service under the brand name &#147;StarOne&#148; in Surabaya on
May&nbsp;29, 2004 and in Jakarta on July&nbsp;25, 2004, thereby
creating a &#147;duopoly system&#148; in
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
Indonesia&#146;s fixed line domestic telecommunications market.
As of December&nbsp;31, 2005, Indosat is able to provide
nationwide DLD services through its CDMA-based fixed wireless
network, its own fixed line network and its interconnection
arrangements with TELKOM. Based on the interconnection agreement
between TELKOM and Indosat dated September&nbsp;23, 2005, TELKOM
has agreed to open interconnection with Indosat&#146;s local
fixed line service in certain areas such as Jakarta, Surabaya,
Batam, Medan, Balikpapan and Denpasar. To date, Indosat has
expanded the coverage of its local fixed network to Bogor and
Denpasar. Indosat also commenced offering limited domestic
long-distance services for calls within its network in late 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM&#146;s fixed line services also faces direct and indirect
competition from mobile cellular services, fixed cellular
services, SMS, VoIP services and
<FONT style="white-space: nowrap">e-mail.</FONT> TELKOM expects
that the increasing uses of these services may adversely affect
future demand for its fixed line services.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cellular</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of the date of this Annual Report, the cellular market in
Indonesia is dominated by Telkomsel, Indosat and Excelcomindo.
As of December&nbsp;31, 2005, these nationwide GSM operators
collectively had over 90% of the Indonesian cellular market. The
number of GSM cellular subscribers in Indonesia totaled
approximately 30.4&nbsp;million at the end of 2004 and
approximately 47.1&nbsp;million at the end of 2005, representing
an annual growth rate of approximately 55% during that period.
Despite this rapid growth, the cellular penetration rate in
Indonesia, at approximately 21% at the end of 2005, has remained
relatively low compared to many other countries. During the last
two years, competition among cellular operators has intensified.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As part of the elimination of TELKOM&#146;s and Indosat&#146;s
cross-shareholdings in several telecommunications companies in
2001, TELKOM sold its 22.5% interest in Satelindo to Indosat and
Indosat sold its 35% interest in Telkomsel to TELKOM. This has
resulted in the cellular market becoming more competitive as
contemplated by the Blueprint and the Telecommunications Law.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
GSM mobile cellular operators compete principally on the basis
of pricing, brand, network coverage, distribution, technology,
value-added services and service quality. TELKOM believes that
Telkomsel is able to compete effectively in the Indonesian
cellular market due to the quality and coverage of its mobile
cellular network and the strength of its brand name.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM&#146;s new CDMA-based fixed wireless phone service,
TELKOMFlexi, which offers limited mobility and charges customers
at PSTN tariff rates that are substantially lower than tariffs
for cellular services, may over time offer a competitive
alternative to GSM services and attract Telkomsel customers that
prefer lower tariff rates in exchange for limited mobility. See
Item&nbsp;3. &#147;Key Information&nbsp;&#151; D.&nbsp;Risk
Factors&nbsp;&#151; Risk Relating to TELKOM and its
subsidiaries&nbsp;&#151; Regulators and other telecommunications
operators may challenge TELKOM&#146;s ability to apply PSTN
tariffs to its new CDMA-based fixed wireless phone service,
which is marketed under the brand name TELKOMFlexi&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, Telkomsel remained the largest
national licensed provider of GSM services in Indonesia, with
approximately 24.3&nbsp;million cellular subscribers and a
market share of approximately 52% of the GSM mobile cellular
market, which represented a slight decrease compared to its
approximately 54% market share as of December&nbsp;31, 2004.
Indosat, as a result of its merger with Satelindo, was the
second largest provider with approximately 14.5&nbsp;million
cellular subscribers and a market share of approximately 31% as
of December&nbsp;31, 2005. Excelcomindo had approximately
7.0&nbsp;million subscribers and a market share of approximately
13% as of December&nbsp;31, 2005. Since 2003, Mobile 8 has also
operated a nationwide CDMA mobile cellular service. Mobile 8 had
approximately 1.2&nbsp;million subscribers and a market share of
approximately 2.5% as of December&nbsp;31, 2005. In addition to
the nationwide GSM operators, a number of smaller regional GSM,
analog and CDMA cellular providers operate in Indonesia.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">63

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth summary information as of
December&nbsp;31, 2005 on each of the three leading nationwide
licensed GSM mobile cellular operators:
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Nationwide Licensed GSM Mobile Cellular Operators in
Indonesia</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="34%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="24%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" align="center" nowrap><B>Operator</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Telkomsel</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Indosat</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Excelcomindo</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Launch date</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    May 1995</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    November
    1994<SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    October 1996</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Licensed frequency bandwidth (GSM 900&nbsp;&#38; 1800)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    30 MHz</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    30 MHz</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    25 MHz</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Licensed coverage</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Nationwide</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Nationwide</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Nationwide</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Network coverage</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Nationwide</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Information not available</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Information not available</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Market share (as of December&nbsp;31,
    2005)<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    52%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    31%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    13%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Subscribers (as of December&nbsp;31,
    2005)<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    24.3 million</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    14.5 million</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    7.0 million</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Estimated, based on statistics compiled by TELKOM.</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    In November 2003, Indosat and Satelindo merged, and Indosat has
    taken over Satelindo&#146;s cellular operations.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IDD</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On August&nbsp;1, 2001, the Government through the DGPT,
announced the early termination of Indosat&#146;s exclusivity
rights for IDD. The announcement stated the Government&#146;s
intention that TELKOM would receive a commercial license to
provide IDD services by the end of 2003. Although TELKOM only
received its commercial license on May&nbsp;13, 2004, it had
already made necessary preparations to provide IDD services even
prior to the receipt of such license and on June&nbsp;7, 2004
TELKOM began offering IDD fixed line services to customers.
TELKOM has upgraded some switching to have International Gateway
capabilities in Batam, Jakarta and Surabaya. These gateways have
received certificates of operation (sertifikat ULO) from the
DGPT. In order to connect with overseas operators, TELKOM has
built two microwave links to connect Batam-Singapore and
Batam-Pangerang (Malaysia). In addition, TELKOM, SingTel and CAT
developed the TIS submarine cable system in 2003 connecting
Batam, Singapore and Thailand. TELKOM has also signed an
agreement with Telekom Malaysia Berhad for the deployment and
maintenance of a new submarine optical cable to connect Dumai
(Indonesia) to Melaka (Malaysia), which was completed in
December 2004. TELKOM also extended its international cable by
purchasing bandwidth capacity to connect with Hong Kong and
TELKOM utilizes this capacity to connect to other countries,
such as the United States. TELKOM also completed developing the
ground segment to connect to the Intelsat Satellite in December
2004. As a new player in IDD, TELKOM cooperates with some global
operators to get direct or indirect connection to reach all
offshore destinations. All these preparations have allowed
TELKOM to begin offering customers IDD fixed line services on
June&nbsp;7, 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;VoIP</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM formally launched its VoIP services in September 2002.
VoIP uses data communications to transfer voice traffic over the
Internet, which usually provides substantial cost savings to
subscribers. In addition to TELKOM, Excelcomindo, Indosat,
Atlasat, Gaharu and PT Satria Widya Prima provide VoIP services
in Indonesia. Other unlicensed operators also provide VoIP
services that may be accessed through the Internet as well as
from software that allows
<FONT style="white-space: nowrap">PC-to</FONT>-PC voice
communications through the Internet. VoIP operators offering
international services also compete with IDD operators, such as
Indosat and, beginning on June&nbsp;7, 2004, TELKOM.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
VoIP operators compete primarily on the basis of pricing and
service quality. Certain VoIP operators have started offering
services such as budget calls and prepaid calling cards, which
is expected to result in greater competition among VoIP
operators and other IDD service providers.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">64
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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Satellite</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In recent years, competition in the Asia-Pacific satellite
business has been intense. Companies in this business compete
primarily on coverage power, product offerings and price. The
Indonesian satellite industry is loosely regulated and in
practice operates in accordance with an
<FONT style="white-space: nowrap">&#147;open-sky&#148;</FONT>
policy. This means that Indonesian satellite operators must
compete with foreign satellite operators.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Other</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During the last three years, competition with respect to
multimedia, Internet, and data communications-related services
has intensified principally due to the issuance of new licenses
as a result of the deregulation of the Indonesian
telecommunications industry. TELKOM expects competition to
continue to intensify. Multimedia, Internet and data
communications-related service providers in Indonesia compete
principally on the basis of price, range of services provided,
network quality, network coverage and customer service quality.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Licenses</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Telecommunications Law requires telecommunication network
operators and telecommunication service operators, including
TELKOM, to obtain licenses to operate telecommunications
networks and provide telecommunications services.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Fixed wireline and fixed wireless.</I> TELKOM provided local
and domestic long-distance fixed line services based on
Government Regulation&nbsp;No.&nbsp;25/1991 and Government
Regulation&nbsp;No.&nbsp;8/1993, which permits TELKOM to provide
basic and non-basic fixed line telecommunications services.
Based on MoC&nbsp;Decree No.&nbsp;KM 39/1993 concerning basic
telecommunication operation, TELKOM was permitted to enter into
joint operation schemes (KSO) with its existing KSO partners for
the provision of fixed line services in their respective
regions. The Government has amended certain of TELKOM&#146;s
fixed line licenses to comply with the new Telecommunication
Law, and TELKOM received its Modern License to provide fixed
line services, DLD services and IDD services on May&nbsp;13,
2004. TELKOM also provides its fixed wireless services pursuant
to its authorization to provide fixed line services and applies
PSTN tariffs for this service, which are substantially lower
than those for cellular services. TELKOM&#146;s ability to
provide fixed wireless services at PSTN tariff rates may be
challenged by regulators, other cellular operators and cellular
trade associations. See Item&nbsp;3. &#147;Key
Information&nbsp;&#151; D. Risk Factors&nbsp;&#151; Risks
relating to TELKOM and its subsidiaries&nbsp;&#151; Regulators
and other telecommunications operators may challenge
TELKOM&#146;s ability to apply PSTN tariffs to its new
CDMA-based fixed wireless phone service, which is marketed under
the brand name TELKOMFlexi.&#148;
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Cellular.</I> Telkomsel holds licenses to operate a
nationwide GSM mobile cellular telephone network, to use
7.5&nbsp;MHz of radio frequency bandwidth in the 900 MHz band
and to use 22.5&nbsp;MHz of radio frequency bandwidth in the
1800&nbsp;MHz band. Telkomsel also holds licenses from the
Indonesian Investment Coordinating Board that permit Telkomsel
to develop cellular services with national coverage, including
the expansion of its network capacity. In addition, Telkomsel
holds permits and licenses from and registrations with certain
regional governments and/ or governmental agencies, primarily in
connection with its operations in such regions, the properties
it owns and/ or the construction and use of its base transceiver
stations.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Third-Generation Mobile Telecommunications System (3G).</I>
In February 2006, the Indonesian Government conducted the tender
for three radio frequency spectrum licenses of 2.1&nbsp;GHz,
each having a bandwidth of 5&nbsp;MHz, to be used in conjunction
with the new licenses to operate nation-wide 3G&nbsp;cellular
telecommunication network in Indonesia. The winning bidders
would become the operators of 3G cellular telecommunication
networks along with two existing license holders (HCPT and
PT&nbsp;Lippo Telekom) that had received the 3G licences through
a competitive bid in 2003. On February&nbsp;14, 2006, under MoCI
Regulation&nbsp;No.&nbsp;19/2006, the 3G&nbsp;licenses were
awarded to Telkomsel, Indosat and Excelcomindo. As winning
bidders, Telkomsel, Indosat and Excelcomindo are subject to an
upfront fee of up to 200% of the bidding price, payable within
30 business days of the award.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">65

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
Telkomsel, Indosat and Excelcomindo are also subject to a radio
frequency spectrum usage fee of up to 20% of the tender price
for the first year, 40% of the tender price for the second year,
60% of the tender price for the third year, 100% of the tender
price for the fourth year, and 130% of the tender price for the
fifth and each subsequent year. The tender price is the lowest
price of the three highest offers, which is Rp.160&nbsp;billion.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>IDD.</I> TELKOM received, as part of its Modern License, its
commercial license to provide IDD services on May&nbsp;13, 2004
pursuant to the terms of MoC Decree No.&nbsp;KP 162/2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>VoIP and ISP.</I> TELKOM holds a Modern License to provide
VoIP and ISP services, pursuant to a DGPT Decree
No.&nbsp;SK01/dirjen/2004, which also permits TELKOM to provide
data communications services.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tariffs and Interconnection
Charges</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Government divides tariffs into two categories:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Tariffs for the provision of telecommunications services; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Tariffs for provision of telecommunications networks.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tariffs for the Provision of
Telecommunications Services</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Generally, the MoCI regulates prices and the amount TELKOM can
charge is based on a tariff formula for telecommunications
services in Indonesia. Telecommunications operators may set the
amount of tariff. In this regard, TELKOM&#146;s operating
business units have authority to make adjustments to prices
based on specific guidelines fixed by the directors of TELKOM.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fixed Wireline Tariffs</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Fixed wireline tariffs consist of monthly subscription and usage
charges. The Government establishes fixed wireline tariffs by
reference to a price cap formula that calculates the maximum
average percentage increase in fixed wireline tariffs for a
particular year. The maximum increase typically equals the
Indonesian Consumer Price Index (CPI) for the preceding year, as
published by the Indonesian Central Bureau of Statistics, minus
an efficiency factor (the &#147;X-factor&#148;), which the
Government determines by taking into consideration certain
factors including improvements in the cost efficiency of the
services resulting from technological improvements, management
efficiency, changes in the Rupiah-U.S.&nbsp;Dollar exchange
rate, the interests of affected telecommunications operators and
the purchasing power of customers.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In calculating the maximum total percentage increase in tariffs
for a particular year, the tariff components for installation,
monthly charges and usage charges are weighted in proportion to
the contribution made to total revenue of those services (basket
revenues) in the prior year. The weighted average increase in
prices charged for the services for any year must be equal to or
less than the price cap percentage. In addition to tariff
increases, the tariff components can also be
&#147;rebalanced&#148; from time to time such that the tariffs
for monthly and usage charges increase at different rates or
certain tariffs decrease while others increase.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On January&nbsp;29, 2002, the MoC announced that fixed wireline
tariffs would be increased by an average of 45.49% over three
years. Effective February&nbsp;1, 2002, the MoC increased fixed
wireline tariffs by a weighted average of 15%. Although fixed
wireline tariffs were expected to be increased again effective
January&nbsp;1, 2003, public opposition following the
announcement by TELKOM of tariff increases led to the suspension
on January&nbsp;16, 2003 of the implementation of such
increases. See Item&nbsp;3. &#147;Key Information&nbsp;&#151; D.
Risk Factors&nbsp;&#151; Risks relating to TELKOM and its
subsidiaries&nbsp;&#151; TELKOM operates in a legal and
regulatory environment that is undergoing significant reforms
and such reforms may adversely affect TELKOM&#146;s
business&#148;.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">66

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On March&nbsp;30, 2004, the Government announced that it would
allow operators to rebalance their tariffs, with the resulting
weighted average of tariffs increasing by 9%. As a result,
TELKOM has adjusted its fixed wireline and fixed wireless
tariffs, with local charges increasing by 28.2%, DLD tariffs
decreasing by an average of 10.6% and monthly subscription
charges increasing by varying amounts from 12.1% to 25.1%.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The current tariffs chargeable by TELKOM, which became effective
on April&nbsp;1, 2004, are as follows:
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Tariff Rate Schedule (effective April&nbsp;1, 2004):</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Installation and Monthly Charges:</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="45%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="center" nowrap><B>Access charges</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Business</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Residential</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Social</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>(Rp.)</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>(Rp.)</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>(Rp.)</B></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Installation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    175,000 &#150; 450,000</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    75,000 &#150; 295,000</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    50,000 &#150; 205,000</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Monthly Subscription</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    38,400 &#150; 57,600</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    20,600 &#150; 32,600</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    12,500 &#150; 18,500</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Usage charges:</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="43%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Price per Pulse</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Pulse Duration</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>(Rp.)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Local</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Up to 20 km</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    250</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    3 min (off peak) and 2 min (peak)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Over 20 km</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    250</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    2 min (off peak) and 1.5 min (peak)</TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="63%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rounding Time</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Price Per Minute</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Block Duration</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Rp.)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Domestic Long-distance</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    0-20 km</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>83 &#150; 122</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>1&nbsp;minute</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    20-30 km</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>122 &#150; 163</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>1&nbsp;minute</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    30-200 km</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>325 &#150; 1,290</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>6 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    200-500 km</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>460 &#150; 1,815</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>6 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Over 500 km</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>570 &#150; 2,270</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>6 sec</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Government did not carry out its plan to further increase
fixed wireline tariffs to reach the 45.49% average increase
announced in January 2002 by January 2005. In an announcement by
the MoCI on April&nbsp;1, 2005 regarding access codes, the MoCI
indicated that there would be another rebalancing of tariffs in
the future. TELKOM proposed the new tariff rebalancing plan to
the ITRB on October&nbsp;27, 2005. The plan is still being
discussed. TELKOM is uncertain as to whether or when the tariff
balancing is going to be implemented.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CDMA Fixed Wireless Tariffs</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Tariffs charged to CDMA fixed wireless subscribers are reported
as fixed line revenues. TELKOM offers both postpaid and prepaid
fixed wireless services.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Postpaid.</I> Postpaid subscribers pay a one-time activation
charge of Rp.25,000 and a monthly charge of Rp.30,000. Usage
charges for postpaid subscribers beginning April&nbsp;1, 2004
are as follows:
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Usage charges:</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="45%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="32%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Price Per Pulse</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Pulse Duration</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Rp.)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Local</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2 min (off peak) and 1.5 min (peak)</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">67

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="63%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rounding Time</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Price Per Minute</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Block Duration</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Rp.)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Domestic Long-distance</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    0-200 km</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>325 &#150; 1,290</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>6 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    200-500 km</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>460 &#150; 1,815</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>6 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Over 500 km</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>570 &#150; 2,270</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>6 sec</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For SMS, postpaid subscribers are charged Rp.250 per message.
Postpaid subscribers who use TELKOM Internet access via wireless
dial-up are charged Rp.165 per minute. Postpaid subscribers who
use Public Data Network based dedicated lines for Internet
access are charged Rp.5 per KBps.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Prepaid.</I> Usage charges for prepaid subscribers, effective
February&nbsp;10, 2004, including VAT of 10%, are summarized as
follows:
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Usage charges:</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="63%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rounding Time</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Price Per Minute</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Block Duration</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>(Rp.)</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Flexi to Flexi/Fixed Wireline:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Local</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    260</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>30 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Domestic Long-distance</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    0-200 km</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    700 &#150; 1,100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>30 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Over 200 km</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    1,600 &#150; 2,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>30 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Flexi to mobile cellular:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Local</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    650 &#150; 810</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>30 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Domestic Long-distance</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    0-200 km</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    1,100 &#150; 1,540</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>30 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Over 200 km</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    2,250 &#150; 3,150</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>30 sec</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For SMS, prepaid subscribers are charged Rp.350 per message.
Prepaid subscribers who use TELKOM Internet access via wireless
dial-up are charged Rp.350 per minute.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IDD Tariffs</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM commenced offering IDD fixed line services on
June&nbsp;7, 2004. Tariffs for IDD calls are set by service
providers, subject to specified maximum limits established by
the Government. As of the date of this Annual Report,
TELKOM&#146;s IDD tariffs are as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="63%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rounding Time</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="center" nowrap><B>Region</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Price Per Minute</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Block Duration</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Rp.)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Africa</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,090&nbsp;&#150;&nbsp;6,440</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Americas and Caribbean</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,090&nbsp;&#150;&nbsp;7,470</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Asia and Oceania</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,410&nbsp;&#150;&nbsp;9,630</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Europe</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,090&nbsp;&#150;&nbsp;9,630</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Middle East</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,090&nbsp;&#150;&nbsp;8,460</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6 sec</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cellular Tariffs</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Indonesian cellular telecommunications market generally
operates on a &#147;calling party pays&#148; system, which
requires that the originators of telephone calls pay for calls.
Cellular operators in Indonesia set their own tariffs, subject
to specified maximum limits established by the Government. On
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">68

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
February&nbsp;8, 2006, the MoCI issued Decree No.&nbsp;8/2006,
which mandates the new cost-based interconnection tariff scheme
for all telecommunications network and services operators. This
scheme becomes effective on January&nbsp;1, 2007. See
Item&nbsp;3. &#147;Key Information&nbsp;&#151; D. Risk
Factors&nbsp;&#151; Risks relating to TELKOM and its
subsidiaries&nbsp;&#151; TELKOM operates in a legal and
regulatory environment that is undergoing significant reforms
and such reforms may adversely affect TELKOM&#146;s
business&#148; and Item&nbsp;4. &#147;Information on the
Company&nbsp;&#151; B.&nbsp;Business Review&nbsp;&#151;
Indonesian Telecommunications Industry&nbsp;&#151;
Regulations&nbsp;&#151; Interconnection&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Postpaid Tariffs.</I> The cellular tariffs for postpaid
subscription services consist of activation, monthly
subscription and usage charges. The following table sets forth
the maximum cellular tariffs for postpaid services, effective
February&nbsp;25, 1998:
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Mobile Cellular Tariff (maximum postpaid tariff):</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Activation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Rp.200,000</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Monthly Charge (including frequency charge)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Rp.65,000/month</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Usage Charge:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Air Time</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Rp.325/minute</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Roaming<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Rp.1,000/call plus incoming charge per minute</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Local Cellular Conversation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    PSTN local tariff</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    DLD Cellular Conversation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    PSTN DLD tariff</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Beginning in mid-2005, Telkomsel provides free roaming services
    to its subscribers.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;
Prior to the amendments in 1998 to implement the current
cellular tariff structure, the Government amended the cellular
tariff structure in 1997 and 1994.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telkomsel charges new postpaid subscribers a maximum one-time
connection fee of Rp.200,000 for service activation, although
discounts may be granted. After initial connection, Telkomsel
charges a monthly subscription fee ranging from Rp.0 (provided
minimum monthly usage reaches Rp.25,000) to Rp.65,000 per month
(depending on the chosen tariff plan). Usage charges are as
follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="63%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rounding Time</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Price Per Minute</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Block Duration</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Rp.)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Mobile cellular to mobile cellular:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Local</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>650&nbsp;&#150;&nbsp;938</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20&nbsp;sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Domestic Long-distance</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    30-200 km</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,110&nbsp;&#150;&nbsp;2,628</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Over 200 km</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,220&nbsp;&#150;&nbsp;3,083</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Mobile cellular to fixed line:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Local</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>450&nbsp;&#150;&nbsp;531</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Domestic Long-distance</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    30-200 km</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>650&nbsp;&#150;&nbsp;1,696</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    200-500 km</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>785&nbsp;&#150;&nbsp;2,221</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Over 500 km</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>895&nbsp;&#150;&nbsp;2,676</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>International Long-distance:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Group I</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,675&nbsp;&#150;&nbsp;5,880</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Group II</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,237&nbsp;&#150;&nbsp;6,780</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Group III</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,687&nbsp;&#150;&nbsp;7,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Group IV</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,362&nbsp;&#150;&nbsp;8,580</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Group V</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,225&nbsp;&#150;&nbsp;9,960</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15 sec</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">69

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; ">

<TR style="font-size: 1pt;">
    <TD width="63%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rounding Time</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Price Per Minute</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Block Duration</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Rp.)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Group VI</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,050&nbsp;&#150;&nbsp;11,280</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Group VII</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,025&nbsp;&#150;&nbsp;12,840</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15 sec</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Prepaid Tariffs.</I> For prepaid cellular services,
activation charges may be freely determined by cellular
operators while usage charges are limited to a maximum of 140%
above the peak usage charges for postpaid services. Telkomsel
charges its prepaid customers (SimPATI / KARTU As) usage charges
as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="44%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Rounding Time</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Price Per Minute</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Block Duration</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>(Rp.)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>SimPATI</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>KARTU As</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>SimPATI</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>KARTU As</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Calls within Telkomsel:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Local</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>300&nbsp;&#150;&nbsp;1,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30 sec</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Domestic Long-distance</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Zone 1</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>300&nbsp;&#150;&nbsp;4,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30 sec</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Zone 2</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>300&nbsp;&#150;&nbsp;4,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30 sec</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Calls to other cellular:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Local</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,300&nbsp;&#150;&nbsp;1,600</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30 sec</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Domestic Long-distance</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Zone 1</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,500&nbsp;&#150;&nbsp;4,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,850</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30 sec</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Zone 2</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,000&nbsp;&#150;&nbsp;4,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,850</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30 sec</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Calls to fixed line/fixed wireless:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Local</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>750&nbsp;&#150;&nbsp;950</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>700</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30 sec</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Domestic Long-distance</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    30-200 km</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,000&nbsp;&#150;&nbsp;2,300</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30 sec</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    200-500 km</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,200&nbsp;&#150;&nbsp;3,720</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30 sec</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Over 500 km</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,600&nbsp;&#150;&nbsp;4,150</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30 sec</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>International Long-distance:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Group I-III</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,500&nbsp;&#150;&nbsp;8,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15 sec</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15 sec</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Group IV-VII</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,000&nbsp;&#150;&nbsp;12,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15 sec</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15 sec</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>Leased Line Tariffs</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Government determines the maximum tariffs for leased lines.
The Government reduced leased line tariffs substantially in 1997
and 1998. On January&nbsp;1, 1997, the Government decreased
tariffs for leased lines by an average of 52%. Leased line
tariffs for other telecommunications operators and Government
bodies were further reduced by up to 30% effective
January&nbsp;1, 1998. The Government has announced that it
intends to move towards a formula-based tariff structure for
leased line services, however, it has not announced a proposed
framework for such a formula.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">70

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth the maximum leased line tariffs,
effective January&nbsp;1, 1998 and still valid as of the date
hereof:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="64%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Maximum Tariff</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>(Rp.)</B></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Installation charge</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Customer access</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    600,000&nbsp;&#150;&nbsp;700,000<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other operator access</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    900,000</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Monthly subscription charge</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Analog line</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Local (or up to 25&nbsp;km)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    60,000&nbsp;&#150;&nbsp;250,000<SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Inter-local (over 25&nbsp;km)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    779,400&nbsp;&#150;&nbsp;3,557,750<SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Digital line</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Local (or up to 25&nbsp;km)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    190,000&nbsp;&#150;&nbsp;172,268,000<SUP style="font-size: 85%; vertical-align: text-top">(4)</SUP></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Inter-local (over 25&nbsp;km)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    478,800&nbsp;&#150;&nbsp;2,308,628,250
    <SUP style="font-size: 85%; vertical-align: text-top">(5)</SUP></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Price differs by equipment provided by TELKOM.</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Price differs by user (private, other licensed operator, or
    government) and equipment provided by TELKOM.</TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    Price differs by user (private, other licensed operator, or
    government) and distance.</TD>
</TR>

<TR valign="top">
    <TD>(4)&nbsp;</TD>
    <TD align="left">
    Price differs by user (private, other licensed operator, or
    government) and speed.</TD>
</TR>

<TR valign="top">
    <TD>(5)&nbsp;</TD>
    <TD align="left">
    Price differs by user (private, other licensed operator, or
    government), speed and distance.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>VoIP Tariffs</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Charges for VoIP services may be freely determined by VoIP
operators, based on cost. TELKOM has launched its VoIP services,
which as of the date of this Annual Report consist of TELKOM
<FONT style="white-space: nowrap">Global-017</FONT> and its
cheaper alternative, TELKOMSave. TELKOM believes that the tariff
for TELKOM <FONT style="white-space: nowrap">Global-017</FONT>
service and the TELKOMSave service are approximately 40% and
60%, respectively, of the tariff charged by IDD operators in
Indonesia.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Kiosk phone Tariffs</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Charges for kiosk phones may be freely determined by operators.
Kiosk phones are public phones that are operated by
third-parties. TELKOM gains 70% of basic tariff charged by
operators to its customers on calls placed from kiosk phones.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Satellite Tariffs</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM generally charges an annual tariff of between
US$1.15&nbsp;million to US$1.5&nbsp;million per transponder,
although in some instances TELKOM may offer discounted tariffs
for long-term commitments or loyal customers.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Broadband Access</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth the current tariffs for
TELKOM&#146;s broadband access services:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="34%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="18%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Fees for Usage</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>in Excess of</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="center" nowrap><B>Fees for Usage in</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Monthly</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Monthly</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="center" nowrap><B>SpeedyLink ADSL<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Activation Fee</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Monthly Fee</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Usage&nbsp;Allowance<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Allowance</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Rp.)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Rp.)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Rp.)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Limited 384 kbps</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>200,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>200,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    500 MB&nbsp;&#150;&nbsp;1.0&nbsp;GB
    <SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>500/MB</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Limited 512 kbps</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>200,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>350,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    2.0 GB</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>500/MB</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unlimited 384 kbps</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,500,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,520,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    Unlimited</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">71

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="37%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Fees for Usage</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>in Excess of</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="center" nowrap><B>Fees for Usage in Speedy</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Monthly</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Monthly</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="center" nowrap><B>High Speed ADSL Internet Access</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Activation Fee</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Monthly Fee</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Usage&nbsp;Allowance</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Allowance</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Rp.)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Rp.)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Rp.)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Limited 384 kbps</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>200,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>300,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>500 MB</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,200/MB</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Limited 384 kbps</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>200,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>450,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.0 GB</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,200/MB</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Limited 512 kbps</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>200,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>800,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.0 GB</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,200/MB</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unlimited 384 kbps</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,500,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,800,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>Unlimited</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Provides access only to the Internet service provider&#146;s
    node and does not include Internet access. The subscriber is
    responsible for obtaining Internet access with an Internet
    service provider.</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Depending on the Internet service provider plan.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tariffs for Other Services</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The amount of the tariffs for telephony and other multimedia
services are determined by the service provider by taking into
account the expenditures and market price. The Government only
determines the tariff formula for basic telephony services,
while there is no stipulation for the tariff of other services.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tariffs for Interconnection and
Access</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of the date of this Annual Report, the Government establishes
the percentage of tariffs to be received by each operator in
respect of calls that transit multiple networks. The
Telecommunications Law and Government
Regulation&nbsp;No.&nbsp;52 of 2000 provides for the
implementation of a new policy to replace the current revenue
sharing policy. On February&nbsp;8, 2006, the MoCI issued
Regulation&nbsp;No.&nbsp;8/2006, which mandates the new
cost-based interconnection tariff scheme for all
telecommunications network and services operators. For more
information about the scheme, see Item&nbsp;4. &#147;Information
on the Company&nbsp;&#151; B.&nbsp;Business Overview&nbsp;&#151;
Regulations&nbsp;&#151; Interconnection&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interconnection with Fixed line
Network</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Government&#146;s National Fundamental Technical Plan set
forth in Decree&nbsp;4 of 2001, as amended by Decree&nbsp;28 of
2004 and MoCI Regulation&nbsp;No.&nbsp;6/2005, sets out the
technical requirements, routing plans and numbering plans for
interconnection of the networks of various telecommunications
operators among themselves and with TELKOM&#146;s fixed line
network. Under the National Fundamental Technical Plan, all
operators are permitted to interconnect with TELKOM&#146;s fixed
line network for access thereto and to other networks, such as
international gateways and the networks of other cellular
operators. In addition, cellular operators may interconnect
directly with other networks without connecting to TELKOM&#146;s
fixed line network. As of the date of this Annual Report, the
fees for interconnection within TELKOM&#146;s fixed line network
are set forth in Decree No.&nbsp;506/1997, Decree
No.&nbsp;46/1998, Decree No.&nbsp;37/1999 and Decree
No.&nbsp;30/2000. These interconnection fees are expected to be
adjusted when
<FONT style="white-space: nowrap">cost-based</FONT>
interconnection fees are implemented pursuant to MoCI
Regulation&nbsp;No.&nbsp;8/2006.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Local Fixed line Interconnection with Indosat. Indosat launched
its CDMA fixed wireless access service under the brand name
&#147;StarOne&#148; in Surabaya on May&nbsp;29, 2004 and in
Jakarta on July&nbsp;25, 2004, thereby creating a &#147;duopoly
system&#148; in Indonesia&#146;s fixed line domestic
telecommunications market. Based on the interconnection
agreement between TELKOM and Indosat for interconnection of
local and domestic long distance calls, dated September&nbsp;23,
2005, the operator of the network on which the calls terminate
receives an agreed amount per minute.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Other Fixed Wireless Interconnection. Fixed wireless networks
may interconnect to TELKOM&#146;s fixed line network at
TELKOM&#146;s gateway. As of the date of this Annual Report,
other than TELKOM and Indosat, PT&nbsp;Bakrie Telecom (formerly
Ratelindo) also operates a fixed wireless network in
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
Indonesia. The fixed wireless interconnection between TELKOM and
PT&nbsp;Bakrie Telecom is currently based on the most recent
interconnection agreement signed in 2005. Pursuant to the
agreement, for interconnection of local calls, the operator of
the network on which the calls terminate receives an agreed
amount per minute. For local calls originating on PT&nbsp;Bakrie
Telecom&#146;s network and terminating on a cellular network and
vice versa which transit through TELKOM&#146;s fixed line
network, TELKOM receives an agreed percentage of the prevailing
tariff for local calls. For domestic
<FONT style="white-space: nowrap">long-distance</FONT> calls
that originate on TELKOM&#146;s fixed line network and terminate
on PT&nbsp;Bakrie Telecom&#146;s network, PT&nbsp;Bakrie Telecom
receives an agreed amount per minute. For domestic long-distance
calls that originate on PT&nbsp;Bakrie Telecom&#146;s fixed line
network and terminate on TELKOM&#146;s network and for transit
<FONT style="white-space: nowrap">long-distance</FONT> calls
through TELKOM&#146;s fixed line network, TELKOM receives an
agreed percentage of the prevailing
<FONT style="white-space: nowrap">long-distance</FONT> tariff.
In addition, PT&nbsp;Bakrie Telecom receives a certain fixed
amount for each minute of incoming and outgoing international
calls to and from PT&nbsp;Bakrie Telecom that transit through
TELKOM&#146;s fixed line network and use TELKOM&#146;s IDD
service. It also receives 25% of the prevailing interconnection
tariff of incoming and outgoing international calls that transit
through TELKOM&#146;s fixed line network but use Indosat&#146;s
IDD service.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Other Fixed Wireline Interconnection. Since September&nbsp;1,
1998, TELKOM has been receiving a share of the tariffs from
Batam Bintan Telekomunikasi (&#147;BBT&#148;), which is a local
operator with a special coverage area on Batam Island, for each
successful call that transits or terminates on TELKOM&#146;s
fixed line network. Under the interconnection agreement, for
local interconnection calls, revenues are shared on a
<FONT style="white-space: nowrap">&#147;sender-keeps-all&#148;</FONT>
basis. For local calls originating on BBT&#146;s network and
terminating on a cellular network and vice versa which transit
through TELKOM&#146;s fixed line network, TELKOM receives an
agreed percentage of the prevailing tariff for local calls. For
interconnection of DLD calls, the operator of the network on
which the calls terminate or transit receives an agreed
percentage of the prevailing
<FONT style="white-space: nowrap">long-distance</FONT> tariff.
In addition, BBT receives a certain fixed amount for each minute
of incoming and outgoing international calls from and to BBT
that transit through TELKOM&#146;s fixed line network and use
TELKOM&#146;s IDD service and 50% of the prevailing
interconnection tariff for incoming and outgoing international
calls that transit through TELKOM&#146;s fixed line network and
use Indosat&#146;s IDD service.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cellular Interconnection</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In respect of local interconnection calls, including transit
calls, between a cellular network and TELKOM&#146;s fixed line
network, TELKOM receives 50% of the prevailing
<FONT style="white-space: nowrap">fixed-line</FONT> usage tariff
for local pulse. For local calls from TELKOM&#146;s fixed line
network to a cellular network, TELKOM charges its subscribers
the applicable local call tariff plus an airtime charge, and
pays the cellular operator the airtime charge. For local calls
between cellular telecommunications networks, the originating
cellular operator pays the terminating cellular operator air
time charges.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The current Interconnection Decree, effective April&nbsp;1,
1998, assumes that it is possible for
<FONT style="white-space: nowrap">long-distance</FONT> calls to
be carried by more than one network. Pursuant to the
Interconnection Decree, for DLD calls which originate on
TELKOM&#146;s fixed line network, TELKOM is entitled to retain a
portion of the prevailing DLD tariff, which ranges from 40% of
the tariff in cases where the entire DLD portion is carried by a
cellular operator up to 85% of the tariff in cases where the
entire DLD portion is carried by TELKOM&#146;s fixed line
network. For DLD calls that originate from a cellular
subscriber, TELKOM is entitled to retain a portion of the
prevailing DLD tariff, which ranges from 25% of the tariff in
cases where the call originates from a cellular subscriber,
transits through TELKOM&#146;s fixed line network and terminates
on another cellular subscriber with the entire DLD portion
carried by a cellular operator, up to 85% of the tariff in cases
where the entire DLD portion is carried by TELKOM&#146;s fixed
line network and terminates on TELKOM&#146;s fixed line network.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;International
Interconnection</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Interconnection on TELKOM&#146;s domestic fixed line network for
international calls consists of access charges and usage
charges. The following table sets forth the current
international interconnection tariff, effective as of
December&nbsp;1, 1998, for IDD calls which are routed through
Indosat&#146;s international
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">73

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
gateways and which originate, transit or terminate on
TELKOM&#146;s domestic fixed line network and Telkomsel&#146;s
cellular network, pursuant to Ministerial Decree No.&nbsp;37 of
1999:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="72%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="center" nowrap><B>Description</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Tariff</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Access Charge</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>Rp.850/successful call</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Usage Charge</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>Rp.550/paid minute</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, since June 2004, TELKOM has provided IDD services.
As of the date of this Annual Report, TELKOM&#146;s IDD service
can be accessed by subscribers of all telecommunication
operators in Indonesia. Interconnection and access charges for
originating calls using TELKOM&#146;s IDD service or terminating
incoming international calls routed through TELKOM&#146;s
international voice telecommunications gateway are negotiated
with each respective domestic operator.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Satellite Phone
Interconnection</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Since the fourth quarter of 2001, TELKOM has been receiving a
share of revenues arising from interconnection transactions with
PSN, a national satellite operator. Under the agreement, in
respect of the interconnection calls between TELKOM and PSN,
TELKOM receives Rp.800 per minute for network charges and an
additional Rp.300 per minute origination fee if the call
originates from TELKOM&#146;s fixed line network.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;VoIP Interconnection</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Previously, MoC Decree No.&nbsp;23/2002 provided that access
charges and network lease charges for the provision of VoIP
services were to be agreed between network operators and VoIP
operators. On March&nbsp;11, 2004, the MoC issued Decree
No.&nbsp;31/2004, which stated that interconnection charges for
VoIP were to be fixed by the MoC. As of the date of this Annual
Report, the MoCI, to which telecommunications regulatory
responsibility was transferred in February 2005, has not yet
determined what the new VoIP interconnection charges will be.
Until such time as the new charges are fixed, TELKOM will
continue to receive connection fees for calls that originate or
terminate on TELKOM&#146;s fixed line network at agreed fixed
amounts per minute.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Trademarks, Copyrights and Patents</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM has a number of registered intellectual property rights
consisting of trademarks and copyrights. TELKOM has registered
with the Directorate General of Intellectual Property Rights of
the Ministry of Justice and Human Rights of the Republic of
Indonesia (i)&nbsp;trademarks for its corporate name, logo and
certain services including the names of TELKOM&#146;s products
and (ii)&nbsp;copyrights of books and artworks. These
intellectual property rights are important to TELKOM&#146;s
business.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Business and Organizational
Structure</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Information on Subsidiaries and Associated Companies</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subsidiaries</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, TELKOM had interests in nine
consolidated subsidiaries and six unconsolidated associated
companies. The business activities of the consolidated
subsidiaries (as further described below) are described as part
of TELKOM&#146;s business in this
Form&nbsp;<FONT style="white-space: nowrap">20-F,</FONT> as well
as in Note&nbsp;1c to the consolidated financial statements. For
a description of the activities of TELKOM&#146;s unconsolidated
associated companies, please see &#147;Unconsolidated Associated
Companies&#148; below and Note&nbsp;11 to the consolidated
financial statements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth TELKOM&#146;s direct ownership
interest in companies as of December&nbsp;31, 2005.
TELKOM&#146;s ownership interests in associated companies may be
increased or diluted as a result of TELKOM&#146;s planned
restructuring of its legal ownership interests in these
companies to focus on phone, mobile and multimedia businesses.
In January 2006, TELKOM&#146;s subsidiary, PT&nbsp;Multimedia
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
Nusantara (&#147;Metra&#148;) together with PT&nbsp;Mekar Prana
Indah (owned by Dana Pensiun Bank Indonesia (Bank
Indonesia&#146;s Pension Fund) and Yayasan Kesejahteraan
Karyawan Bank Indonesia) established a company called
PT&nbsp;Finnet Indonesia. The new company will provide
nationwide financial network services transmitting banking data
throughout Indonesia.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 8.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="38%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="38%">&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Legal</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Ownership&nbsp;(%)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>As of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="center" nowrap><B>Company</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Notes</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Business Operations</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Consolidated subsidiaries</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Fixed Phone:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT&nbsp;AriaWest International (&#147;AriaWest&#148;)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Fixed-phone (KSO-III West Java &#38; Banten)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT&nbsp;Dayamitra Telekomunikasi (&#147;Dayamitra&#148;)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Fixed-phone (KSO-VI Kalimantan)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT&nbsp;Pramindo Ikat Nusantara (&#147;Pramindo&#148;)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Fixed-phone (KSO-I Sumatera)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Cellular:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT&nbsp;Telekomunikasi Selular (&#147;Telkomsel&#148;)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    GSM cellular phone services</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Application, Content, Datacom:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT&nbsp;Multimedia Nusantara (&#147;Metra&#148;)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Multimedia, Pay TV</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT&nbsp;Infomedia Nusantara (&#147;Infomedia&#148;)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Telephone directory and other information services (electronic
    based business, call center and data segment)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT&nbsp;Indonusa Telemedia (&#147;Indonusa&#148;)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>96</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Interactive multimedia, Pay TV</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT&nbsp;Napsindo Primatel Internasional (&#147;Napsindo&#148;)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Network Access Point</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Property&nbsp;&#38; Construction:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT&nbsp;Graha Sarana Duta (&#147;GSD&#148;)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(9)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Real estate, construction and services</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Where TELKOM owns between 20% to 50%:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT&nbsp;Patra Telekomunikasi Indonesia (&#147;Patrakom&#148;)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>40.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(10)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    VSAT services</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT&nbsp;Citra Sari Makmur (&#147;CSM&#148;)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    VSAT and other telecommunications services</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT&nbsp;Pasifik Satelit Nusantara (&#147;PSN&#148;)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(12)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Satellite transponder &#38; communications</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Where TELKOM owns less than 20%:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT&nbsp;Mandara Selular Indonesia (&#147;MSI&#148;)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.33</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(13)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    NMT-450 cellular and CDMA services</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT&nbsp;Batam Bintan Telekomunikasi (&#147;BBT&#148;)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(14)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Fixed-phone (in Batam &#38; Bintan islands)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT&nbsp;Pembangunan Telekomunikasi Indonesia
    (&#147;Bangtelindo&#148;)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(15)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Telco network &#38; equipment maintenance</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bridge Mobile Pte. Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(16)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Mobile services (in the Asia Pacific)</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="1%"></TD>
    <TD width="3%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    TELKOM fully controlled AriaWest from July&nbsp;31, 2003, after
    acquiring 100% of AriaWest from PT.Aria Infotek (52.50%),
    MediaOne International I B.V. (35%) and The Asian Infrastructure
    Fund (12.50%). Pursuant to the Sale and Purchase Agreement dated
    September&nbsp;12, 2005, one share in AriaWest was transferred
    to Mr.&nbsp;John Welly in order to comply with the legal
    requirement that Indonesian limited liability companies should
    have more than one shareholder.</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    TELKOM controlled 100% of the shares of Dayamitra from
    December&nbsp;14, 2004, following the acquisition of 9.68%
    shares of Dayamitra from TM Communications (HK) Ltd., which
    increased TELKOM&#146;s ownership in Dayamitra from 90.32% to
    100%. One TELKOM&#146;s share in Dayamitra was transferred to
    Mr.&nbsp;Robby Rubama Sadeli in order to comply with the legal
    requirement that Indonesian limited liability companies be owned
    by more than one shareholder.</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    TELKOM and the shareholders of Pramindo signed a Conditional
    Sale and Purchase Agreement for the sale of the Pramindo shares
    on April&nbsp;19, 2002, pursuant to which TELKOM received 30% of
    the shares of Pramindo in August 2002 and additional 15% in
    September 2003 while the remaining 55% was to be transferred to
    TELKOM on December&nbsp;15, 2004. Although TELKOM only had 30%
    of the shares of Pramindo, TELKOM acquired control of Pramindo
    on August&nbsp;15, 2002 and accordingly, TELKOM consolidated
    100% of Pramindo from August&nbsp;15, 2002. TELKOM signed a
    short-term loan agreement with ABN AMRO Bank N.V. Jakarta in the
    amount of approximately US$130&nbsp;million on January&nbsp;29,
    2004 to finance the accelerated purchase of the remaining 55%.
    On March&nbsp;15, 2004, TELKOM used the loan proceeds to
    repurchase the promissory notes that were due on June&nbsp;15,
    2004, September&nbsp;15, 2004 and December&nbsp;15, 2004.
    Following this transaction, TELKOM owned 100% of Pramindo. One
    of TELKOM&#146;s shares in Pramindo was transferred to
    Mr.&nbsp;Adek Julianwar in order to comply with the legal
    requirement that Indonesian limited liability companies be owned
    by more than one shareholder.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">75

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="1%"></TD>
    <TD width="3%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(4)&nbsp;</TD>
    <TD align="left">
    Telkomsel was established in 1995 by TELKOM (51%) and
    PT&nbsp;Indosat Tbk (49%). Following various transactions and
    changes in ownership, Telkomsel is currently owned by TELKOM
    (65%) and Singapore Telecom Mobile Pte. Ltd. (35%).</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(5)&nbsp;</TD>
    <TD align="left">
    TELKOM increased its ownership in Metra on April&nbsp;8, 2003 to
    100% by acquiring 69% of the shares of Metra from
    PT&nbsp;Indocitra Grahabawana under a share-swap transaction.
    TELKOM intends to use Metra to operate multimedia services in
    line with TELKOM&#146;s strategy to focus on phone, mobile and
    multimedia services. Pursuant to a sale and purchase agreement
    dated September&nbsp;12, 2005, one share in Metra was
    transferred by TELKOM to Mr.&nbsp;John Welly in order to comply
    with the legal requirement that Indonesian limited liability
    companies be owned by more than one shareholder.</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(6)&nbsp;</TD>
    <TD align="left">
    Infomedia was established in 1984 by TELKOM (51%) and
    PT&nbsp;Elnusa (49%), a subsidiary of PERTAMINA&nbsp;&#151; an
    Indonesian state-owned oil company.</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(7)&nbsp;</TD>
    <TD align="left">
    On August&nbsp;8, 2003, TELKOM and PT&nbsp;Centralindo
    Pancasakti Cellular (&#147;CPSC&#148;) signed a share-swap
    agreement pursuant to which TELKOM received an additional 31% of
    the shares of Indonusa from CPSC. Following this transaction,
    TELKOM&#146;s ownership in Indonusa increased from 57% to 88%.
    Pursuant to an extraordinary general meeting of the shareholders
    of Indonusa on October&nbsp;29, 2003, all of the stockholders
    agreed to convert an additional Rp.13,500&nbsp;million of debt
    owed by Indonusa to TELKOM into newly issued shares of Indonusa.
    Following such conversion, TELKOM&#146;s ownership in Indonusa
    increased from 88% to 90%. As of December&nbsp;31, 2005, CPSC
    did not hold any shares in Indonusa. CPSC is not a major
    customer of TELKOM. In November 2005, TELKOM increased its
    ownership in Indonusa from 90% to 96% by acquiring 5.29% of the
    shares in Indonusa, owned by PT&nbsp;Megacell Media.</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(8)&nbsp;</TD>
    <TD align="left">
    TELKOM increased its ownership in Napsindo from 32% to 60% by
    acquiring 28% of the shares of Napsindo from PT&nbsp;Info Asia
    Sukses Mandiri (&#147;InfoAsia&#148;) on January&nbsp;28, 2003.</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(9)&nbsp;</TD>
    <TD align="left">
    TELKOM acquired 100% of GSD in April 2001 from Koperasi Mitra
    Duta and Dana Pensiun Bank Duta. TELKOM transferred one of such
    shares to Mr.&nbsp;Martono in order to comply with the legal
    requirement that Indonesian limited liability companies should
    be owned by more than one shareholder.</TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>(10)&nbsp;</TD>
    <TD align="left">
    On August&nbsp;26, 2005 TELKOM purchased a 10% stake in
    PT&nbsp;Patra Telekomunikasi Indonesia (&#147;Patrakom&#148;)
    from Indosat. As a result, TELKOM&#146;s ownership in Patrakom
    increased from 30% to 40%.</TD>
</TR>

<TR valign="top">
    <TD>(11)&nbsp;</TD>
    <TD align="left">
    CSM was established in 1986 by Mr.&nbsp;Subagio Wirjoatmodjo and
    Bell Atlantic Indonesia Inc. Currently, CSM is owned by
    PT&nbsp;Tigatra Media (38.29%), Media Trio (L)&nbsp;Inc.
    Malaysia (36.71%), and TELKOM (25%).</TD>
</TR>

<TR valign="top">
    <TD>(12)&nbsp;</TD>
    <TD align="left">
    As part of the agreement signed on August&nbsp;8, 2003 between
    TELKOM and CPSC, TELKOM was entitled to receive CPSC&#146;s
    21.12% interest in PSN within a period of one year from the date
    the agreement was signed. During this period, all of CPSC&#146;s
    rights in respect of the shares were granted to TELKOM. TELKOM
    received the shares of CPSC in PSN on August&nbsp;9, 2004,
    increasing its legal ownership interest in PSN to 43.69%. PSN
    and its creditors have consummated a debt-to-equity conversion,
    pursuant to which PSN issued 18,180,660 new shares to the
    creditors. The conversion has the effect of diluting the
    shareholding percentage of the existing shareholders of PSN,
    including TELKOM. In 2005, TELKOM&#146;s ownership interest in
    PSN was diluted to 35.5% as a result of the debt-to-equity
    conversion.</TD>
</TR>

<TR valign="top">
    <TD>(13)&nbsp;</TD>
    <TD align="left">
    In July 2003 and January 2004, MSI carried out a series of debt
    to equity conversions, resulting in a dilution of TELKOM&#146;s
    ownership interest from 25% to 6.4%. In December 2004 and May
    2005, MSI issued new shares to MSI&#146;s other shareholders,
    resulting in a further dilution of TELKOM&#146;s ownership
    interest to 1.33%. On January&nbsp;13, 2006, TELKOM sold its
    entire ownership interest in MSI to a third party, namely,
    Twinwood Venture Limited.</TD>
</TR>

<TR valign="top">
    <TD>(14)&nbsp;</TD>
    <TD align="left">
    BBT was established in 1996 by PT&nbsp;Batamindo Investment Co
    (95%) and TELKOM (5%). BBT provides fixed line services at
    Batamindo Industrial Park in Muka Kuning, Batam Island and at
    Bintan Beach International Resort and Bintan Industrial Estate
    in Bintan Island. There are special economic and tourist
    development zones on those islands.</TD>
</TR>

<TR valign="top">
    <TD>(15)&nbsp;</TD>
    <TD align="left">
    Bangtelindo was established in 1993 by TELKOM (15%),
    PT&nbsp;Indosat (15%), PT&nbsp;Inti (15%) and other shareholders
    (55%). Bangtelindo is currently owned by Dana Pensiun TELKOM
    (82%), TELKOM (3.18%) and other shareholders (14.82%).</TD>
</TR>

<TR valign="top">
    <TD>(16)&nbsp;</TD>
    <TD align="left">
    Bridge Mobile Pte. Ltd. (Singapore) was established in 2004 by
    Telkomsel (14.286%) and six other international mobile operators
    in the Asia-Pacific region. On April&nbsp;14, 2005,
    Telkomsel&#146;s ownership interest was diluted to 12.5%
    following the issuance of new shares by Bridge Mobile Pte. Ltd.
    to a new shareholder, namely, Hong Kong CSL Limited.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Unconsolidated Associated Companies</I></B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>PT&nbsp;Patra Telekomunikasi Indonesia
    (&#147;Patrakom&#148;)</I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Patrakom was established in September 1995 and as of the date of
this Annual Report is owned by TELKOM (40%), PT&nbsp;Elnusa
(40%) and PT&nbsp;Tanjung Mustika (20%). Patrakom provides
satellite communication (VSAT) and related services and
facilities to companies in various industries.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PT&nbsp;Citra Sari Makmur
(&#147;CSM&#148;)</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
CSM was established in February 1986 and as of the date of this
Annual Report is owned by TELKOM (25%), PT&nbsp;Tigatra Media
(38.29%) and Media Trio (L)&nbsp;Inc. Malaysia (36.71%). CSM is
incorporated in Indonesia and provides telecommunications
services relating to VSAT applications and other
telecommunications technology and related facilities.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PT&nbsp;Pasifik Satelit
Nusantara (&#147;PSN&#148;)</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
PSN was established in July 1991 and as of the date of this
Annual Report, PSN is legally owned by TELKOM (35.50%),
Skaisnetindo Teknotama (2.90%), Hughes Space and Communications
International (5.88%), Telesat Canada (5.88%), Bank of New York
(15.81%) and others (34.03%) (including holders of American
Depositary Shares of PSN who own 19.46% of PSN). PSN provides
satellite leasing and satellite-based communication services to
countries within the Asia Pacific region. PSN conducted an
initial public offering of its common stock and listing on
NASDAQ in June 1996, but was delisted on November&nbsp;6, 2001
due to its failure to meet certain NASDAQ National Market
Listing requirements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2001, TELKOM&#146;s share of losses in
PSN has exceeded the carrying amount of the investment.
Accordingly, the investment has been reduced to zero.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As part of the agreement signed on August&nbsp;8, 2003 between
TELKOM and CPSC, TELKOM was entitled to receive CPSC&#146;s
21.12% interest in PSN within a period of one year from the date
the agreement was signed. During this period, all of CPSC&#146;s
rights in respect of the shares were granted to TELKOM. TELKOM
received the shares of CPSC in PSN on August&nbsp;9, 2004,
increasing its legal ownership interest in PSN to 43.69%. In
2005, TELKOM&#146;s ownership interest in PSN was diluted to
35.5% as a result of the debt-to-equity conversion by PSN.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of the date of this Annual Report, TELKOM is evaluating the
costs and benefits associated with an increase of its ownership
in PSN to develop a retail satellite based service such as
cellular via satellite and to support the government program for
providing telecommunications lines to remote areas.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>PT&nbsp;Mandara Selular Indonesia (&#147;MSI&#148;),
    (previously referred to as PT&nbsp;Mobile Selular Indonesia
    (&#147;Mobisel&#148;)</I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
MSI was established on November&nbsp;30, 1995 by TELKOM,
TELKOM&#146;s Pension Fund and PT&nbsp;Rajasa Hazanah Perkasa
(&#147;Rajasa&#148;).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2002, the value of investment has been
reduced to zero because TELKOM&#146;s share of loss exceeded the
carrying amount of the investment in MSI.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of the date of this Annual Report, MSI provides NMT-450
services formerly provided by TELKOM and Rajasa pursuant to a
PBH in Java, Bali, Lombok, Sumatera and Lampung. Currently,
there is no plan to expand
<FONT style="white-space: nowrap">NMT-450</FONT> services as it
is considered to be obsolete. Mobisel also launched a CDMA-based
network in Lampung in mid-February 2004. In July 2003 and
January 2004, MSI carried out a series of debt to equity
conversions, resulting in a dilution of TELKOM&#146;s ownership
interest from 25% to 6.4%. In December 2004 and May 2005, MSI
issued new shares to MSI&#146;s other shareholders, resulting in
a further dilution of TELKOM&#146;s ownership interest to 1.33%.
On January&nbsp;13, 2006, TELKOM sold its entire ownership
interest in MSI to a third party, namely, Twinwood Venture
Limited. The resulting gain was not significant to TELKOM&#146;s
consolidated statement of income.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PT&nbsp;Batam Bintan
Telekomunikasi (&#147;BBT&#148;)</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
BBT was established in June 1996 and as of the date of this
Annual Report is owned by TELKOM (5%) and Batamindo Investment
(95%). BBT provides fixed 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 which are special economic and tourist
development zones on those islands. As at December&nbsp;31,
2005, BBT had approximately 2,715 subscribers.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PT&nbsp;Pembangunan
Telekomunikasi Indonesia (&#147;Bangtelindo&#148;)</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Bangtelindo was established in December 1993 in Indonesia. The
shareholders of Bangtelindo are TELKOM (3.18%), TELKOM&#146;s
Pension Fund (82%) and others (14.82%). Bangtelindo&#146;s
primary
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
business is providing telecommunications network maintenance
services and consultancy services on the installation and
maintenance of telecommunications facilities.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>Bridge Mobile Pte. Ltd.</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On November&nbsp;3, 2004, Telkomsel together with six other
international mobile operators in the Asia Pacific established
Bridge Mobile Pte. Ltd. (Singapore), a company that is engaged
in providing regional mobile services in the Asia Pacific.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telkomsel contributed US$1.0&nbsp;million (Rp.9.3&nbsp;billion)
which represented a 14.286% ownership interest. In 2005,
TELKOM&#146;s ownership interest in Bridge Mobile Pte. Ltd. was
diluted to 12.5% as a result of the issuance of shares by Bridge
Mobile Pte. Ltd. to a new shareholder, namely, Hong Kong CSL
Limited.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>D.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property, Plants and
Equipment</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Except for ownership rights granted to individuals in Indonesia,
the title to land rests with the Indonesian State under the
Basic Agrarian Law No.&nbsp;5/1960. Land use is accomplished
through landrights, notably rights to build (Hak Guna Bangunan)
and rights to use (Hak Pakai), whereby the holder of the
landright enjoys the full use of the land for a stated period of
time, subject to renewal and extensions. In most instances, the
landrights are freely tradeable and may be pledged as security
under loan agreements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, TELKOM, excluding its
subsidiaries, had land use rights to approximately 1,173
properties. TELKOM holds registered rights to build for the
majority of its real property. Pursuant to Government
Regulation&nbsp;No.&nbsp;40 of 1996, the maximum initial periods
for rights to build are 30&nbsp;years and may be extended for an
additional 20&nbsp;years. Most of TELKOM&#146;s real property is
used to host equipment for the provision of telecommunications
operations including exchanges, transmission stations and
microwave radio equipment. None of TELKOM&#146;s properties are
mortgaged. TELKOM is not aware of any environmental issues which
may affect the utilization of its properties.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='109'></A>
</DIV>

<!-- link1 "ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS" -->

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>ITEM 5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;OPERATING AND FINANCIAL
REVIEW AND PROSPECTS</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following discussion and analysis should be read in
conjunction with the consolidated financial statements of TELKOM
for the three years ended December&nbsp;31, 2003, 2004 and 2005
included elsewhere in this Annual Report. These consolidated
financial statements were prepared in accordance with Indonesian
GAAP, which differs in certain significant respects from
U.S.&nbsp;GAAP. See Note&nbsp;54 to the consolidated financial
statements for our reconciliation to U.S.&nbsp;GAAP.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating Results</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Overview</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM is the principal provider of local and domestic
telecommunications services in Indonesia, as well as the leading
provider of mobile cellular services through its majority owned
subsidiary Telkomsel. TELKOM&#146;s objective is to become a
leading full service and network provider in Indonesia through
the provision of a wide range of communications services. As of
December&nbsp;31, 2005, TELKOM had approximately
12.7&nbsp;million fixed lines in service (Fixed Wireline and
Fixed Wireless) and Telkomsel had approximately
24.3&nbsp;million mobile cellular subscribers. TELKOM also
provides a wide range of other communication services, including
telephone network interconnection services, multimedia, data and
Internet communication-related services, satellite transponder
leasing, leased line, intelligent network and related services,
cable television and VoIP services.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM believes that its operating results in 2003 were
significantly affected by:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the increase in TELKOM&#146;s interconnection revenues;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the continued growth of the Indonesian mobile cellular market
    and the corresponding increase in Telkomsel&#146;s revenues;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the growth in TELKOM&#146;s revenues from interconnection, data
    and Internet services;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the acquisition and subsequent consolidation of AriaWest
    (KSO&nbsp;III)&nbsp;in July 2003;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the continuation of TELKOM&#146;s early retirement program; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    increased depreciation expense and operations and maintenance
    expenses associated with Telkomsel&#146;s expansion of its
    network capacity.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telkom believes that its operating results in 2004 were
significantly affected by:
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the general economic situation in Indonesia, particularly the
    depreciation of the Rupiah during 2004;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    an increase in fixed line tariffs by 9%;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    increased competition among cellular operators, particularly in
    the prepaid market;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the growth in the Indonesian cellular market and the
    corresponding increase in Telkomsel&#146;s revenues;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the growth in TELKOM&#146;s revenues from interconnection, data
    and Internet services;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the amendment of KSO agreement with MGTI on January&nbsp;20,
    2004 which resulted in TELKOM obtaining the legal right to
    control financial and operating decisions of KSO&nbsp;IV, and
    subsequent consolidation of KSO&nbsp;IV; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    increased depreciation expense and operations and maintenance
    expenses associated with Telkomsel&#146;s expansion of its
    network capacity and an increase in TELKOM&#146;s fixed assets
    due to TELKOM&#146;s aggressive deployment of fixed wireless.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM believes that the factors that have materially affected
TELKOM, as well as the environment in which it operates, during
2005 were:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the increase in fixed lines, particularly in fixed wireless
    lines;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    increased competition among cellular operators, particularly in
    the prepaid market;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the growth in the Indonesian cellular market and the
    corresponding increase in Telkomsel&#146;s revenues;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    increased demand for data and Internet services, particularly in
    SMS, broadband Internet, and data communication network services
    using frame relay, SMS and IP&nbsp;VPN;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    increased operations and maintenance expenses associated with
    Telkomsel&#146;s expansion of its network capacity and an
    increase in TELKOM&#146;s fixed assets due to TELKOM&#146;s
    aggressive deployment of fixed wireless;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    increased depreciation expense, primarily due to
    Telkomsel&#146;s expansion of its network capacity, increase in
    TELKOM&#146;s fixed wireless assets and change in TELKOM&#146;s
    estimate of remaining useful lives for certain cable network
    facilities (WLL and Approach Link equipment) and certain Jakarta
    and West Java transmission and installation equipment (BSS
    equipment); and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    write-down of assets and loss on procurement commitments due to
    the Government&#146;s decision to allocate the 1900 MHz
    frequency spectrum for exclusive use in 3G services commencing
    at the end of 2007 which resulted in TELKOM no longer being able
    to use its BSS equipment operating in the 1900 MHz in Jakarta
    and West Java areas commencing at the end of 2007.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">79

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM&#146;s operating results, discussed below under
&#147;Results of Operations&#148;, for the three-year period
from 2003 through 2005 reflected significant growth in operating
revenues, particularly in the fixed line, cellular,
interconnection and data and Internet businesses. The growth in
operating revenues in the fixed line business reflected both
increased fixed lines in service and the acquisition and
subsequent consolidation of KSO&nbsp;IV in January 2004 and
AriaWest (KSO&nbsp;III) in July&nbsp;2003. The growth of
revenues in the cellular business primarily reflected growth in
the number of Telkomsel&#146;s cellular subscribers. The growth
of revenues in data and Internet services primarily reflected
the increase in SMS traffic from Telkomsel subscribers and
increased usage of TELKOM&#146;s multimedia services.
Interconnection revenues have also increased as a result of
higher interconnection charges received from mobile cellular
operators and from the launch of its international long-distance
services under the
<FONT style="white-space: nowrap">&#147;TIC-007&#148;</FONT>
brand in June&nbsp;2004. KSO revenues have declined in the
three-year period from 2003 through 2005 due to the acquisitions
of KSO&nbsp;III and IV discussed above.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM&#146;s operating results for the three-year period from
2003 to 2005 also reflected significant growth in operating
expenses. From 2003 to 2004, the growth of operating expenses
was primarily driven by an increase in depreciation expense,
general and administrative expenses, personnel expenses and
operations, maintenance and telecommunications services
expenses. The increase in depreciation expense and operations,
maintenance and telecommunications services expenses in 2004 was
principally due to expenses arising from Telkomsel&#146;s
expansion of its network capacity and an increase in
TELKOM&#146;s fixed assets due to its deployment of fixed
wireless. General and administrative expenses increased in 2004
mainly due to an increase in amortization of goodwill and other
intangible assets resulting from the acquisitions of AriaWest in
July&nbsp;2003, KSO&nbsp;IV and the remaining 9.68% interest in
Dayamitra and increases in training, education and recruitment
expenses and collection expenses. Personnel expenses grew in
2004 primarily due to a significant increases in salaries and
related benefits and vacation pay, incentives and other benefits
and increase in net periodic pension cost. From 2004 to 2005,
the growth of operating expenses was primarily driven by
write-down of assets, and an increase in depreciation expense,
personnel expenses and operations, maintenance and
telecommunications services expenses.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In August 2005, the Government decided to set aside the 1900 MHz
frequency spectrum for the exclusive use in 3G services and 800
MHz frequency spectrum for the exclusive use in the CDMA-based
technology network commencing at the end of&nbsp;2007. As a
result, TELKOM&#146;s BSS equipment in Jakarta and West Java
areas, which operates in 1900 MHz and forms an integral part of
the fixed wireless transmission system of TELKOM, can no longer
be used commencing at the end of 2007. Following the
Government&#146;s decision, TELKOM reviewed the recoverable
amount of cash-generating unit to which the affected fixed
wireless asset belongs and recognized a write-down of
Rp.616.8&nbsp;billion relating to this equipment. In addition,
TELKOM changed its estimate of the remaining useful lives for
the Jakarta and West Java BSS equipment and depreciates the
remaining net book value of these assets through June&nbsp;30,
2007, the date when all of TELKOM&#146;s 1900 MHz BSS equipment
are expected to be completely replaced with the 800 MHz BSS
equipment. This change in estimate increased depreciation
expense by Rp.159.0&nbsp;billion in 2005. In addition, TELKOM
recognized a loss relating to non-cancellable contracts for
procurement of the 1900 MHz transmission installation and
equipment in Jakarta and West Java areas amounting to
Rp.79.4&nbsp;billion in 2005. Due to the Government&#146;s
decision issued in the first quarter of 2005 to rearrange the
frequency spectra utilized by the telecommunication industry
which resulted in TELKOM not being able to utilize certain
frequency spectra TELKOM currently uses to support fixed
wireline cable network commencing at the end of 2006, certain of
TELKOM&#146;s cable network facilities, which comprise primarily
of WLL and approach link equipment operating in the affected
frequency spectra, can no longer be used commencing at the end
of 2006. Accordingly, TELKOM shortened its estimate of the
remaining useful lives for WLL and approach link equipment in
the first quarter of 2005 and began depreciating the then
remaining net book value of those assets through
December&nbsp;31, 2006. This change in estimate increased
depreciation expense by Rp.471.2&nbsp;billion in 2005. The
increase in depreciation expense in 2005 was also due to an
expansion of Telkomsel&#146;s cellular network and an increase
in deployment of fixed wireless network.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The increase in operations, maintenance and telecommunications
services expenses in 2005 was primarily due to a network
expansion by TELKOM and Telkomsel and an incurrence of USO
expenses pursuant to MOC Regulation&nbsp;No.&nbsp;15/2005, which
requires all telecommunications network and services operators
to pay 0.75% of their gross operating revenues to the Government
starting January&nbsp;1, 2005. Personnel expenses grew in 2005
primarily due to a significant increase in salaries and related
benefits, vacation pay incentives and other benefits and
employee income tax.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2004, TELKOM recognized loss on foreign exchange of
Rp.1,220.8&nbsp;billion due to the depreciation of the Rupiah
during 2004, primarily related to foreign exchange loss on its
US Dollar borrowings. In 2005, TELKOM recognized loss on foreign
exchange of Rp.516.8&nbsp;billion primarily due to foreign
exchange losses on its US&nbsp;Dollar borrowings. The loss on
foreign exchange was lower in 2005 due to the relatively modest
depreciation of the Rupiah during 2005, compared to 2004, and
decrease in borrowings denominated in foreign currencies.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Economic Situation in
Indonesia</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM was significantly affected by a severe economic crisis
that Indonesia and other Asian countries experienced beginning
in the second half of 1997. As a result of the Asian financial
crisis, the Rupiah depreciated significantly and experienced
periods of significant volatility. From August 1997 to mid 1998,
the month-end value of the Rupiah relative to the US Dollar
declined from approximately Rp.2,600 per US Dollar to a low of
approximately Rp.15,000 per US&nbsp;Dollar. In the three-year
period from 2003 through 2005, the Rupiah experienced the
following (based on Bank Indonesia&#146;s middle exchange rate):
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    in 2003, an appreciation from Rp.8,940 per US&nbsp;Dollar at
    December&nbsp;31, 2002 to Rp.8,465 per US&nbsp;Dollar at
    December&nbsp;31, 2003;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    in 2004, a depreciation from Rp.8,465 per US Dollar at
    December&nbsp;31, 2003 to Rp.9,290 per US&nbsp;Dollar at
    December&nbsp;31, 2004;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    in 2005, a depreciation from Rp.9,290 per US Dollar at
    December&nbsp;31, 2004 to Rp.9,830 per US&nbsp;Dollar at
    December&nbsp;31, 2005;</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of March&nbsp;31, 2006, Bank Indonesia&#146;s middle exchange
rate was Rp.9,075 to US$1.00.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Indonesia also experienced higher rates of inflation and
interest rates from the second half of 1997 through 2002. For
the years ended December&nbsp;31, 2003, 2004 and 2005, the
annual inflation rate was 5.1%, 6.4% and 17.1%, respectively.
The interest rate on a one-month Bank Indonesia Certificate
(SBI) as of December&nbsp;31, 2003, 2004 and 2005 was 8.3%, 7.4%
and 12.8%, respectively. See Item&nbsp;3. &#147;Key
Information&nbsp;&#151; D. Risk Factors&nbsp;&#151; Risks
relating to Indonesia&nbsp;&#151; Declines or volatility in
Indonesia&#146;s currency exchange rates can have a material
adverse impact on business activity in Indonesia&#148; and
Item&nbsp;3. &#147;Key Information&nbsp;&#151; A.&nbsp;Selected
Financial Data&nbsp;&#151; Exchange Rate Information&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Limited Increases in
Tariffs</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Since 1995, Indonesian law has provided for domestic fixed line
tariff adjustments to be determined by a price cap formula that
calculates the maximum total percentage increase in tariffs for
a particular year. The maximum increase equals the Indonesian
inflation rate (referred to by the Government as the Consumer
Price Index (&#147;CPI&#148;)) typically for the last two years,
as published by the Indonesian Central Bureau of Statistics,
minus an efficiency factor
(the&nbsp;<FONT style="white-space: nowrap">&#147;X-factor&#148;),</FONT>
which the Government determines by taking into consideration
certain factors including improvements in the cost efficiency of
the services resulting from technological improvements, the
interests of affected telecommunications operators and the
purchasing power of customers. Although the regulations provide
for an annual tariff review and adjustment, economic conditions
in Indonesia led to tariffs being frozen in 2003. See
Item&nbsp;3. &#147;Key Information&nbsp;&#151; D. Risk
Factors&nbsp;&#151; Risk Relating to TELKOM and its
subsidiaries&nbsp;&#151; TELKOM operates in a legal and
regulatory environment that is undergoing significant reforms
and such reforms may adversely affect TELKOM&#146;s
business&#148;. For details of the increase and rebalanc-
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
ing of tariffs by the Government, see Item&nbsp;4.
&#147;Information on the Company&nbsp;&#151; B.&nbsp;Business
Overview&nbsp;&#151; Competition&nbsp;&#151; Tariffs for the
Provision of Telecommunication Services&nbsp;&#151; Fixed
Wireline Tariffs&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Growth of Indonesian
Cellular Market and Increase in Telkomsel&#146;s Revenues</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Indonesian cellular market has increased significantly in
recent years. Telkomsel experienced a 43.1% growth in net
operating revenues from 2004 to 2005, due to a 49.0% growth in
its total number of cellular subscribers, as a result of the
increased usage of mobile cellular phones in Indonesia and a
corresponding increase in revenues from air time charges.
Telkomsel experienced a 32.3% growth in net operating revenues
from 2003 to 2004, due to a 69.8% growth in its total number of
cellular subscribers. Telkomsel&#146;s revenues from cellular
phone services (voice) accounted for approximately 34.9% of
TELKOM&#146;s consolidated total operating revenues for the year
ended December&nbsp;31, 2005, compared to 30.7% for the year
ended December&nbsp;31, 2004 and 31.2% for the year ended
December&nbsp;31, 2003.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Due to the growth in the cellular market, competition has
increased among cellular operators, particularly in the prepaid
market. These cellular operators also compete to a lesser extent
with fixed wireless operators, with fixed wireless lines in
service increasing significantly in 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase in TELKOM&#146;s
Interconnection Revenues</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM&#146;s interconnection revenues accounted for
approximately 18.5% of TELKOM&#146;s consolidated operating
revenues for the year ended December&nbsp;31, 2005, compared to
18.2% for the year ended December&nbsp;31, 2004 and 15.3% for
the year ended December&nbsp;31, 2003. From 2004 to 2005, the
25.1% increase in interconnection revenues was primarily due to
a 24.9% increase in net interconnection charges paid to TELKOM
by mobile cellular operators to Rp.6,685.1&nbsp;billion and a
33.3% increase in interconnection revenue from international
calls to Rp.854.8&nbsp;billion. TELKOM recognizes these
international long-distance revenues as interconnection
revenues. From 2003 to 2004, the increase in interconnection
revenues was primarily due to a 36.9% increase in net
interconnection charges paid to TELKOM by mobile cellular
operators to Rp.5,351.6&nbsp;billion and a 248.3% increase in
interconnection revenues from international calls to
Rp.641.2&nbsp;billion. On February&nbsp;8, 2006, the MoCI issued
Regulation&nbsp;No.&nbsp;8/2006, which mandates a new cost-based
interconnection tariff scheme for all telecommunications network
and service operators and will become effective on
January&nbsp;1, 2007. Under the new scheme, the operator of the
network on which calls terminate will determine the
interconnection charge to be received by it based on a formula
to be mandated by the Government, which will require the
operators to charge for calls based on the costs of carrying
such calls. For further information on the interconnection
scheme, see Item&nbsp;4. &#147;Information on the
Company&nbsp;&#151; B.&nbsp;Business Overview&nbsp;&#151;
Regulations&nbsp;&#151; Interconnection&#148;; and Item&nbsp;3.
&#147;Key Information&#148;&nbsp;&#151; D. Risk
Factors&nbsp;&#151; Risks relating to TELKOM and its
subsidiaries&nbsp;&#151; TELKOM operates in a legal and
regulatory environment that is undergoing significant reforms
and such reforms may adversely affect TELKOM&#146;s
business&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase in TELKOM&#146;s
Data and Internet Revenues</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Data and Internet revenues accounted for approximately 16.6% of
TELKOM&#146;s consolidated operating revenues for the year ended
December&nbsp;31, 2005, compared to 14.2% for the year ended
December&nbsp;31, 2004 and 11.5% for the year ended
December&nbsp;31, 2003. TELKOM&#146;s revenues from its data and
Internet services increased by 44.2% from 2004 to 2005 and by
54.7% from 2003 to 2004. The increase in data and Internet
revenues in 2005 was primarily due to a 49.0% increase in
revenues generated from SMS services, a 69.2% increase in
revenues from data communication and a 28.2% increase in
revenues from internet connectivity. The increase in 2004 was
primarily due to a 61.6% increase in revenues generated from SMS
services and a 70.3% increase in revenues from Internet
connectivity services. From 2004 to 2005, revenues from VoIP
services decreased by 8.2% to Rp.292.7&nbsp;billion
(US$29.8&nbsp;million) due to a 27.8% decrease in total outgoing
international VoIP calls, as more TELKOM customers used
TELKOM&#146;S <FONT style="white-space: nowrap">TIC-007</FONT>
service rather than VoIP, which decrease was partially offset by
a 21.0% increase in total incoming (international termination)
VoIP traffic.
</DIV>

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<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Acquisition and
Consolidation of KSO IV and III</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM&#146;s operating revenues and expenses for the three-year
period from 2003 through 2005 have been affected by the
acquisition and subsequent consolidation of KSO&nbsp;IV in
January 2004 and the acquisition and subsequent consolidation of
AriaWest (KSO&nbsp;III)&nbsp;in July 2003. Prior to
consolidation of KSO&nbsp;IV and III, TELKOM received revenues
from these KSO regions in the form of guaranteed minimum monthly
payments and additional monthly revenue sharing payments from
the revenues of the KSO regions after payment of the minimum
monthly payments and certain operating expenses. TELKOM was not
directly allocated any of the operating expenses for the KSO
regions. See Item&nbsp;4. &#147;Information on the
Company&nbsp;&#151; B. Business Overview&nbsp;&#151; Joint
Operation Scheme.&#148; Upon consolidation, TELKOM no longer
receives the minimum monthly payments and revenue sharing
payments and instead consolidates all of the revenues and
expenses of such KSO regions on its books. As a result, KSO
revenues have declined in the three-year period from 2003
through 2005 due to the acquisitions of KSO&nbsp;IV and III
discussed above. Following these acquisitions, KSO&nbsp;VII is
the only remaining KSO region under the joint operation scheme.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In connection with the acquisition of KSO IV in January 2004,
TELKOM recognized the full amount of the liability for the
purchase price of approximately US$390.7&nbsp;million or
equivalent to Rp.3,285.4&nbsp;billion, which represents the
present value of fixed monthly payments (totaling
US$517.1&nbsp;million) to be paid to MGTI (the investor in
KSO&nbsp;IV)&nbsp;beginning in February 2004 through December
2010 using a discount rate of 8.3% plus direct costs of the
business combination. The allocation of the acquisition cost
consisted of Rp.2,377.1&nbsp;billion for property, plant and
equipment and Rp.908.2&nbsp;million for intangible assets. The
allocation of the acquisition cost was based on an independent
appraisal of fair values. Intangible assets identified from this
acquisition represent the right to operate the business in the
KSO area and the amount is being amortized over the remaining
term of the KSO agreement of 6.9&nbsp;years. As of
December&nbsp;31, 2005, the remaining monthly payments to be
made to MGTI, before unamortized discount, amounted to
US$393.3&nbsp;million (Rp.3,868.4&nbsp;billion) and is presented
in TELKOM&#146;s balance sheet as &#147;Liabilities of business
acquisitions.&#148;
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Write-down of Assets, Depreciation Expense, Loss on
    Procurement Commitments, and Operations Maintenance and
    Telecommunication Services Expenses</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM&#146;s depreciation expense and operations, maintenance
and telecommunication services expenses have increased
significantly during the three-year period from 2003 through
2005. These increases are primarily related to Telkomsel&#146;s
expansion of its network capacity due to the growth in its
subscriber base and an increase in TELKOM&#146;s fixed assets
due to deployment of fixed wireless. In particular, TELKOM began
an aggressive deployment of fixed wireless in KSO&nbsp;III and
KSO IV following TELKOM&#146;s acquisitions of KSO&nbsp;III in
July&nbsp;2003 and KSO&nbsp;IV in January 2004 and in 2005 alone
deployed 47&nbsp;units of Remote Access Servers to service its
fixed wireless subscribers. Telkomsel&#146;s subscriber base has
increased from 9,588,807 subscribers as of December&nbsp;31,
2003 to 16,290,508 subscribers as of December&nbsp;31, 2004 and
24,269,353&nbsp;subscribers as of December&nbsp;31, 2005.
TELKOM&#146;s fixed wireless service grew substantially from
1,429,368 lines in service as of December&nbsp;31, 2004 to
4,061,867 lines in service as of December&nbsp;31, 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a result of the Government&#146;s decision issued in the
first quarter of 2005 to rearrange the frequency spectra used by
the telecommunication service providers, TELKOM can no longer be
able to utilize certain frequency spectra it currently uses to
support fixed wireline cable network commencing at the end of
2006. Consequently, certain of TELKOM&#146;s cable network
facilities within the fixed wireline segment which comprise
primarily of WLL and approach link operating in the affected
frequency spectra, can no longer be used commencing at the end
of 2006. Accordingly, TELKOM shortened its estimate of the
remaining useful lives for WLL and approach link equipment in
the first quarter of 2005 and began depreciating the then
remaining net book value of those assets through
December&nbsp;31, 2006. The effect of this change in estimate
increased depreciation expense by Rp.471.2&nbsp;billion in 2005.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Further, in August 2005, the Government decided to set aside
1900&nbsp;MHz for the exclusive use in the 3G services and 800
MHz frequency spectrum for the exclusive use in CDMA-based
technology network commencing at the end of 2007. As a result,
TELKOM&#146;s BSS equipment in Jakarta and West Java areas,
which operates in 1900&nbsp;MHz and are part of the fixed
wireless transmission installation and equipment, can no longer
be used commencing at the end of 2007. Following the
Government&#146;s decision, TELKOM&#146;s reviewed the
recoverable amount of cash-generating unit to which the affected
fixed wireless asset belongs and recognized a write-down of
Rp.616.8&nbsp;billion relating to this equipment in 2005. In
addition, TELKOM changed its estimate of the remaining useful
lives for the Jakarta and West Java BSS equipment and
depreciates the remaining net book value of those assets through
June&nbsp;30, 2007, the date when all of TELKOM&#146;s
1900&nbsp;MHz BSS equipment are expected to be completely
replaced with the 800&nbsp;MHz BSS equipment. The effect of this
change in estimate increased depreciation expense by
Rp.159.0&nbsp;billion in 2005. In addition, TELKOM recognized a
loss relating to non-cancellable contracts for procurement of
the 1900 MHz transmission installation and equipment in Jakarta
and West Java areas amounting to Rp.79.4&nbsp;billion in 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Changes in Methods of Accounting under Indonesian GAAP</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In June 2004, the Indonesian Financial Accounting Standards
Board issued PSAK No.&nbsp;24 (Revised 2004), &#147;Employee
Benefits&#148; (PSAK&nbsp;24R), which is a revision of PSAK
No.&nbsp;24, &#147;Accounting for Pension Benefits.&#148;
PSAK&nbsp;24R changes TELKOM&#146;s method of accounting for
employee benefit plans by requiring the vested portion of prior
service cost be immediately recognized and that the cumulative
unrecognized actuarial gain or loss exceeding ten percent of the
greater of the present value of the projected benefit obligation
and the fair value of plan assets be amortized over the expected
average remaining working lives of the employees participating
in the plan. PSAK&nbsp;24R requires TELKOM to adopt its
provisions retrospectively as of January&nbsp;1, 2004, (the
&#147;Transition Date&#148;) by way of the recognition of:
(i)&nbsp;a liability computed in accordance with the provisions
of PSAK&nbsp;24R determined as of the Transition Date (the
&#147;Transition Liability&#148;) and (ii)&nbsp;the difference
between the Transition Liability and the liability previously
recognized for employee benefits as of the same date pursuant to
then in effect accounting standards, as a cumulative effect of a
change in method of accounting in stockholders&#146; equity.
Accordingly, TELKOM has restated its consolidated balance sheet
as of the Transition Date by increasing its liability for
employee benefits previously reported by Rp.3,218.7&nbsp;billion
with a corresponding decrease in consolidated stockholders&#146;
equity of Rp.2,618.7&nbsp;billion, net of tax of
Rp.600.1&nbsp;billion. In addition, the adoption of PSAK 24R,
effective as of January&nbsp;1, 2004, has resulted in an
increase in the previously reported net income for the year
ended December&nbsp;31, 2004 in the amount of
Rp.485.4&nbsp;billion, net of tax of Rp.175.5&nbsp;billion.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In July 2004, the Indonesian Financial Accounting Standards
Board issued PSAK No.&nbsp;38 (Revised 2004), &#147;Accounting
for Restructuring Transactions between Entities under Common
Control,&#148; (&#147;PSAK&nbsp;38R&#148;). PSAK&nbsp;38R
changes TELKOM&#146;s method of accounting for previously
recorded restructuring transactions between entities under
common control when certain conditions are met. The provisions
of PSAK&nbsp;38R were effective for TELKOM beginning
January&nbsp;1, 2005, the initial application date. Pursuant to
a ruling issued by the Indonesian Capital Market and Financial
Institution Supervisory Agency (&#147;BAPEPAM&#148;) regarding
the initial application of PSAK&nbsp;38R by public entities,
TELKOM is required to reclassify the previously recorded
difference in value of restructuring transactions between
entities under common control as a direct adjustment to retained
earnings as of the initial application date when the common
control relationship between the transacting parties no longer
exists as of January&nbsp;1, 2005. The difference in value of
restructuring transactions between entities under common control
as of January&nbsp;1, 2005 amounting to Rp.7,288.3&nbsp;billion
arose from transactions between TELKOM and Indosat, which at the
time of the transactions was also controlled by the Government
and therefore was an entity under common control with TELKOM.
This common control relationship ceased to exist in
December&nbsp;2002 when the Government sold its 41.94% ownership
interest in Indosat to STT Communications Ltd.
(&#147;STTC&#148;) and waived its special voting rights with
respect to the Series&nbsp;A Dwiwarna share. In accordance with
the BAPEPAM ruling, TELKOM has reclassified the difference in
value of restructuring transactions between entities under
common control resulting from the cross-
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">84

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
ownership transactions and acquisition of Pramindo as a charge
to retained earnings as of January&nbsp;1, 2005. This
reclassification has no effect on net consolidated
stockholders&#146; equity. See Note&nbsp;4b to TELKOM&#146;s
consolidated financial statements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Basis of Presentation</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Consolidation of TELKOM&#146;s Financial Statements</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM consolidates its financial statements and those of
subsidiaries in which TELKOM has direct ownership interest of
more than 50% or where TELKOM controls the subsidiaries.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM consolidated AriaWest&#146;s financial statements into
its 2003 financial statements from July&nbsp;31, 2003, the date
of acquisition of 100% equity interest in AriaWest.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM consolidated the revenues and expenses of KSO&nbsp;IV
from February 2004 after it obtained the legal right to control
financial and operating decisions of KSO&nbsp;IV on
January&nbsp;20, 2004.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Foreign Exchange Translations</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The functional currency of TELKOM and its subsidiaries is the
Indonesian Rupiah and the books of accounts of TELKOM and its
subsidiaries are maintained in Indonesian Rupiah. Transactions
in foreign currencies are translated into Indonesian Rupiah at
the rates of exchange prevailing at the transaction date. At the
balance sheet date, the exchange rates used for translation of
monetary assets and monetary liabilities denominated in foreign
currencies are the buying and selling rates quoted by Reuters
prevailing at the balance sheet date. The Reuters buy and sell
rates, applied respectively to translate monetary assets and
monetary liabilities, were Rp.8,430 and Rp.8,450 to US$1.00 as
of December&nbsp;31, 2003, Rp.9,280 and Rp.9,300 to US$1.00 as
of December&nbsp;31, 2004 and Rp.9,825 and Rp.9,835 to US$1.00
as of December&nbsp;31, 2005. These rates differ from the rates
used for convenience translations in this Annual Report,
including in the tables appearing in the discussion and analysis
below. See Note&nbsp;2(e) to the consolidated financial
statements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The resulting foreign exchange gains and losses, realized and
unrealized, are credited or charged to income of the current
year, except for foreign exchange differences incurred on
borrowings during the construction of qualifying assets which
are capitalized to the extent that the borrowings can be
attributed to the construction of those qualifying assets.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The consolidated financial statements are stated in Indonesian
Rupiah. The translations of Indonesian Rupiah amounts for 2005
into United States Dollars are included solely for the
convenience of the readers and have been made using the average
of the market buy and sell rates of Rp.9,830 to US$1.00
published by Reuters on December&nbsp;31, 2005. 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 Dollars at this or any
other rate of exchange. See Note&nbsp;3 to the consolidated
financial statements.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">85

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>TELKOM&#146;s Operating Revenues</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets out TELKOM&#146;s operating revenues,
itemized according to TELKOM&#146;s main products and services,
for the three years 2003 through 2005, with each item also
expressed as a percentage of total operating revenues:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>US$ (million)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Operating Revenues</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Telephone</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fixed lines</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,896.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,645.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,781.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,096.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cellular</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,458.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,421.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,570.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,482.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenue under Joint Operation Schemes (JOS)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,486.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>656.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>588.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>59.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interconnection</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,162.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,188.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,742.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>787.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Data and Internet</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,108.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,808.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,934.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>705.4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Network</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>517.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>654.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>586.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>59.7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenue-sharing arrangements</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>258.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>280.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>302.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other telecommunications services</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>226.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>293.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>301.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Operating Revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27,116.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,947.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41,807.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,253.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Subsequent to an announcement by the DGPT in August 2001 that
the Government intended to terminate TELKOM&#146;s exclusive
right to provide local and domestic long-distance services,
TELKOM&#146;s exclusive right to provide domestic local service
was finally terminated in August 2002 and TELKOM&#146;s
exclusive right to provide domestic
<FONT style="white-space: nowrap">long-distance</FONT> service
was likewise terminated in August 2003. TELKOM, however,
received its commercial license to provide IDD fixed line
services on May&nbsp;13, 2004. As a result of the termination of
TELKOM&#146;s exclusive right to provide local and domestic
long-distance service, Indosat, a competitor of TELKOM, received
its commercial license to provide domestic long-distance
services on May&nbsp;13, 2004 and began offering fixed wireless
services in August 2004. Indosat began offering its domestic
long-distance service in late 2004. TELKOM expects that revenues
from providing interconnection services to new entrants in the
domestic local and domestic
<FONT style="white-space: nowrap">long-distance</FONT> markets
will increase and its market share of fixed line services will
decrease slightly in the future because of the liberalization of
these markets. With regard to IDD fixed line services, TELKOM
began offering these services to its customers on June&nbsp;7,
2004 under the &#147;TIC&nbsp;007&#148; brand. TELKOM recognizes
international
<FONT style="white-space: nowrap">long-distance</FONT> revenues
from TELKOM&#146;s IDD service
<FONT style="white-space: nowrap">(TIC-007)</FONT> as
interconnection revenues.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fixed Line Telephone
Revenues</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The components of fixed line revenues are local and domestic
<FONT style="white-space: nowrap">long-distance</FONT> usage
charges, monthly subscription charges, installation charges,
phone cards and others. Local and domestic
<FONT style="white-space: nowrap">long-distance</FONT> usage
charges, monthly subscription charges and installation charges
relate to both fixed wireline and fixed wireless telephones.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Local and domestic
<FONT style="white-space: nowrap">long-distance</FONT> usage and
monthly subscription charges are determined by
telecommunications operators based on a formula set by the
Government that determines maximum tariff levels. The maximum
tariff levels apply uniformly throughout Indonesia.
TELKOM&#146;s monthly subscription charges are based on a
uniform schedule of charges that vary according to the type of
user and the type of services provided. Local and domestic
<FONT style="white-space: nowrap">long-distance</FONT> usage
charges vary depending on
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">86

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
the distance called, duration and time band, while installation
charges, phone cards and other services charges are set by
individual operators. See Item&nbsp;5. &#147;Operating and
Financial Review and Prospects&nbsp;&#151; A.&nbsp;Operating
Results&nbsp;&#151; Overview&nbsp;&#151; Limited Increases in
Tariffs&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Most fixed line revenues are recognized as services are
provided, except the installation charges are recognized as
revenue when a fixed line (referred to as an
&#147;installation&#148; in the consolidated financial
statements) is placed in service.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Fixed line telephone revenues for the three years 2003 through
2005 are set out below, with each item also expressed as a
percentage of operating revenues:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="26%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>US$ (million)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Fixed Line Telephone Revenues</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Local and domestic long-distance usage</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,561.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,439.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,223.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>734.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Monthly subscription charges</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,948.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,934.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,289.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>334.7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Installation charges</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>223.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>201.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>197.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Phone cards</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Others</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>128.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>53.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>60.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,896.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,645.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,781.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,096.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cellular Telephone
Revenues</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The main component of cellular telephone revenues is air time
charges. Cellular telephone revenues also include monthly
subscription charges, connection fee charges and features.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Air time charges and monthly subscription charges are determined
by telecommunications operators based on maximum tariff levels
fixed by the Government. The maximum tariff levels apply
uniformly throughout Indonesia. Connection fee charges are
determined by individual operators. Only postpaid subscribers
pay connection and monthly subscription fees, while prepaid
customers generally pay higher air time usage charges. In
TELKOM&#146;s consolidated statements of income, a portion of
revenues from sales of prepaid starter packs is also recorded as
connection fees.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the case of postpaid subscribers, monthly subscription
charges are recognized when earned (i.e., in the month to which
they apply), while connection fee revenue is recognized as
income when connections take place. In the case of prepaid
subscribers, revenues from &#147;starter packs&#148; are
recognized upon delivery to distributors, dealers or directly to
customers, while revenues from pulse refill vouchers are
recognized initially as unearned income and thereafter
recognized proportionately as revenue based on successful calls
made using the stored value of the voucher or when the unused
stored value has expired. Revenues recognized are net of dealer
discounts.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">87

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Cellular telephone revenues for the three years 2003 through
2005 are set out below, with each item also expressed as a
percentage of operating revenues:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="29%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>US$ (million)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="5" align="left" valign="top">
    <B>Cellular Telephone Revenues</B></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Air time charges</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,677.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,825.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,666.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,390.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Monthly subscription charges</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>580.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>448.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>383.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Connection fee charges</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>194.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>55.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>64.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Features</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>91.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>457.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,458.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,421.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,570.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,482.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Joint Operation Scheme
(&#147;KSO&#148;) Revenues</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
KSO revenues consist of:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Initial payment made by the KSO partners, which is amortized
    over the life of the KSO Agreement;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Minimum TELKOM Revenues (&#147;MTR&#148;), being a specified
    minimum payment, which is payable monthly; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Distributable TELKOM Revenues (&#147;DTR&#148;), being a
    specified percentage of KSO revenues after deduction of
    operating expenses and MTR obligation, which is payable monthly.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
KSO revenues have been decreasing due to the acquisition of KSO
partners&#146; interests in the KSOs, resulting in the revenues
of the KSOs being consolidated and included under Fixed Line
revenues.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
KSO revenues for the three years 2003 through 2005 are set out
below, with each item also expressed as a percentage of
operating revenues:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>US$ (million)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>KSO Revenues</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Minimum TELKOM Revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>899.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>296.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>268.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Share in Distributable KSO Revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>583.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>349.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>318.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32.4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of unearned initial investor payments under Joint
    Operation Schemes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,486.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>656.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>588.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>59.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interconnection
Revenues</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The components of interconnection revenues are revenues from
cellular interconnection, international interconnection and
other interconnection. Interconnection revenues consist
primarily of fees charged to other domestic and international
carriers when calls originating in their networks interconnect
with TELKOM&#146;s fixed line network and Telkomsel&#146;s
mobile cellular network. Interconnection revenues also include
international roaming by overseas operators to Telkomsel&#146;s
mobile cellular network, a retail fee charged to TELKOM&#146;s
subscribers for an outgoing call and international
<FONT style="white-space: nowrap">long-distance</FONT> revenues
from TELKOM&#146;s IDD service
<FONT style="white-space: nowrap">(TIC-007)</FONT> since the
launch of TELKOM&#146;s IDD service
<FONT style="white-space: nowrap">(TIC-007)</FONT> in June 2004.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">88

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Fees charged for interconnection are determined contractually
between operators, subject to maximum fee levels established by
Government regulation. Revenues from interconnection with other
domestic and international telecommunications carriers are
recognized as incurred and are presented net of interconnection
expenses paid to other operators. Interconnection revenues are
typically accrued initially and settled among operators monthly
and can fluctuate significantly as a result of adjustments among
operators to accrued amounts at the time of settlement. On
March&nbsp;11, 2004, the MoC issued a decree stating that
cost-based interconnection will commence beginning
January&nbsp;1, 2005. However, the implementation of the new
cost-based interconnection was delayed due to difficulties in
drafting the relevant regulations and selecting the appropriate
tariff scheme. On February&nbsp;8, 2006, the MoCI issued
Regulation&nbsp;No.&nbsp;8/2006, which mandates a new cost-based
interconnection tariff scheme for all telecommunications network
and services operators. There can be no assurance as to how this
will affect TELKOM&#146;s business, financial condition and
results of operations. For further information on the
interconnection scheme, see Item&nbsp;4. &#147;Information on
the Company&nbsp;&#151; B. Business Overview&nbsp;&#151;
Regulations&nbsp;&#151; Interconnection&#148;; and Item&nbsp;3.
&#147;Key Information&#148;&nbsp;&#151; D.&nbsp;Risk
Factors&nbsp;&#151; Risks relating to TELKOM and its
subsidiaries&nbsp;&#151; TELKOM operates in a legal and
regulatory environment that is undergoing significant reforms
and such reforms may adversely affect TELKOM&#146;s
business&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Interconnection revenues for the three years 2003 through 2005
are set out below, with each item also expressed as a percentage
of operating revenues:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="26%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>US$ (million)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Interconnection Revenues</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cellular</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,908.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,351.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,685.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>680.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    International</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>184.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>641.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>854.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>87.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>69.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>195.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>202.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,162.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,188.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,742.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>787.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Data
and Internet Revenues</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The components of data and Internet revenues are revenues from
SMS, internet, data communication, VoIP and
<FONT style="white-space: nowrap">E-business</FONT> services.
Data and Internet revenue for the three years 2003 through 2005
are set out below, with each item also expressed as a percentage
of operating revenues:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="26%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>US$ (million)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Data and Internet Revenue</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SMS</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,205.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,562.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,309.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>540.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Internet</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>325.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>554.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>711.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>72.4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Data communication</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>245.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>360.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>610.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>62.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    VoIP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>328.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>318.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>292.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    E-business</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,108.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,808.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,934.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>705.4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">89

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Network Revenues</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The components of network revenues are revenues from satellite
transponder leases and leased lines. Network revenue for the
three years 2003 through 2005 are set out below, with each item
also expressed as a percentage of operating revenues:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="26%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>US$ (million)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Network Revenue</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Satellite transponder lease</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>270.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>210.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>239.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24.4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Leased lines</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>247.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>443.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>347.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>517.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>654.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>586.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>59.7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenues under
Revenue-Sharing Arrangements</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The components of revenues under revenue-sharing arrangements
are net share in revenue earned under revenue-sharing
arrangements and amortization of unearned income under
revenue-sharing arrangements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Revenues under revenue-sharing arrangements for the three years
2003 through 2005 are set out below, with each item also
expressed as a percentage of operating revenues:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="26%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>US$ (million)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Revenues Under Revenue-Sharing Arrangements</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net share in revenue earned under Revenue-Sharing Arrangements</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>200.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>198.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>165.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of unearned income under Revenue-Sharing
    Arrangements</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>58.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>136.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>258.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>280.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>302.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other Telecommunications
Services Revenues</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Other telecommunications services revenues primarily represent
telex and telegram revenues, revenues from the telephone
directory assistance business and revenues from cable television
services. In 2005, TELKOM&#146;s revenues from other
telecommunications services increased by Rp.7.8&nbsp;billion, or
2.7%, from Rp.293.2&nbsp;billion in 2004 to
Rp.301.0&nbsp;billion in 2005. The increase in other
telecommunications services revenues was primarily due to an
increase in <FONT style="white-space: nowrap">pay-TV</FONT>
revenues and directory assistance revenues, which increase was
partially offset by a decrease in telex and telegram revenues
due to technological advancement.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">90

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>TELKOM&#146;s Operating Expenses</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets out TELKOM&#146;s operating expenses
for the three years 2003 through 2005, with each item also
expressed as a percentage of operating revenues:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="26%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>(As restated*)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>US$ (million)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Operating Expenses</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,779.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,438.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,570.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>770.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operations, maintenance and telecommunications services</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,338.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,529.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,916.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>601.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Personnel</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,440.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,910.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,563.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>667.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    General and administrative</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,078.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,599.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,764.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>281.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Marketing</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>502.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>881.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,126.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>114.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Write-down of assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>616.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>62.7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss on procurement commitments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>79.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Operating Expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,140.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>55.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,359.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>57.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,636.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>58.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,506.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>*&nbsp;</TD>
    <TD align="left">
    The 2004 figures have been restated due to the adoption of PSAK
    24R. See &#147;&#151; Changes in Methods of Accounting under
    Indonesian GAAP&#148; and Note 4a to TELKOM&#146;s consolidated
    financial statements.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation Expense,
Write-down of Assets and Loss on Procurement Commitments</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Depreciation expense relates to TELKOM&#146;s property, plant
and equipment. TELKOM depreciates its property, plant and
equipment, except land, using the straight-line method, based on
the useful lives of the assets, commencing in the month such
assets were placed into service. See Note&nbsp;2k to the
consolidated financial statements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In accordance with Indonesian GAAP, TELKOM capitalizes interest
expenses and foreign exchange gains or losses for assets under
construction and depreciates these amounts over the useful lives
of such assets. In 2003, 2004 and 2005, TELKOM capitalized
interest expenses for assets under construction of
Rp.22.9&nbsp;billion, Rp.57.7&nbsp;billion and nil,
respectively. TELKOM capitalized foreign exchange losses (gains)
for assets under construction of nil, Rp.74.3&nbsp;billion and
nil in 2003, 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a result of the Government&#146;s decisions issued in 2005 on
the rearrangement of frequency spectra utilized by the
telecommunication industry, certain of TELKOM&#146;s fixed
wireline cable network facilities, which comprise primarily of
WLL and approach link, and TELKOM&#146;s BSS equipment in
Jakarta and West Java areas, which are part of transmission
installation and equipment for fixed wireless assets, cannot be
used through the end of their initial estimated useful lives. In
2005, TELKOM recognized a write-down of assets of
Rp.616.8&nbsp;billion related to transmission installation and
equipment of fixed wireless assets and loss on procurement
commitments of Rp.79.4&nbsp;billion related to non-cancelable
contracts for procurement of the 1900 MHz transmission
installation and equipment in Jakarta and West Java areas.
TELKOM also shortened its estimate of the remaining useful lives
for fixed wireline WLL and approach link equipment and the
Jakarta and West Java fixed wireless BSS equipment. See
Item&nbsp;5. &#147;Operating and Financial Review and
Prospects&nbsp;&#151; A. Operating Results&nbsp;&#151;
Overview&nbsp;&#151; Write-down of Assets, Depreciation Expense,
Loss on Procurement Commitments, and Operations, Maintenance and
Telecommunication Services Expenses.&#148;
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">91

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operations, Maintenance and
Telecommunications Services Expenses</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Operations, maintenance and telecommunications services expenses
for the three years 2003 through 2005 are set out below, with
each item also expressed as a percentage of operating revenues:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="26%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>US$ (million)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Operations, Maintenance and Telecommunications Services
    Expenses</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operations and maintenance</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,744.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,398.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,075.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>312.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Concession fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>610.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>807.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,257.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>128.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cost of phone, SIM and RUIM cards</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>181.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>366.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>582.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>59.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Electricity, gas and water</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>300.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>385.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>372.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Vehicles and supporting facilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>115.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>181.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>217.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Insurance</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>157.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>151.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>136.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Leased lines</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>127.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>132.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>124.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Traveling</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>42.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Others</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>71.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>63.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>117.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,338.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,529.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,916.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>601.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Personnel Expenses</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The main components of personnel expenses in 2005 were salaries
and related benefits, which were Rp.2,165.9&nbsp;billion
(US$220.3&nbsp;million), vacation pay, incentives and other
benefits, which were Rp.1,615.6&nbsp;billion
(US$164.4&nbsp;million), and employee income tax, which was
Rp.856.4&nbsp;billion (US$87.1&nbsp;million).
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">92

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Personnel expenses for the three years 2003 through 2005 are set
out below, with each item also expressed as a percentage of
operating revenues:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="26%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>(As restated*)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>US$ (million)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Personnel Expenses</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Salaries and related benefits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,574.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,796.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,165.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>220.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Vacation pay, incentives and other benefits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>816.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,156.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,615.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>164.4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Early retirements</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>355.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>243.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>486.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>49.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net periodic post-retirement health care benefit cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>641.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>416.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>488.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>49.7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net periodic pension cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>191.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>572.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>532.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>54.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Employee income tax</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>468.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>523.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>856.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>87.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long service awards</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>219.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>36.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>201.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Housing</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>116.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>103.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>113.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Medical</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other employee benefits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Others</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>42.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>78.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,440.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,910.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,563.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>667.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>*&nbsp;</TD>
    <TD align="left">
    The 2004 figures have been restated due to the adoption of PSAK
    24R. See &#147;&#151; Change in Method of Accounting under
    Indonesian GAAP&#148; and Note&nbsp;4a to TELKOM&#146;s
    consolidated financial statements.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and Administrative
Expenses</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The main components of general and administrative expenses in
2005 were amortization of goodwill and other intangible assets,
which totaled Rp.918.2&nbsp;billion (US$93.4&nbsp;million),
arising from the acquisitions of GSD, Dayamitra, Pramindo,
AriaWest and KSO IV in previous years, provision for doubtful
accounts and inventory obsolescence, which totaled
Rp.489.0&nbsp;billion (US$49.7&nbsp;million), and collection
expenses, which totaled Rp.379.1&nbsp;billion
(US$38.6&nbsp;million).
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">93

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
General and administrative expenses for the three years 2003
through 2005 are set out below, with each item also expressed as
a percentage of operating revenues:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="26%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>US$ (million)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>General and Administrative Expenses</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Professional fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>115.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>137.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>131.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Collection expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>273.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>359.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>379.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of goodwill and other intangible assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>730.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>872.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>918.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>93.4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Training, education and recruitment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>126.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>228.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>177.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Travel</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>144.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>192.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>171.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Security and screening</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>110.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>143.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>164.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16.7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    General and social contribution</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>113.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>111.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>204.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Printing and stationery</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>81.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Meetings</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>42.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>58.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>40.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Provision for doubtful accounts and inventory obsolescence</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>326.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>357.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>489.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>49.7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Research and development</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Others</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,078.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,599.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,764.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>281.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Marketing Expenses</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Marketing expenses consist of advertising, customer education
and other marketing expenses.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="29%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>US$ (million)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Marketing Expenses</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Advertising</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>381.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>699.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>795.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>80.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Customer education</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>102.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>152.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>305.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Others</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>502.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>881.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,126.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>114.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Results of Operations</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Year ended December&nbsp;31,
2005 compared to year ended December&nbsp;31, 2004</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating Revenues.</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Total operating revenues increased by Rp.7,859.4&nbsp;billion,
or 23.2%, from Rp.33,947.8&nbsp;billion in 2004 to
Rp.41,807.2&nbsp;billion in 2005. Increase in operating revenues
in 2005 was primarily due to increases in revenues from
cellular, interconnection and data and Internet.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">94

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Fixed Line Telephone Revenues.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Fixed line revenues increased by Rp.136.3&nbsp;billion, or 1.3%,
from Rp.10,645.0&nbsp;billion in 2004 to
Rp.10,781.3&nbsp;billion in 2005. The increase in fixed line
revenues was primarily due to an increase in fixed wireless
revenues, partially offset by a decrease in fixed wireline
revenues. Fixed wireless revenues increased by
Rp.411.3&nbsp;billion, or 417.1%, from Rp.98.6&nbsp;billion in
2004 to Rp.509.9&nbsp;billion in 2005. Fixed wireline revenues
decreased by Rp.275.0&nbsp;billion, or 2.6%, from
Rp.10,546.4&nbsp;billion in 2004 to Rp.10,271.4&nbsp;billion
in&nbsp;2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The increase in fixed wireless revenues was primarily
attributable to a 184.2% growth in the number of subscribers and
lines in service for fixed wireless, from 1,429,368 lines in
service as of December&nbsp;31, 2004 to 4,061,867 lines in
service as of December&nbsp;31, 2005, particularly, the 184.7%
growth in the number of lines in service in the
<FONT style="white-space: nowrap">non-KSO</FONT> regions,
resulting in an increase of lines in service from 1,317,673 as
of December&nbsp;31, 2004 to 3,750,821 as of December&nbsp;31,
2005 primarily due to an aggressive marketing campaign in those
regions from April to June 2005. Such increase was partially
offset by a decrease in fixed wireline revenues which was
primarily due to a 7.6% decrease in local and domestic
long-distance revenues from Rp.7,493.1&nbsp;billion in 2004 to
Rp.6,920.2&nbsp;billion.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Cellular Telephone Revenues.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Cellular telephone revenues increased by
Rp.4,149.6&nbsp;billion, or 39.8%, from Rp.10,421.3&nbsp;billion
in 2004 to Rp.14,570.9&nbsp;billion in 2005. The increase in
cellular telephone revenues was primarily due to an increase in
air time charges, connection fee charges for new subscribers and
features, partially offset by a decrease in monthly subscription
charges. Air time charges increased by Rp.3,840.6&nbsp;billion,
or 39.1%, from Rp.9,825.7&nbsp;billion in 2004 to
Rp.13,666.3&nbsp;billion in 2005. Connection fee charges
increased by Rp.8.3&nbsp;billion, or 14.9%, from
Rp.55.8&nbsp;billion in 2004 to Rp.64.1&nbsp;billion in 2005 due
to the growth in KartuHALO and SimPATI net-additional cellular
subscribers. Features increased by Rp.365.7&nbsp;billion, or
400.6%, from Rp.91.3&nbsp;billion in 2004 to
Rp.457.0&nbsp;billion in 2005 due to an increase in sales from
the new feature services introduced in 2005, including ring back
tone, message boards and mobile fax services. Monthly
subscription charges decreased by Rp.65.0&nbsp;billion, or
14.5%, from Rp.448.5&nbsp;billion in 2004 to
Rp.383.5&nbsp;billion in 2005, primarily due to the special
exemption from subscription charges for certain customers
offered by Telkomsel to match similar programs offered by its
competitors. The increase in cellular telephone revenues was
primarily attributable to 49% growth in Telkomsel&#146;s total
cellular subscribers from 16,290,508 subscribers as of
December&nbsp;31, 2004 to 24,269,353 subscribers as of
December&nbsp;31, 2005. This increase was caused by a 19% growth
in net-additional subscribers from 6,701,701&nbsp;subscribers in
2004 to 7,978,845 subscribers in 2005. Postpaid subscribers grew
by 11% to 1,470,755 subscribers and prepaid subscribers grew by
52% to 22,798,598 subscribers, in each case as of
December&nbsp;31, 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a result of the higher rate of growth in the number of
prepaid subscribers, the proportion of prepaid subscribers to
total subscribers increased from 91.9% as of December&nbsp;31,
2004 to 93.9% as of December&nbsp;31, 2005. As a result of the
change in the subscriber mix, with the increased number of
prepaid subscribers as a percentage of total subscribers,
blended monthly ARPU decreased from approximately Rp.102,000 in
2004 to approximately Rp.87,000 in 2005. Despite the decrease in
overall ARPU for voice, the SMS/non-voice ARPU for postpaid
increased (by approximately 15%) due to the increase in premium
SMS, mobile banking services and other value-added services.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Interconnection Revenues.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Net interconnection revenues increased by
Rp.1,554.1&nbsp;billion, or 25.1%, from Rp.6,188.0&nbsp;billion
in 2004 to Rp.7,742.1&nbsp;billion in 2005. Net interconnection
revenues comprises net interconnection revenues from
TELKOM&#146;s fixed line network (after eliminating net
interconnection revenues for interconnections with
Telkomsel&#146;s mobile cellular network) and net
interconnection revenues from Telkomsel&#146;s mobile cellular
network (after eliminating net interconnection expense from
interconnections with TELKOM&#146;s fixed line network).
Interconnection revenues included incoming international long-
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
distance revenues from TELKOM&#146;s IDD service (TIC-007), net
of interconnection charges for outgoing international
long-distance calls.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Cellular interconnection revenues increased by
Rp.1,333.5&nbsp;billion, or 24.9%, from Rp.5,351.6&nbsp;billion
in 2004 to Rp.6,685.1&nbsp;billion in 2005, primarily due to the
growth of cellular subscribers in Indonesia. International
interconnection revenues increased by Rp.213.6&nbsp;billion, or
33.3%, from Rp.641.2&nbsp;billion in 2004 to
Rp.854.8&nbsp;billion in 2005, primarily due to an increase in
incoming and outgoing IDD traffic from domestic operators. Other
interconnection revenues increased by Rp.7.0&nbsp;billion, or
3.6%, from Rp.195.2&nbsp;billion in 2004 to
Rp.202.2&nbsp;billion in 2005, primarily due to the growth of
fixed wireless subscribers of Indosat and PT&nbsp;Bakrie Telecom.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM&#146;s interconnection revenues accounted for
approximately 18.5% of TELKOM&#146;s consolidated operating
revenues for the year ended December&nbsp;31, 2005, compared to
18.2% for the year ended December&nbsp;31, 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
KSO Revenues (Joint Operation Scheme Revenues).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
KSO revenues decreased by Rp.67.9&nbsp;billion, or 10.3%, from
Rp.656.6&nbsp;billion in 2004 to Rp.588.7&nbsp;billion in 2005.
The decrease in KSO revenues was primarily due to a decrease in
MTR and DTR in 2005, resulting from the business acquisition of
KSO IV. MTR decreased by Rp.27.4&nbsp;billion, or 9.2%, from
Rp.296.0&nbsp;billion in 2004 to Rp.268.6&nbsp;billion in 2005.
DTR decreased by Rp.30.9&nbsp;billion, or 8.8%, from
Rp.349.5&nbsp;billion in 2004 to Rp.318.6&nbsp;billion in 2005.
Amortization of unearned initial payments decreased by
Rp.9.6&nbsp;billion, or 86.5%, from Rp.11.1&nbsp;billion in 2004
to Rp.1.5&nbsp;billion in 2005 due to the recognition in 2004 of
the remaining portion of unearned initial payments for KSO IV
following the acquisition of KSO IV.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Data and Internet Revenues.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Data and Internet revenues increased by Rp.2,125.5&nbsp;billion,
or 44.2%, from Rp.4,808.8&nbsp;billion in 2004 to
Rp.6,934.3&nbsp;billion in 2005. The increase in data and
Internet revenues was primarily due to significant increases in
SMS revenues, internet connectivity revenues and data
communications revenues, partially offset by a decrease in VoIP
revenues. SMS revenues increased by Rp.1,746.5&nbsp;billion, or
49.0%, from Rp.3,562.7&nbsp;billion in 2004 to
Rp.5,309.2&nbsp;billion in 2005 mainly due to a significant
growth in SMS traffic from Telkomsel subscribers. Internet
connectivity revenues increased by Rp.156.5&nbsp;billion, or
28.2%, from Rp.554.9&nbsp;billion in 2004 to
Rp.711.4&nbsp;billion in 2005 due to increased marketing efforts
to boost sales of data and Internet services, an increase in
usage of the dial-up Internet for TELKOMNet Instant and premium
prepaid dial-up internet access and an increase in Speedy
subscribers in 2005. Data communication revenues increased by
Rp.249.7&nbsp;billion, or 69.2%, from Rp.360.7&nbsp;billion in
2004 to Rp.610.4&nbsp;billion in 2005, due to an increase in new
subscribers of data network services, particularly, frame relay
and IP VPN, primarily used for the internal data networks of
commercial banks. VoIP revenues decreased by
Rp.26.2&nbsp;billion, or 8.2%, from Rp.318.9&nbsp;billion in
2004 to Rp.292.7&nbsp;billion in 2005, due to the decrease in
traffic of outgoing international VoIP calls, primarily
resulting from TELKOM&#146;s focused marketing efforts to
promote TELKOM&#146;s IDD service (TIC-007), an alternative to
VoIP.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Network Revenues.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Network revenues decreased by Rp.67.7&nbsp;billion, or 10.3%,
from Rp.654.3&nbsp;billion in 2004 to Rp.586.6&nbsp;billion in
2005. Satellite transponder revenues increased by
Rp.28.6&nbsp;billion, or 13.6%, from Rp.210.9&nbsp;billion in
2004 to Rp.239.5&nbsp;billion in 2005, primarily due to an
increase in satellite transponder usage by VSAT providers.
Leased lines revenues decreased by Rp.96.3&nbsp;billion, or
21.7%, from Rp.443.4&nbsp;billion in 2004 to
Rp.347.1&nbsp;billion in 2005 as a result of an increase in the
number of telecommunications operators that use their own
networks.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Revenues under Revenue-Sharing Arrangements (&#147;PBHs&#148;).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Revenues under revenue-sharing arrangements increased by
Rp.21.7&nbsp;billion, or 7.7%, from Rp.280.6&nbsp;billion in
2004 to Rp.302.3&nbsp;billion in 2005. The increase in revenue
under revenue-sharing arrangements was due to an increase in
amortization of unearned income under the revenue-sharing
arrangements which is in line with the increase in the number of
revenue-sharing arrangements. Amortization of unearned income
under revenue-sharing arrangements increased by
Rp.54.7&nbsp;billion, or 66.7%, from Rp.82.0&nbsp;billion in
2004 to Rp.136.7&nbsp;billion in 2005. Net share in revenue
earned under revenue-sharing arrangements decreased by
Rp.33.0&nbsp;billion, or 16.6%, from Rp.198.6&nbsp;billion in
2004 to Rp.165.6&nbsp;billion in 2005. The total number of
revenue-sharing arrangements increased from 79 contracts as of
December&nbsp;31, 2004 to 90 contracts as of December&nbsp;31,
2005. Although the total number of revenue-sharing arrangements
increased, most of them did not generate significant pulse in
2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Other Telecommunications Services Revenues.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Other telecommunications services revenues increased by
Rp.7.8&nbsp;billion, or 2.7%, from Rp.293.2&nbsp;billion in 2004
to Rp.301.0&nbsp;billion in 2005. The increase in other
telecommunications services revenues was primarily due to an
increase in pay-TV revenues and directory assistance revenues,
which increase was partially offset by a decrease in telex and
telegram revenues due to technological advancement.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating Expenses.</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Total operating expenses increased by Rp.5,276.5&nbsp;billion,
or 27.3%, from Rp.19,359.9&nbsp;billion in 2004 to
Rp.24,636.4&nbsp;billion in 2005. The increase in total
operating expenses was attributable to substantial increases in
depreciation, operations, maintenance and telecommunications
services expenses and personnel expenses, and write-down of
assets.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Personnel Expenses.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Personnel expenses increased by Rp.1,653.0&nbsp;billion, or
33.7%, from Rp.4,910.0&nbsp;billion in 2004 to
Rp.6,563.0&nbsp;billion in 2005. The main contributors were the
increase in salaries and related benefits, and vacation pay,
incentives and other benefits, primarily due to the
implementation of performance based remuneration system in July
2004 which resulted in increased base salary, allowances,
incentives and bonuses. These led to an increase in recurring
employee expenses, as follows:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="2%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    salaries and related benefits increased by
    Rp.369.0&nbsp;billion, or 20.5%, from Rp.1,796.9&nbsp;billion in
    2004 to Rp.2,165.9&nbsp;billion in 2005;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    vacation pay, incentives and other benefits increased by
    Rp.459.5&nbsp;billion, or 39.7%, from Rp.1,156.1&nbsp;billion in
    2004 to Rp.1,615.6&nbsp;billion in 2005; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    employee income tax increased by Rp.332.6&nbsp;billion, or
    63.5%, from Rp.523.8&nbsp;billion in 2004 to
    Rp.856.4&nbsp;billion in 2005 which is in line with the increase
    in salaries and related benefits and vacation pay, incentives
    and other benefits.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, long service awards increased by
Rp.165.0&nbsp;billion, or 447.2%, from Rp.36.9&nbsp;billion in
2004 to Rp.201.9&nbsp;billion in 2005, primarily due to the
recognition of actuarial gain of Rp.106.5&nbsp;billion in 2004,
compared to the recognition of actuarial loss of
Rp.82.9&nbsp;billion in 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Early retirement expenses increased by Rp.242.9&nbsp;billion, or
99.8%, from Rp.243.5&nbsp;billion in 2004 to
Rp.486.4&nbsp;billion in 2005. The number of employees taking
early retirement increased from 804 in 2004 to 1,017
in&nbsp;2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Other components of personnel expenses did not contribute
significantly to operating expenses in 2005.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Depreciation Expense.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Depreciation expense increased by Rp.1,132.1&nbsp;billion, or
17.6%, from Rp.6,438.6&nbsp;billion in 2004 to
Rp.7,570.7&nbsp;billion in 2005. The increase in depreciation
expense was primarily due to Telkomsel&#146;s expansion of its
network capacity due to the growth in its subscriber base and an
increase in TELKOM&#146;s capital expenditures for network
infrastructure (transmission network, backbone and access
network), particularly for fixed wireless. In addition, the
increase in depreciation expense was also because TELKOM
shortened the estimate of remaining useful lives for WLL and
approach link equipment and the Jakarta and West Java BSS
equipment, which contributed to increase in depreciation expense
by Rp.471.2&nbsp;billion and Rp.159.0&nbsp;billion,
respectively, in 2005. See Item&nbsp;5. &#147;Operating and
Financial Review and Prospects&nbsp;&#151; A. Operating
Results&nbsp;&#151; Overview&nbsp;&#151; Write-down of Assets,
Depreciation Expense, Loss on Procurement Commitments, and
Operations, Maintenance and Telecommunication Services
Expenses&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Write-down of Assets.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2005, TELKOM recognized a write-down of assets of
Rp.616.8&nbsp;billion related to transmission installation and
equipment of fixed wireless assets. This write-down was made as
a result of TELKOM&#146;s review of the recoverable amount of
the cash-generating unit of its fixed wireless assets following
the Government&#146;s decision to set aside the 1900&nbsp;MHz
frequency spectrum for exclusive use in 3G&nbsp;services and the
800&nbsp;MHz frequency spectrum for CDMA-based technology
network commencing at the end of 2007. As a result of this
decision, TELKOM&#146;s BSS equipment in Jakarta and West Java,
which currently operates in the 1900&nbsp;MHz frequency
spectrum, will no longer be operational commencing at the end of
2007 and, furthermore, this equipment must be replaced with BSS
equipment operating in 800&nbsp;MHZ. See Item&nbsp;5.
&#147;Operating and Financial Review and Prospects&nbsp;&#151;
A. Operating Results&nbsp;&#151; Overview&nbsp;&#151; Write-down
of Assets, Depreciation Expense, Loss on Procurement
Commitments, and Operations, Maintenance and Telecommunication
Services Expenses.&#148;
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Loss on Procurement Commitments.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2005, TELKOM recognized a loss relating to non-cancelable
contracts for procurement of the 1900 MHz transmission
installation and equipment in Jakarta and West Java areas
amounting to Rp.79.4&nbsp;billion. See Item&nbsp;5.
&#147;Operating and Financial Review and Prospects&nbsp;&#151;
A. Operating Results&nbsp;&#151; Overview&nbsp;&#151; Write-down
of Assets, Depreciation Expense, Loss on Procurement
Commitments, and Operations, Maintenance and Telecommunication
Services Expenses.&#148;
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Operations, Maintenance and Telecommunications Services Expenses.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Operations, maintenance and telecommunications services expenses
increased by Rp.1,386.7&nbsp;billion, or 30.6%, from
Rp.4,529.6&nbsp;billion in 2004 to Rp.5,916.3&nbsp;billion in
2005. The increase in operations, maintenance and
telecommunications services expenses was mainly attributable to:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    an increase in operations and maintenance expenses by
    Rp.676.9&nbsp;billion to Rp.3,075.1&nbsp;billion, an increase of
    28.2%, due to an increase in Telkomsel&#146;s operations and
    maintenance expenses arising from the growth in the
    Telkomsel&#146;s overall capacity from 17.9&nbsp;million
    subscribers as of December&nbsp;31, 2004 to 26.2&nbsp;million
    subscribers as of December&nbsp;31, 2005. The number of
    Telkomsel&#146;s BTSs grew by 59.5% from 6,205&nbsp;units in
    2004 to 9,895&nbsp;units in 2005. Telkomsel also increased the
    capacity of its transmitting and receiving stations and
    switching and Intelligent Network equipment;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    cost of phone, SIM and RUIM cards increased by
    Rp.215.6&nbsp;billion to Rp.582.3&nbsp;billion in 2005, an
    increase of 58.8%, due to increases in expenses for TELKOM and
    Telkomsel prepaid cards. TELKOM&#146;s cost of fixed wireless
    cards (starterpack/ voucher/replacement) increased by
    Rp.72.5&nbsp;billion, or 220.4%, from Rp.32.9&nbsp;billion in
    2004 to Rp.105.4&nbsp;billion in 2005. Telkomsel&#146;s cost of
    cards increased by Rp.142.2&nbsp;billion, or 44.9%, from
    Rp.316.5&nbsp;billion in 2004 to</TD>
</TR>

</TABLE>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    Rp.458.7&nbsp;billion in 2005, due to a substantial increase in
    subscribers, particularly prepaid subscribers; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    total concession fees increased by Rp.450.1&nbsp;billion to
    Rp.1,257.4&nbsp;billion in 2005, an increase of 55.8%, primarily
    due to a 125.3% increase, or Rp.394.5&nbsp;billion, in
    concession fees paid to the Government from
    Rp.314.7&nbsp;billion in 2004 to Rp.709.2&nbsp;billion in 2005,
    in line with the growth in operating revenues and incurrence of
    USO contribution by TELKOM and Telkomsel to the Government
    beginning in 2005. Total USO contribution incurred by TELKOM and
    Telkomsel for the fiscal year 2005 amounted to
    Rp.307.7&nbsp;billion.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This increase was partially offset by electricity, gas and water
charges, which slightly decreased by Rp.13.2&nbsp;billion, or
3.4%, from Rp.385.7&nbsp;billion in 2004 to
Rp.372.5&nbsp;billion in 2005, reflecting primarily conservation
and more efficient use of utilities, which decrease was
partially offset by an increase in electricity and gas rates in
2005 compared to 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Other components of operations, maintenance and
telecommunications services expenses did not contribute
significantly to operating expenses in 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
General and Administrative Expenses.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
General and administrative expenses increased by
Rp.164.2&nbsp;billion, or 6.3%, from Rp.2,599.8&nbsp;billion in
2004 to Rp.2,764.0&nbsp;billion in 2005. In particular, in 2005:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    amortization of goodwill and other intangible assets increased
    by Rp.45.9&nbsp;billion to Rp.918.2&nbsp;billion, or 5.3%,
    mainly due to an increase in amortization of intangible assets
    resulting from acquisitions of KSO IV on January&nbsp;20, 2004
    and the remaining 9.68% interest in Dayamitra on
    December&nbsp;14, 2004. The intangible assets resulting from
    such acquisitions were amortized for the full year in 2005,
    compared to 2004 when it was only amortized from the date of
    acquisition;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    collection expenses increased by Rp.20.1&nbsp;billion to
    Rp.379.1&nbsp;billion, an increase of 5.6%, generally in line
    with the growth in TELKOM&#146;s fixed line subscriber base and
    Telkomsel&#146;s mobile cellular subscriber base, which resulted
    in higher collection charges paid to third party collection
    agents;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    security and screening expenses increased by
    Rp.20.5&nbsp;billion, or 14.3%, to Rp.164.4&nbsp;billion in
    2005, primarily due to an increase in the salary of security
    guards by Rp.21.5&nbsp;billion;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    provision for doubtful accounts and inventory obsolescence
    increased by Rp.131.3&nbsp;billion, or 36.7%, to
    Rp.489.0&nbsp;billion in 2005, primarily due to an increase in
    TELKOM and Telkomsel customer defaults as subscriber numbers
    increased; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    general and social contributions expenses increased by
    Rp.92.5&nbsp;billion, or 82.7%, to Rp.204.3&nbsp;billion, which
    increase was primarily due to an increase in social contribution
    fund and community development expenses by Rp.60.6&nbsp;billion
    to Rp.91.9&nbsp;billion in 2005, pursuant to TELKOM&#146;s AGMS
    resolution on June&nbsp;24, 2005.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This increase was partially offset by:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    training, education and recruitment expenses, which decreased by
    Rp.50.6&nbsp;billion to Rp.177.9&nbsp;billion, or 22.2%,
    following a decrease in TELKOM&#146;s employee training programs
    primarily due to a more rigorous selection process for its
    overseas training;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    travel expenses, which decreased by Rp.20.9&nbsp;billion, or
    10.9%, to Rp.171.7&nbsp;billion in 2005, primarily due to a
    decrease in local travel cost by Rp.12.7&nbsp;billion; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    printing and stationery expenses, which decreased by
    Rp.30.8&nbsp;billion, or 38.0%, to Rp.50.2&nbsp;billion in 2005,
    primarily due to a decrease in printing and photocopy expenses
    by Rp.14.8&nbsp;billion, as well as a decrease in stationery
    expenses by Rp.15.6&nbsp;billion, resulting from the
    implementation of cost-saving plans.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">99

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Other components of general and administrative expenses did not
contribute significantly to operating expenses in 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Marketing Expenses.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Marketing expenses increased by Rp.244.3&nbsp;billion, or 27.7%,
from Rp.881.9&nbsp;billion in 2004 to Rp.1,126.2&nbsp;billion in
2005. The increase in marketing expenses was primarily due to an
increase in Telkomsel&#146;s marketing expenses, which increased
by Rp.148.1&nbsp;billion, or 41.6%, primarily due to increases
in customer education expenses, advertising, promotions and
exhibitions.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>Operating Income and Operating Margin</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a result of the foregoing, operating income increased by
Rp.2,582.9&nbsp;billion, or 17.7%, from Rp.14,587.9&nbsp;billion
in 2004 to Rp.17,170.8&nbsp;billion in 2005. TELKOM&#146;s
operating margin slightly decreased from 43.0% in 2004 to 41.1%
in&nbsp;2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>Other Income (Expenses)</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Other expenses decreased by Rp.909.2&nbsp;billion, or 49.5%,
from Rp.1,838.5&nbsp;billion in 2004 to Rp.929.3&nbsp;billion in
2005. The decrease in other expenses was primarily due to a
decrease of 57.7% in foreign exchange losses, primarily due to a
decrease in TELKOM&#146;s borrowings denominated in foreign
currencies and the relatively modest depreciation of Rupiah in
2005 compared to 2004. In particular, in 2005:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Loss on foreign exchange-net decreased by Rp.704.0&nbsp;billion
    from a net loss of Rp.1,220.8&nbsp;billion in 2004 to a net loss
    of Rp.516.8&nbsp;billion in 2005, primarily due to lower foreign
    exchange losses on US dollar borrowings in 2005 compared to
    2004, resulting from a decrease in TELKOM&#146;s US dollar
    borrowings and the relatively modest depreciation of the Rupiah;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Interest expense decreased by Rp.92.8&nbsp;billion, or 7.3%,
    from Rp.1,270.1&nbsp;billion in 2004 to Rp.1,177.3&nbsp;billion
    in 2005, reflecting primarily decreases in short-term bank loans
    and long-term debts of TELKOM;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Interest income increased by Rp.26.8&nbsp;billion, or 8.4%, from
    Rp.317.9&nbsp;billion in 2004 to Rp.344.7&nbsp;billion in 2005,
    primarily due to a slight increase in the average balance of
    time deposits. See Note&nbsp;6 to the consolidated financial
    statements; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Others (net) increased by Rp.78.1&nbsp;billion, from
    Rp.331.1&nbsp;billion in 2004 to Rp.409.2&nbsp;billion in 2005,
    primarily resulting from an increase in income from penalty on
    overdue payments.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Other components did not contribute significantly to Other
Income (Expenses) in&nbsp;2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>Income Before Tax and Pre-Tax Margin</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a result of the foregoing, income before tax increased by
Rp.3,492.0&nbsp;billion, or 27.4%, from Rp.12,749.4&nbsp;billion
in 2004 to Rp.16,241.4&nbsp;billion in 2005.
<FONT style="white-space: nowrap">Pre-tax</FONT> margin
increased from 37.6% in 2004 to 38.8% in&nbsp;2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>Income Tax Expense</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Income tax expense increased by Rp.1,005.4&nbsp;billion, or
24.1%, from Rp.4,178.5&nbsp;billion in 2004 to
Rp.5,183.9&nbsp;billion in 2005, in line with the increase in
income before tax.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>Minority Interest in Net Income of Subsidiaries</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Minority interest in the net income of subsidiaries increased by
Rp.1,107.7&nbsp;billion, or 56.6%, from Rp.1,956.3&nbsp;billion
in 2004 to Rp.3,064.0&nbsp;billion in 2005. The increase was
primarily due to improved financial performance by Telkomsel.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">100

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>Net Income</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a result of the foregoing, net income increased by
Rp.1,379.0&nbsp;billion, or 20.8%, from Rp.6,614.6&nbsp;billion
in 2004 to Rp.7,993.6&nbsp;billion in 2005. TELKOM&#146;s net
income margin decreased from 19.5% in 2004 to 19.1% in 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>Equity</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Total shareholders&#146; equity increased by
Rp.5,164.4&nbsp;billion, or 28.5%, from Rp.18,128.0&nbsp;billion
in 2004 to Rp.23,292.4&nbsp;billion in 2005. The increase in
total shareholders&#146; equity was primarily the result of net
income of Rp.7,993.6&nbsp;billion for the year 2005, partially
offset by the cash dividends of Rp.2,921.2&nbsp;billion.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Retained Earnings.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Appropriated and unappropriated retained earnings decreased by
Rp.2,215.9&nbsp;billion from Rp.18,686.9&nbsp;billion in 2004 to
Rp.16,471.0&nbsp;billion in 2005. The decrease in appropriated
and unappropriated retained earnings was due to the change in
method of accounting for restructuring transactions between
entities under common control, which resulted in TELKOM
reclassifying the difference in value of restructuring
transactions between entities under common control amounting to
Rp.7,288.3&nbsp;billion as a charge to unappropriated retained
earnings as of January&nbsp;1, 2005, and cash dividends of
Rp.2,921.2&nbsp;billion, which decrease was offset by net income
for the year 2005 of Rp.7,993.6&nbsp;billion. The
reclassification of the difference in value of restructuring
transactions between entities under common control amounting to
Rp.7,288.3&nbsp;billion as a charge to unappropriated retained
earnings as of January&nbsp;1, 2005 has no effect on net
consolidated stockholders&#146; equity. See Item&nbsp;5.
&#147;Operating and Financial Review and Prospects&nbsp;&#151;
A.&nbsp;Operating Results&nbsp;&#151; Changes in Methods of
Accounting under Indonesian GAAP&#148; and Note&nbsp;4b to
TELKOM&#146;s consolidated financial statements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>Year ended December&nbsp;31, 2004 compared to year ended
December&nbsp;31, 2003</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>Operating Revenues.</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Total operating revenues increased by Rp.6,831.8&nbsp;billion,
or 25.2%, from Rp.27,116.0&nbsp;billion in 2003 to
Rp.33,947.8&nbsp;billion in 2004. Operating revenues increased
in 2004 for fixed lines, cellular, interconnection, network,
data and Internet, revenue-sharing arrangements and other
telecommunications services. KSO revenues decreased from 2003 to
2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Fixed Line Telephone Revenues.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Fixed line revenues increased by Rp.1,748.1&nbsp;billion, or
19.6%, from Rp.8,896.9&nbsp;billion in 2003 to Rp.
10,645.0&nbsp;billion in 2004. The increase in fixed line
revenues was primarily due to increases in local and domestic
<FONT style="white-space: nowrap">long-distance</FONT> revenues
and monthly subscription charges in 2004. Local and domestic
long-distance revenues increased by Rp.877.5&nbsp;billion, or
13.4%, from Rp.6,561.8&nbsp;billion in 2003 to
Rp.7,439.3&nbsp;billion in 2004 primarily due to an increase in
the number of subscribers. Monthly subscription charges
increased by Rp.986.1&nbsp;billion, or 50.6%, from
Rp.1,948.8&nbsp;billion in 2003 to Rp.2,934.9&nbsp;billion in
2004 primarily due to an increase in the monthly subscription
fee charged to each subscriber.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The increases were primarily attributable to:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the consolidation of KSO IV revenues following the acquisition
    of KSO&nbsp;IV in January 2004, which contributed
    Rp.969.2&nbsp;billion (US$104.3&nbsp;million) to the increase in
    fixed lines revenues;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    TELKOM&#146;s increase in fixed line tariffs in 2004 by a
    weighted average increase of 9%, with local charges increasing
    28.2%, DLD tariffs decreasing by an average of 10% and monthly
    subscription charges increasing by varying amounts from 12.1% to
    25.1%; and</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">101

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<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the 439.8% growth in the number of subscribers and lines in
    service for fixed wireless, from 264,787 lines in service as of
    December&nbsp;31, 2003 to 1,429,368 lines in service as of
    December&nbsp;31, 2004, particularly the 454.2% growth in the
    number of lines in service in the non-KSO regions, resulting
    from the introduction of post-paid fixed wireless services only
    in the first quarter of 2003 and pre-paid fixed wireless service
    only in the third quarter of 2003.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Cellular Telephone Revenues.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Cellular telephone revenues increased by
Rp.1,962.5&nbsp;billion, or 23.2%, from Rp.8,458.8&nbsp;billion
in 2003 to Rp.10,421.3&nbsp;billion in 2004. The increase in
cellular telephone revenues was primarily due to an increase in
air time charges, partially offset by a decrease in monthly
subscription charges and connection fee charges. Air time
charges increased by Rp.2,147.8&nbsp;billion, or 28.0%, from
Rp.7,677.9&nbsp;billion in 2003 to Rp.9,825.7&nbsp;billion in
2004. Monthly subscription charges decreased by
Rp.132.0&nbsp;billion, or 22.7%, from Rp.580.5&nbsp;billion in
2003 to Rp.448.5&nbsp;billion in 2004 due to price competition
among cellular operators and the increase in prepaid subscribers
as discussed below. Connection fee charges decreased by
Rp.138.3&nbsp;billion, or 71.3%, from Rp.194.1&nbsp;billion in
2003 to Rp.55.8&nbsp;billion in 2004 due to price competition
among cellular operators.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The increase in cellular telephone revenues was primarily
attributable to 69.9% growth in Telkomsel&#146;s total cellular
subscribers, from 9,588,807 subscribers as of December&nbsp;31,
2003 to 16,290,508 subscribers as of December&nbsp;31, 2004.
This increase was caused by a 87.3% growth in net-additional
subscribers from 3,578,035 subscribers as of December&nbsp;31,
2003 to 6,701,701 subscribers as of December&nbsp;31, 2004. In
2004, Telkomsel marketed its new Kartu As prepaid cards with
lower denominations than Telkomsel&#146;s other prepaid cards at
the time. The Kartu As prepaid cards have a flat rate, which
generally is lower than Telkomsel&#146;s other prepaid cards
with rates that vary by time of day. Postpaid subscribers grew
by 31.8% to 1,327,549 subscribers and prepaid subscribers grew
by 74.4% to 14,962,959 subscribers, in each case as of
December&nbsp;31, 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a result of the higher rate of growth in the number of
prepaid subscribers, the proportion of prepaid subscribers to
total subscribers increased from 89.5% as of December&nbsp;31,
2003 to 91.9% as of December&nbsp;31, 2004. As a result of the
change in the subscriber mix, with the increased number of
prepaid subscribers as a percentage of total subscribers,
blended monthly ARPU decreased from approximately Rp.123,000 in
2003 to approximately Rp.102,000 in 2004. Despite the decrease
in overall ARPU for voice, the SMS/non-voice ARPU for postpaid
increased (approximately 37% growth average per month) due to
the increase in premium SMS, mobile banking transactions, and
average number of SMS per subscribers per month.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Interconnection Revenues.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Net interconnection revenues increased by
Rp.2,025.9&nbsp;billion, or 48.7%, from Rp.4,162.1&nbsp;billion
in 2003 to Rp.6,188.0&nbsp;billion in 2004. Net interconnection
revenues comprise net interconnection revenues from
TELKOM&#146;s fixed line network (after eliminating net
interconnection revenues for interconnections with
Telkomsel&#146;s mobile cellular network) and net
interconnection revenues from Telkomsel&#146;s mobile cellular
network (after eliminating net interconnection expense from
interconnections with TELKOM&#146;s fixed line network).
Interconnection revenue included international long-distance
revenue from TELKOM&#146;s IDD service
<FONT style="white-space: nowrap">(TIC-007)</FONT> since the
launch in June&nbsp;2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Cellular interconnection revenues increased by
Rp.1,443.3&nbsp;billion, or 36.9%, from Rp.3,908.3&nbsp;billion
in 2003 to Rp.5,351.6&nbsp;billion in 2004, primarily due to the
growth of Telkomsel&#146;s cellular subscribers. International
interconnection revenues increased by Rp.457.1&nbsp;billion, or
248.3%, from Rp.184.1&nbsp;billion in 2003 to
Rp.641.2&nbsp;billion in 2004, primarily due to an increase in
incoming and outgoing IDD traffic. IDD traffic has increased
significantly primarily due to the launch of TELKOM&#146;s IDD
service in June 2004. Other interconnection revenues increased
by Rp.125.5&nbsp;billion, or 180.1%, from Rp.69.7&nbsp;billion
in 2003 to Rp.195.2&nbsp;billion in 2004, primarily due to
interconnection with Indosat&#146;s local fixed wireless
services which was launched in&nbsp;2004.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM&#146;s interconnection revenues accounted for
approximately 18.2% of TELKOM&#146;s consolidated operating
revenues for the year ended December&nbsp;31, 2004, compared to
15.3% for the year ended December&nbsp;31,&nbsp;2003.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
KSO Revenues (Joint Operation Scheme Revenues).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
KSO revenues decreased by Rp.829.7&nbsp;billion, or 55.8%, from
Rp.1,486.3&nbsp;billion in 2003 to Rp.656.6&nbsp;billion in
2004. The decrease in KSO revenues was primarily due to a
significant decrease in MTR and DTR in 2004. MTR decreased by
Rp.603.9&nbsp;billion, or 67.1%, from Rp.899.9&nbsp;billion in
2003 to Rp.296.0&nbsp;billion in 2004. DTR decreased by
Rp.233.5&nbsp;billion, or 40.1%, from Rp.583.0&nbsp;billion in
2003 to Rp.349.5&nbsp;billion in 2004. Amortization of unearned
initial payments increased slightly by Rp.7.7&nbsp;billion, or
224.2%, from Rp.3.4&nbsp;billion in 2003 to Rp.11.1&nbsp;billion
in 2004, due to the recognition in 2004 of the remaining portion
of unearned initial payments for KSO IV following the
acquisition of KSO&nbsp;IV.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The decrease in KSO revenues was attributable to the acquisition
of KSO&nbsp;IV in 2004 and primarily reflected TELKOM&#146;s
share in distributable KSO&nbsp;IV revenues and TELKOM&#146;s
right to receive MTR that were no longer received by TELKOM
following the acquisition of KSO&nbsp;IV. All KSO&nbsp;IV
revenues have been consolidated to TELKOM under fixed lines
revenues since February&nbsp;1, 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a result of the acquisition of operational control of
KSO&nbsp;IV, fixed lines in service in the KSO regions decreased
34.0% from 1,449,066 lines as of December&nbsp;31, 2003 to
956,806 lines as of December&nbsp;31, 2004. Following this
acquisition, KSO&nbsp;VII is the only remaining KSO region under
the joint operation scheme.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Data and Internet Revenues.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Data and Internet revenues increased by Rp.1,700.2&nbsp;billion,
or 54.7%, from Rp.3,108.6&nbsp;billion in 2003 to
Rp.4,808.8&nbsp;billion in 2004. The increase in data and
Internet revenues was primarily due to significant increases in
SMS revenues and Internet revenues and a smaller increase in
data communication revenues, partially offset by a slight
decrease in VoIP revenues. SMS revenues increased by
Rp.1,357.6&nbsp;billion, or 61.6%, from Rp.2,205.1&nbsp;billion
in 2003 to Rp.3,562.7&nbsp;billion in 2004, mainly attributed to
the significant growth in SMS traffic from Telkomsel
subscribers. Internet revenues increased by
Rp.229.0&nbsp;billion, or 70.3%, from Rp.325.9&nbsp;billion in
2003 to Rp.554.9&nbsp;billion in 2004, due to increased usage of
the dial-up Internet in Indonesia. Data communication revenues
increased by Rp.115.1&nbsp;billion, or 46.8%, from
Rp.245.6&nbsp;billion in 2003 to Rp.360.7&nbsp;billion in 2004,
due to the general growth in the data communications market in
Indonesia including use of frame relay and VPN. VoIP revenues
decreased by Rp.9.4&nbsp;billion, or 2.9%, from
Rp.328.3&nbsp;billion in 2003 to Rp.318.9&nbsp;billion in 2004,
due to the decrease in traffic of VoIP.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Network Revenues.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Network revenues increased by Rp.136.4&nbsp;billion, or 26.3%,
from Rp.517.9&nbsp;billion in 2003 to Rp.654.3&nbsp;billion in
2004. A decrease in satellite revenues was offset by an increase
in leased line revenues. Satellite transponder revenues
decreased by Rp.60.0&nbsp;billion, or 22.1%, from
Rp.270.9&nbsp;billion in 2003 to Rp.210.9&nbsp;billion in 2004,
primarily due to a price decrease made in 2004 to reflect market
conditions. Leased lines revenues increased by
Rp.196.4&nbsp;billion, or 79.5%, from Rp.247.0&nbsp;billion in
2003 to Rp.443.4&nbsp;billion in 2004 as a result of an increase
in the number of telecommunications operators, particularly
cellular operators due to significant increases in cellular
subscribers.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Revenues under Revenue-Sharing Arrangements (&#147;PBHs&#148;).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Revenues under revenue-sharing arrangements increased by
Rp.22.1&nbsp;billion, or 8.6%, from Rp.258.5&nbsp;billion in
2003 to Rp.280.6&nbsp;billion in 2004. The increase in revenue
under revenue-sharing arrangements was due to an increase in
amortization of unearned income under revenue-sharing
arrangements, partially offset by a slight decrease in net share
in revenue earned under revenue-sharing arrangements.
Amortization of unearned income under revenue-sharing
arrangements in-
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
creased by Rp.23.6&nbsp;billion, or 40.4%, from
Rp.58.4&nbsp;billion in 2003 to Rp.82.0&nbsp;billion in 2004,
due to amortization of unearned income from TELKOM&#146;s new
revenue-sharing arrangement projects. Net share in revenue
earned under revenue-sharing arrangements decreased by
Rp.1.5&nbsp;billion, or 0.8%, from Rp.200.1&nbsp;billion in 2003
to Rp.198.6&nbsp;billion in 2004, due to the expiration of some
of the revenue-sharing arrangement contracts. Although the total
number of revenue-sharing arrangements increased from
27&nbsp;contracts as of December&nbsp;31, 2003 to
79&nbsp;contracts as of December&nbsp;31, 2004, many of these
new revenue-sharing arrangements did not generate significant
pulse (and corresponding revenue to TELKOM) in 2004, due to the
respective assets being placed into service during the fourth
quarter of 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Other Telecommunications Services Revenues.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Other telecommunications services revenues increased by
Rp.66.3&nbsp;billion, or 29.2%, from Rp.226.9&nbsp;billion in
2003 to Rp.293.2&nbsp;billion in 2004. The increase in revenue
from other telecommunications services was primarily due to an
increase in revenue from telephone directory services resulting
from an increase in advertising and an increase in revenue from
cable television services resulting from increased marketing.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>Operating Expenses.</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Total operating expenses increased by Rp.4,219.9&nbsp;billion,
or 27.9%, from Rp.15,140.0&nbsp;billion in 2003 to
Rp.19,359.9&nbsp;billion in 2004. The increase in total
operating expenses was attributable to substantial increases in
depreciation, operations, maintenance and telecommunications
services expenses and smaller increases in personnel expenses,
general and administrative expenses and marketing expenses.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Personnel Expenses.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Personnel expenses increased by Rp.469.9&nbsp;billion, or 10.6%,
from Rp.4,440.1&nbsp;billion in 2003 to Rp.4,910.0&nbsp;billion
in 2004. The main contributor to the increase was KSO&nbsp;IV
personnel cost following Telkom&#146;s acquisition of
KSO&nbsp;IV. TELKOM incorporated 2,802&nbsp;employees from
KSO&nbsp;IV in 2004. The increase in employees from KSO&nbsp;IV
was partially offset by a decrease of 804 employees that
participated in TELKOM&#146;s early retirement program in 2004.
In addition, in April 2004, TELKOM increased the basic salary,
basic allowance and position allowance of its employees. These
reasons led to an increase in recurring employee expenses, as
follows:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    salaries and related benefits increased by
    Rp.222.7&nbsp;billion, or 14.2%, from Rp.1,574.2&nbsp;billion in
    2003 to Rp.1,796.9&nbsp;billion in 2004; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    vacation pay, incentives and other benefits increased by
    Rp.340.0&nbsp;billion, or 41.7%, from Rp.816.1&nbsp;billion in
    2003 to Rp.1,156.1&nbsp;billion in 2004.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, net periodic pension cost increased by
Rp.381.4&nbsp;billion, or 199.7%, from Rp.191.0 in 2003 to
Rp.572.4&nbsp;billion in 2004, primarily due to recognition of
actuarial gain of Rp.205.1&nbsp;billion in 2003, compared to no
recognition of actuarial gain in 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
These increases offset declines in early retirement costs and
net periodic post-retirement health care benefit cost. Early
retirements costs decreased by Rp.112.2&nbsp;billion, or 31.5%,
from Rp.355.7&nbsp;billion in 2003 to Rp.243.5&nbsp;billion in
2004, due to a decline in the number of employees retiring under
TELKOM&#146;s early retirement program. Net periodic
<FONT style="white-space: nowrap">post-retirement</FONT> health
care benefit cost declined by Rp.225.1&nbsp;billion, or 35.1%,
from Rp.641.4&nbsp;billion in 2003 to Rp.416.3&nbsp;billion in
2004, primarily due to recognition of actuarial loss and net
transition obligation of Rp.99.3&nbsp;billion and
Rp.24.3&nbsp;billion, respectively, in 2003, compared to no
recognition of actuarial loss and net transition obligation in
2004, and a decrease in interest cost by Rp.82.5&nbsp;billion
resulting from decrease in discount rate used to determine net
periodic post-retirement health care cost from 13% in 2003 to
11% in 2004. Long service awards decreased by
Rp.182.3&nbsp;billion mostly due to recognition of actuarial
loss of Rp.87.3&nbsp;billion in 2003, compared to recognition of
actuarial gain of Rp.106.5&nbsp;billion in 2004.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Other components of personnel expenses did not contribute
significantly to operating expenses in 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Depreciation Expense.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Depreciation expense increased by Rp.1,659.1&nbsp;billion, or
34.7%, from Rp.4,779.5&nbsp;billion in 2003 to
Rp.6,438.6&nbsp;billion in 2004. The increase in depreciation
expenses was primarily due to significant increases in
depreciation expense for both TELKOM and Telkomsel.
TELKOM&#146;s increase in depreciation expenses reflected
continued capital expenditures in TELKOM&#146;s transmission
network and backbone, as well as its access network,
particularly for fixed wireless. Telkomsel&#146;s increase in
depreciation expense reflected continued capital expenditures
for Telkomsel&#146;s network infrastructure.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Operations, Maintenance and Telecommunications Services Expenses.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Operations, maintenance and telecommunications services expenses
increased by Rp.1,190.9&nbsp;billion, or 35.7%, from
Rp.3,338.7&nbsp;billion in 2003 to Rp.4,529.6&nbsp;billion in
2004. The increase in operations, maintenance and
telecommunications services expenses was mainly attributable to:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    an increase in operations and maintenance expenses by
    Rp.653.4&nbsp;billion to Rp.2,398.2&nbsp;billion, an increase of
    37.5%, due to an increase in Telkomsel&#146;s operations and
    maintenance expenses arising from the growth in the
    Telkomsel&#146;s overall capacity from 10.8&nbsp;million
    subscribers as of December&nbsp;31, 2003 to 17.9&nbsp;million
    subscribers as of December&nbsp;31, 2004. The number of
    Telkomsel&#146;s BTSs grew by 28.7% from 4,820 units in 2003 to
    6,205&nbsp;units in 2004. Telkomsel also increased the number of
    its transmitting and receiving stations and switching and
    Intelligent Network equipment;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    cost of phone, SIM and RUIM cards increased by
    Rp.185.4&nbsp;billion to Rp.366.7&nbsp;billion in 2004, an
    increase of 102.3%, due to increases in expenses for TELKOM and
    Telkomsel prepaid cards. TELKOM&#146;s prepaid card expenses
    included cost of fixed wireless cards (starterpack/
    voucher/replacement) of Rp.32.9&nbsp;billion that contributed
    Rp.26.5&nbsp;billion to the increase in cost of phone, SIM and
    RUIM cards after TELKOM began its TELKOMFlexi prepaid program in
    September 2003. Telkomsel&#146;s cost of phone and SIM cards of
    Rp.316.5&nbsp;billion contributed Rp.143.3&nbsp;billion to the
    increase in cost of phone, SIM and RUIM cards due to a
    substantial increase in subscribers, particularly prepaid
    subscribers;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    concession fees increased by Rp.196.6&nbsp;billion to
    Rp.807.3&nbsp;billion in 2004, an increase of 32.2%, primarily
    due to a 22.0% increase in frequency usage charges by Telkomsel
    of Rp.77.8&nbsp;billion from Rp.353.6&nbsp;billion in 2003 to
    Rp.431.4&nbsp;billion in 2004, in line with the 28.7% increase
    in the number of BTSs from 4,820 in 2003 to 6,205 in 2004, and a
    31.7% increase in concession fees paid to the Government of
    Rp.75.7&nbsp;billion from Rp.239.0&nbsp;billion in 2003 to
    Rp.314.7&nbsp;billion in 2004, in line with the growth in
    operating revenues; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    electricity, gas and water charges increased by
    Rp.85.3&nbsp;billion, or 28.4%, from Rp.300.4&nbsp;billion in
    2003 to Rp.385.7&nbsp;billion in 2004, reflecting primarily the
    consolidation of the gas electricity and water charges of
    KSO&nbsp;IV, as well as an increase in electricity and gas rates
    in 2004 compared to 2003.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Other components of operations, maintenance and
telecommunications services expenses did not contribute
significantly to operating expenses in 2004.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
General and Administrative Expenses.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
General and administrative expenses increased by
Rp.521.0&nbsp;billion, or 25.1%, from Rp.2,078.8&nbsp;billion in
2003 to Rp.2,599.8&nbsp;billion in 2004. In particular, in 2004:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    amortization of goodwill and other intangible assets increased
    by Rp.141.6&nbsp;billion to Rp.872.3&nbsp;billion, or 19.4%,
    mainly due to amortization of additional intangible assets
    arising from the acquisitions of AriaWest in July 2003,
    KSO&nbsp;IV and the remaining 9.68% interest in Dayamitra;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    training, education and recruitment expenses increased by
    Rp.101.6&nbsp;billion to Rp.228.5&nbsp;billion, or 80.1%,
    following an increase in employees training programs. TELKOM
    increased its employee training programs primarily due to an
    organizational transformation towards more of a customer centric
    approach, additional training to improve internal controls as
    discussed in Item&nbsp;15. &#147;Controls and Procedures&#148;,
    additional training and education expenses resulting from the
    acquisition of KSO&nbsp;IV and the necessary training because of
    new technologies;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    collection expenses increased by Rp.85.2&nbsp;billion to
    Rp.359.0&nbsp;billion, an increase of 31.1%, generally in line
    with the growth in TELKOM&#146;s fixed line subscriber base and
    Telkomsel&#146;s mobile cellular subscriber base, but also
    reflecting higher fees charged by third party collection agents
    used in some regional divisions;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    travel expenses increased by Rp.47.9&nbsp;billion, or 33.1%, to
    Rp.192.6&nbsp;billion in 2004, primarily due to an increase in
    domestic travel cost by Rp.35.2&nbsp;billion;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    security and screening expenses increased by
    Rp.33.6&nbsp;billion, or 30.5%, to Rp.143.9&nbsp;billion in
    2004, primarily due to an increase in the salary of security
    guards by Rp.29.3&nbsp;billion;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    provision for doubtful accounts and inventory obsolescence
    increased by Rp.31.3&nbsp;billion, or 9.6%, to
    Rp.357.7&nbsp;billion in 2004, primarily due to an increase in
    TELKOM and Telkomsel customer defaults as subscriber numbers
    increased; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    printing and stationery expenses increased by
    Rp.30.5&nbsp;billion, or 60.4%, to Rp.81.0&nbsp;billion in 2004,
    primarily due to an increase in printing and photocopy expenses
    by Rp.20.0&nbsp;billion, as well as an increase in stationery
    expenses by Rp.10.0&nbsp;billion.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Other components of general and administrative expenses did not
contribute significantly to operating expenses in 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Marketing Expenses.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Marketing expenses increased by Rp.379.0&nbsp;billion, or 75.4%,
from Rp.502.9&nbsp;billion in 2003 to Rp.881.9&nbsp;billion in
2004. The increase in marketing expenses was primarily due to
TELKOM&#146;s marketing campaign for its new services, primarily
for TELKOMFlexi and Telkom&#146;s IDD service
<FONT style="white-space: nowrap">(TIC-007)</FONT> and an
increase in Telkomsel&#146;s marketing expenses
(Rp.174.1&nbsp;billion or 95.8%), primarily for sales support
and advertising and promotion programs due to significant
competition in the cellular market.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>Operating Income and Operating Margin</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a result of the foregoing, operating income increased by
Rp.2,612.0&nbsp;billion, or 21.8%, from Rp.11,975.9&nbsp;billion
in 2003 to Rp.14,587.9&nbsp;billion in 2004. TELKOM&#146;s
operating margin decreased from 44.2% in 2003 to 43.0% in 2004
due to the higher growth of operating expenses (27.9%) compared
to the growth of operating revenues (25.2%).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>Other Income (Expenses)</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Other expenses increased by Rp.1,314.4&nbsp;billion, or 250.8%,
from Rp.524.1&nbsp;billion in 2003 to Rp.1,838.5&nbsp;billion in
2004. The increase in other expenses was primarily due to a
significant loss on
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">106

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
foreign exchange of Rp.1,220.8&nbsp;billion in 2004 compared to
a gain on foreign exchange of Rp.126.1&nbsp;billion in 2003. In
particular in 2004:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Gain (loss) on foreign
    <FONT style="white-space: nowrap">exchange-net</FONT> decreased
    by Rp.1,346.9&nbsp;billion from a net gain of
    Rp.126.1&nbsp;billion in 2003 to a net loss of
    Rp.1,220.8&nbsp;billion in 2004, primarily due to depreciation
    of the Rupiah from Rp.8,440 to US$1.00 in December 2003 to
    Rp.9,290 to US$1.00 in December 2004, where a loss of
    Rp.342.1&nbsp;billion resulted from liabilities of business
    acquisition of KSO IV due to the acquisition cost being
    denominated in US dollars;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Interest income decreased by Rp.48.1&nbsp;billion, or 13.1%,
    from Rp.366.0&nbsp;billion in 2003 to Rp.317.9&nbsp;billion in
    2004, primarily due to the decrease in floating interest rates
    for both Rupiah and U.S.&nbsp;Dollar-denominated deposits and
    the decrease in average balance of TELKOM&#146;s time deposits
    from Rp.5,037.8&nbsp;billion in 2003 to Rp.4,471.4&nbsp;billion
    in 2004. See Note&nbsp;5 to the consolidated financial
    statements; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Others (net) decreased by Rp.33.2&nbsp;billion, from
    Rp.364.3&nbsp;billion in 2003 to Rp.331.1&nbsp;billion in 2004.
    In 2004, the significant other income (net) included income from
    fines from late-paying subscribers of Rp.280.3&nbsp;billion.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Such increase in Other Expenses was partially offset a decrease
in interest expense by Rp.113.3&nbsp;billion, or 8.2%, from
Rp.1,383.4&nbsp;billion in 2003 to Rp.1,270.1&nbsp;billion in
2004, reflecting primarily the decrease in floating interest
rates for TELKOM&#146;s Rupiah and U.S.&nbsp;Dollar-denominated
debt in 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Other components did not contribute significantly to Other
Income (Expenses) in 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>Income Before Tax and Pre-Tax Margin</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a result of the foregoing, income before tax increased by
Rp.1,297.6&nbsp;billion, or 11.3%, from Rp.11,451.8&nbsp;billion
in 2003 to Rp.12,749.4&nbsp;billion in 2004.
<FONT style="white-space: nowrap">Pre-tax</FONT> margin
decreased from 42.2% in 2003 to 37.6% in 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>Income Tax Expense</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Income tax expense increased by Rp.317.4&nbsp;billion, or 8.2%,
from Rp.3,861.1&nbsp;billion in 2003 to Rp.4,178.5&nbsp;billion
in 2004. The effective tax rate slightly decreased from 33.7% of
income before tax in 2003 to 32.8% of income before tax in 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>Minority Interest in Net Income of Subsidiaries</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Minority interest in the net income of subsidiaries increased by
Rp.452.8&nbsp;billion, or 30.1%, from Rp.1,503.5&nbsp;billion in
2003 to Rp.1,956.3&nbsp;billion in 2004. The increase was
primarily due to the significant increase in the net income of
Telkomsel for 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>Net Income</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a result of the foregoing, net income increased by
Rp.527.4&nbsp;billion, or 8.7%, from Rp.6,087.2&nbsp;billion in
2003 to Rp.6,614.6&nbsp;billion in 2004. TELKOM&#146;s net
income margin decreased from 22.4% in 2003 to 19.5% in 2004. The
higher net income resulted in an increase in basic earnings per
share from Rp.302.0 in 2003 (after restatement to reflect a
<FONT style="white-space: nowrap">two-for-one</FONT> stock split
as resolved in the AGMS on July&nbsp;30, 2004) to Rp.328.1 in
2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>Equity</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Total shareholders&#146; equity increased by
Rp.815.1&nbsp;billion, or 4.7%, from Rp.17,312.9&nbsp;billion in
2003 to Rp. 18,128.0&nbsp;billion in 2004. The increase in total
shareholders&#146; equity was primarily due to the increase in
retained earnings from net income for the year 2004 of
Rp.6,614.6&nbsp;billion, partially offset by TELKOM&#146;s cash
dividends declared of Rp.3,187.0&nbsp;billion (comprising cash
dividends for 2003 of
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">107

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
Rp.3,043.6&nbsp;billion approved at the 2004 AGMS and interim
cash dividends declared in December 2004 of
Rp.143.4&nbsp;billion) and cumulative effect due to the change
in method of accounting for employee benefits as of
January&nbsp;1, 2004 of Rp.2,618.7&nbsp;billion (net of tax
effect of Rp.600.1&nbsp;billion). For the change in method of
accounting for employee benefits, see Item 5. &#147;Operating
and Financial Review and Prospects&nbsp;&#151; A.&nbsp;Operating
Results&nbsp;&#151; Changes in Methods of Accounting under
Indonesian GAAP&#148; and Note&nbsp;4a to TELKOM&#146;s
consolidated financial statements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Retained Earnings.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Appropriated and unappropriated retained earnings increased by
Rp.808.9&nbsp;billion, or 4.5%, from Rp.17,878.0&nbsp;billion in
2003 to Rp.18,686.9&nbsp;billion in 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>TELKOM&#146;s Results of Operations by Segment</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM has three main business segments: fixed wireline, fixed
wireless and cellular. Operating segments that do not
individually represent more than 10% of TELKOM&#146;s revenues
are presented as &#147;Other&#148; and comprise the telephone
directories and building management business. In 2005, a
re-alignment of management responsibilities caused a change in
segment reporting. The fixed wireless telecommunications
services business segment is now presented as a separate
segment. This change in segment has been reflected for all
periods presented below. See Note 46 to TELKOM&#146;s
consolidated financial statements.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="43%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(As restated*)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp.(billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp.(billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp.(billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>US$(million)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Fixed Wireline</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Segment results</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    External operating revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,905.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,860.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,637.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,997.7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Inter-segment operating revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>71.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>305.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,977.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,865.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,942.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,028.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Segment expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(10,350.7</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(12,207.7</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(14,378.8</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,462.7</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Segment result</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,626.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,657.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,564.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>566.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation and amortization</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,090.4</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,568.2</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,006.2</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(407.6</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of goodwill and other intangible assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(709.4</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(851.1</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(896.9</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(91.2</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other non-cash expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(210.6</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(244.4</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(292.4</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(29.7</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>*&nbsp;</TD>
    <TD align="left">
    The 2004 figures have been restated due to the adoption of
    PSAK&nbsp;24R. See&nbsp;&#151; &#147;Changes in Methods of
    Accounting under Indonesian GAAP&#148; and Note&nbsp;4a to
    TELKOM&#146;s consolidated financial statements.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">108

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="43%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(As restated*)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp.(billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp.(billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp.(billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>US$(million)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Fixed Wireless</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Segment results</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    External operating revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>163.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>575.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,449.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>147.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Inter-segment operating revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(51.1</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(167.9</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(17.1</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>214.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>524.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,281.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>130.4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Segment expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(246.2</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(789.6</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,174.7</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(221.2</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Segment result</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(32,.1</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(265.3</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(892.9</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(90.8</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation and amortization</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(35.8</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(230.0</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(537.3</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(54.7</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Write-down of assets and loss on procurement commitments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(696.1</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(70.8</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other non-cash expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(21.6</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2.2</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Cellular</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Segment results</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    External operating revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,797.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,201.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,384.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,073.7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Inter-segment operating revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>337.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>534.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>691.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>70.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,134.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,736.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,076.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,144.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Segment expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,802.3</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,757.2</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,775.0</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(892.7</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Segment result</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,332.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,979.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,301.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,251.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation and amortization</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,680.6</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,651.0</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,046.6</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(309.9</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other non-cash expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(113.9</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(100.7</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(171.2</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(17.4</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Other</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Segment results</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    External operating revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>249.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>309.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>335.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Inter-segment operating revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>51.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>70.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>280.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>360.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>405.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Segment expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(275.5</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(320.7</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(328.2</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(33.4</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Segment result</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>40.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>77.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation and amortization</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(9.8</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(18.7</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(23.3</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2.4</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of goodwill and other intangible assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(21.3</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(21.3</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(21.3</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2.2</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other non-cash expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4.3</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5.3</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4.8</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(0.5</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>*&nbsp;</TD>
    <TD align="left">
    The 2004 figures have been restated due to the adoption of
    PSAK&nbsp;24R. See&nbsp;&#151; &#147;Changes in Methods of
    Accounting under Indonesian GAAP&#148; and Note&nbsp;4a to
    TELKOM&#146;s consolidated financial statements.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">109

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Results of Segments</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Year ended December&nbsp;31,
2005 compared to year ended December&nbsp;31, 2004</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">

</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fixed Wireline
Segment</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Fixed wireline segment revenues increased by
Rp.1,077.7&nbsp;billion, or 5.7%, from Rp.18,865.1&nbsp;billion
in 2004 to Rp.19,942.8&nbsp;billion in 2005. The increase in
fixed wireline segment revenues was primarily due to an increase
in fixed wireline&#146;s interconnection revenues by
Rp.1,377.0&nbsp;billion, primarily due to increases in
international call volumes and outgoing calls to cellular users,
and data and internet revenues by Rp.329.3 billion, primarily
due to an increase in Internet connection revenues from
Telkomnet Instant and the broadband access services, partially
offset by a decrease in fixed wireline&#146;s voice revenues by
Rp.862.5&nbsp;billion, primarily due to a decrease in the call
volumes.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Fixed wireline segment expense increased by
Rp.2,171.1&nbsp;billion, or 17.8% from Rp.12,207.7&nbsp;billion
in 2004 to Rp.14,378.8&nbsp;billion in 2005. The increase in
fixed wireline segment expense was primarily due to an increase
in personnel expenses by Rp.1,436.5&nbsp;billion, or 34.1%, from
Rp.4,212.1&nbsp;billion in 2004 to Rp.5,648.6&nbsp;billion in
2005. The increase in personnel expenses was caused by the
increase in salaries and related benefits, vacation pay,
incentives and other benefits primarily due to the
implementation of a performance based remuneration system in
July 2004 which resulted in increased base salary, allowances,
incentives and bonuses. The increase in fixed wireline segment
expense was also contributed by an increase of
Rp.425.4&nbsp;billion in depreciation expense, due primarily to
a change in estimate of the remaining useful lives for WLL and
approach link equipment. See Item&nbsp;5. &#147;Operating and
Financial Review and Prospects&nbsp;&#151;&nbsp;A. Operating
Results&nbsp;&#151; Overview&nbsp;&#151; Write-down of Assets,
Depreciation Expense, Loss on Procurement Commitments, and
Operations, Maintenance and Telecommunication Services
Expenses.&#148;
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fixed Wireless
Segment</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Fixed wireless segment revenues increased by
Rp.757.5&nbsp;billion, or 144.5%, from Rp.524.3&nbsp;billion in
2004 to Rp.1,281.8&nbsp;billion in 2005. The increase in fixed
wireless segment revenues was due to the increase in fixed
wireless&#146;s voice revenues by Rp.975.5&nbsp;billion in line
with a 184.2% growth in the number of subscribers for fixed
wireless, from 1,429,368 lines in service as of
December&nbsp;31, 2004 to 4,061,867 lines in service as of
December&nbsp;31, 2005. This increase was partially offset by
the decrease in fixed wireless interconnection revenues,
resulting from a decrease in incoming and outgoing calls to and
from cellular users.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Fixed wireless segment expense increased by
Rp.1,385.1&nbsp;billion, or 175.4%, from Rp.789.6&nbsp;billion
in 2004 to Rp.2,174.7&nbsp;billion in 2005. The increase in
fixed wireless segment expense was primarily due to a write-down
of assets of Rp.616.8&nbsp;billion, loss on procurement
commitments of Rp.79.4&nbsp;billion and an increase in
depreciation expense by Rp.307.3&nbsp;billion, due primarily to
an increase in TELKOM&#146;s fixed wireless assets and a change
in estimate of the remaining useful lives for the Jakarta and
West Java BSS equipment. See Item&nbsp;5. &#147;Operating and
Financial Review and Prospects&nbsp;&#151; A.&nbsp;Operating
Results&nbsp;&#151; Overview&nbsp;&#151; Write-down of Assets,
Depreciation Expense, Loss on Procurement Commitments, and
Operations, Maintenance and Telecommunication Services
Expenses.&#148;
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cellular Segment</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Cellular segment revenues increased by Rp.6,339.5&nbsp;billion,
or 43.0%, from Rp.14,736.6&nbsp;billion in 2004 to
Rp.21,076.1&nbsp;billion in 2005. The increase in cellular
revenues was primarily due to the increase in cellular telephone
revenues by Rp.4,149.6&nbsp;billion as well as in cellular SMS
revenues by Rp.1,656.8&nbsp;billion in line with 49% growth in
Telkomsel&#146;s total cellular subscribers from 16,290,508
subscribers as of December&nbsp;31, 2004 to 24,269,353
subscribers as of December&nbsp;31, 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Cellular segment expense increased by Rp.2,017.8&nbsp;billion,
or 29.9%, from Rp.6,757.2&nbsp;billion in 2004 to
Rp.8,775.0&nbsp;billion in 2005. The increase in cellular
segment expense was primarily due to increases in
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
operations, maintenance and telecommunications services expenses
and depreciation expense by Rp.1,116.5&nbsp;billion and
Rp.395.6&nbsp;billion, respectively, in line with the growth in
Telkomsel&#146;s overall capacity from 17.9&nbsp;million
subscribers as of December&nbsp;31, 2004 to 26.2&nbsp;million
subscribers as of December&nbsp;31, 2005 as well as the number
of Telkomsel&#146;s BTSs from 6,205&nbsp;units as of
December&nbsp;31, 2004 to 9,895&nbsp;units as of
December&nbsp;31, 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other Segment</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Other segment revenues increased by Rp.44.9&nbsp;billion, or
12,4%, from Rp.360.8&nbsp;billion in 2004 to
Rp.405.7&nbsp;billion in 2005, due to the increase in
Infomedia&#146;s call center service revenue by
Rp.43.1&nbsp;billion.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Other segment expense increased by Rp.7.5&nbsp;billion, or 2.3%,
from Rp.320.7&nbsp;billion in 2004 to Rp.328.2&nbsp;billion in
2005, primarily due to an increase in the printing costs of
Infomedia.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Year ended December&nbsp;31,
2004 compared to year ended December&nbsp;31, 2003</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Fixed Wireline
Segment</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Fixed wireline segment revenues increased by
Rp.2,888.1&nbsp;billion, or 18.1%, from Rp,
15,977.0&nbsp;billion in 2003 to Rp18,865.1&nbsp;billion in
2004. The increase in fixed wireline segment revenues was
primarily due to increases in fixed wireline&#146;s voice,
interconnection, and data and Internet revenues by Rp.1,234.2
billion, Rp.1,788.0 billion and Rp.355.4 billion, respectively,
primarily due to the consolidation of KSO&nbsp;IV revenues
following the acquisition of KSO&nbsp;IV in January&nbsp;2004,
an increase in fixed wireline tariffs in 2004 by a weighted
average increase of 9% as well as the launch of TELKOM&#146;s
IDD service (TIC 007) in June&nbsp;2004 and the increased usage
volume of dial-up Internet, frame relay and VPN in Indonesia.
The increase was partially offset by a decrease in KSO revenues
by Rp.840.3&nbsp;billion, primarily reflecting TELKOM&#146;s
share in distributable KSO&nbsp;IV revenues and TELKOM&#146;s
right to receive MTR that were no longer received by TELKOM
following the acquisition of KSO&nbsp;IV.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Fixed wireline segment expense increased by
Rp.1,857.0&nbsp;billion, or 17.9% from Rp.10,350.7&nbsp;billion
in 2003 to Rp.12,207.7&nbsp;billion in 2004. The increase in
fixed wireline segment expense was primarily due to an increase
in personnel expenses, depreciation expense, operations,
maintenance and telecommunications services expenses, and
general and administration expenses by Rp.316.2 billion,
Rp.487.8 billion, Rp.495.7 billion and Rp.406.5 billion,
respectively, primarily due to the consolidation of KSO&nbsp;IV
expenses in the consolidated financial statements following the
acquisition of KSO&nbsp;IV in January&nbsp;2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fixed Wireless
Segment</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Fixed wireless segment revenues increased by
Rp.310.2&nbsp;billion, or 144.9%, from Rp.214.1&nbsp;billion in
2003 to Rp.524.3&nbsp;billion in 2004. The increase in fixed
wireless segment revenues was primarily due to the increase in
fixed wireless&#146;s voice revenues by Rp.500.2 billion in line
with a 439.8% growth in the number of subscribers and lines in
service for fixed wireless, from 264,787 lines in service as of
December&nbsp;31, 2003 to 1,429,368 lines in service as of
December&nbsp;31, 2004. This increase was partially offset by
the decrease in interconnection revenues by Rp.189.9 billion.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Fixed wireless segment expense increased by
Rp.543.4&nbsp;billion, or 220.8%, from Rp.246.2&nbsp;billion in
2003 to Rp.789.6&nbsp;billion in 2004. The increase in fixed
wireless segment expense was primarily due to increases in
depreciation expense by Rp.194.2&nbsp;billion and operations,
maintenance and telecommunications services expenses by
Rp.233.3&nbsp;billion, in line with the increase in
TELKOM&#146;s fixed wireless assets due to TELKOM&#146;s
aggressive deployment of fixed wireless.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cellular Segment</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Cellular segment revenues increased by Rp.3,601.9&nbsp;billion,
or 32.3%, from Rp.11,134.7&nbsp;billion in 2003 to
Rp.14,736.6&nbsp;billion in 2004. The increase in cellular
revenues was primarily due to the increase in cellular telephone
revenues by Rp.1,962.5&nbsp;billion as well as cellular SMS
revenues by
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
Rp.1,295.7&nbsp;billion in line with a 70% growth in
Telkomsel&#146;s total cellular subscribers from 9,588,807
subscribers as of December&nbsp;31, 2003 to 16,290,508
subscribers as of December&nbsp;31, 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Cellular segment expense increased by Rp.1,954.9&nbsp;billion,
or 40.7% from Rp.4,802.3&nbsp;billion in 2003 to
Rp.6,757.2&nbsp;billion in 2004. The increase in cellular
segment expense was primarily due to the increase in
depreciation expense by Rp.970.4&nbsp;billion and in operations,
maintenance and telecommunications services expenses by
Rp.629.4&nbsp;billion, in line with the growth of
Telkomsel&#146;s overall capacity from 10.8&nbsp;million
subscribers as of December&nbsp;31, 2003 to 17.9&nbsp;million
subscribers as of December&nbsp;31, 2004 as well as the number
of Telkomsel&#146;s BTSs from 4,820&nbsp;units as of
December&nbsp;31, 2003 to 6,205&nbsp;units as of
December&nbsp;31, 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>Other Segment</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Other Segment revenues increased by Rp.80.1&nbsp;billion, or
28.5%, from Rp.280.7&nbsp;billion in 2003 to
Rp.360.8&nbsp;billion in 2004. The increase in other segment
revenues was primarily due to the increase in Informedia&#146;s
directory assistance service revenues by Rp.64.5&nbsp;billion.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Other segment expense increased by Rp.45.2&nbsp;billion, or
16.4%, from Rp.275.5&nbsp;billion in 2003 to
Rp.320.7&nbsp;billion in 2004. The increase in other segment
expense was primarily due to the increase in Infomedia&#146;s
personnel expenses, marketing expenses and general and
administration expenses by Rp.16.0 billion, Rp.11.2 billion and
Rp.7.6 billion, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Reconciliation to U.S.&nbsp;GAAP</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM prepares its consolidated financial statements in
accordance with Indonesian GAAP and prepares a reconciliation of
consolidated net income and stockholders&#146; equity in
accordance with U.S.&nbsp;GAAP pursuant to the requirements of
the U.S.&nbsp;Securities and Exchange Commission. The following
table sets out consolidated net income for the years ended and
consolidated stockholders&#146; equity as of December&nbsp;31,
2003, 2004 and 2005 in accordance with Indonesian GAAP and
U.S.&nbsp;GAAP:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="38%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(As restated)<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>US$ (million)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Net income in accordance with</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Indonesian GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,087.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,614.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,993.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>813.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,790.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,468.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,840.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>797.6</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="38%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(As restated)<SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>US$ (million)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Stockholders&#146; equity in accordance with</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Indonesian GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,312.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,128.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23,292.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,369.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,284.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,570.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,568.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,499.3</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Net income for the year ended December&nbsp;31, 2004 under
    Indonesian GAAP has been restated due to the adoption of
    PSAK&nbsp;24R (see Item&nbsp;5. &#147;Operating and Financial
    Review and Prospects&nbsp;&#151; A.&nbsp;Operating
    Results&nbsp;&#151; Changes in Methods of Accounting under
    Indonesian GAAP&#148; and Note&nbsp;4a to the Company&#146;s
    consolidated financial statements).</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Equity as of December&nbsp;31, 2004 under Indonesian GAAP has
    been restated due to the adoption of PSAK 24R (see Item&nbsp;5.
    &#147;Operating and Financial Review and Prospects&nbsp;&#151;
    A. Operating Results&nbsp;&#151; Changes in Methods of
    Accounting under Indonesian GAAP&#148; and Note&nbsp;4a to the
    Company&#146;s consolidated financial statements).</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">112

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Summary of Significant Differences Between Indonesian GAAP
and U.S.&nbsp;GAAP</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s consolidated financial statements have been
prepared in accordance with Indonesian GAAP, which differs in
certain significant respects from U.S.&nbsp;GAAP. The
significant differences are summarized below and are described
in Note&nbsp;54 to the Company&#146;s consolidated financial
statements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s consolidated financial statements prepared in
accordance with Indonesian GAAP as of and for the year ended
December&nbsp;31, 2004 and the related selected financial data
for 2004 in its 2005 Annual Report on
Form&nbsp;<FONT style="white-space: nowrap">20-F</FONT> have
been restated in connection with the adoption of PSAK&nbsp;24R.
See Item&nbsp;5. &#147;Operating and Financial Review and
Prospects&nbsp;&#151; A. Operating Results&nbsp;&#151; Changes
in Methods of Accounting under Indonesian GAAP&#148; and
Note&nbsp;4a to the Company&#146;s consolidated financial
statements. While the restatement affected previously reported
consolidated net income and stockholders&#146; equity under
Indonesian&nbsp;GAAP, there was no net effect on consolidated
net income and stockholders&#146; equity under U.S.&nbsp;GAAP as
previously reported. However, certain reconciling line items in
arriving at net income and stockholders&#146; equity under
U.S.&nbsp;GAAP have been revised.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Termination Benefits</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Indonesian GAAP, termination benefits are recognized as
liabilities when certain criteria are met (e.g. the enterprise
is demonstratively committed to provide termination benefits as
a result of an offer made in order to encourage early
retirement).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under U.S.&nbsp;GAAP, termination benefits are recognized as
liabilities when the employees accept the offer and the amount
can be reasonably estimated.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a result, on a U.S.&nbsp;GAAP basis, the Company&#146;s
consolidated income before tax due to termination benefits would
have been Rp.671.0&nbsp;billion lower in 2003 and no change in
2004 and 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>Foreign Exchange Differences Capitalized to Property under
Construction</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Indonesian GAAP, the foreign exchange gains and losses
resulting from borrowings used to finance property under
construction are capitalized. Capitalization of foreign exchange
gains and losses ceases when the construction of the qualifying
asset is substantially completed and the constructed property is
ready for its intended use.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under U.S.&nbsp;GAAP, foreign exchange gains and losses are
charged to current operations. Consequently, on a U.S.&nbsp;GAAP
basis, the Company&#146;s consolidated income before tax would
have been Rp.76.8&nbsp;billion higher in 2003,
Rp.1.6&nbsp;billion higher in 2004 and Rp.77.0&nbsp;billion
higher in 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>Interest Capitalized on Property under Construction</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Indonesian GAAP, qualifying assets, to which interest cost
can be capitalized, should be those that take a substantial
period of time to get ready for its intended use or
sale,&nbsp;i.e., minimum 12&nbsp;months. To the extent that
funds are borrowed specifically for the purpose of obtaining a
qualifying asset, the amount of interest cost eligible for
capitalization on that asset should be determined based on the
actual interest cost incurred on that borrowing during the
period of construction less any investment income on the
temporary investment of those borrowings.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under U.S.&nbsp;GAAP, there is no minimum limit (i.e.
<FONT style="white-space: nowrap">12-month</FONT> requirement)
on the length of the construction period in which the interest
cost could be capitalized. Interest income arising from any
unused borrowings is recognized directly to current operations.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a result, on a U.S.&nbsp;GAAP basis, the Company&#146;s
consolidated income before tax would have been
Rp.39.1&nbsp;billion higher in 2003, Rp.26.8&nbsp;billion higher
in 2004 and Rp.23.8&nbsp;billion higher in 2005.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">113

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>Revenue-Sharing Arrangements</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 arrangements
in the accounting records of the party to whom ownership in such
properties will 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
<FONT style="white-space: nowrap">revenue-sharing</FONT> period.
The Company records its share of the revenues earned net of
amounts due to the investors.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under U.S.&nbsp;GAAP, the revenue-sharing arrangements are
recorded in a manner similar to capital leases where the fixed
assets and obligation under revenue-sharing arrangements are
reflected on the balance sheet. All the revenues generated from
the revenue-sharing arrangements are recorded as a component of
operating revenues, while a portion of the investors&#146; share
of revenue from the revenue-sharing arrangements is recorded as
interest expense and the balance is treated as a reduction of
the obligation under revenue-sharing arrangements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In connection with the different treatment of revenue-sharing
arrangements under U.S.&nbsp;GAAP and Indonesian GAAP, the
Company&#146;s consolidated income before tax under
U.S.&nbsp;GAAP would have been Rp.23.2&nbsp;billion higher in
2003, Rp.155.4&nbsp;billion higher in 2004 and
Rp.69.2&nbsp;billion higher in 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>Employee Benefit Plans</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of January&nbsp;1, 2005, the Company adopted PSAK&nbsp;24R in
accounting for pension benefit cost,
<FONT style="white-space: nowrap">post-retirement</FONT> health
care benefit cost and long service award benefit cost for
Indonesian GAAP purposes. PSAK&nbsp;24R requires the adoption of
its provisions retrospectively as of January&nbsp;1, 2004. Prior
to 2004, there were no differences between Indonesian GAAP and
U.S. GAAP with respect to the accounting for
<FONT style="white-space: nowrap">post-retirement</FONT> health
care benefit cost and long service award benefit cost. However,
the differences with respect to pension benefit cost were as
follows:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>i.</TD>
    <TD align="left">
    Under Indonesian GAAP, the prior service cost attributable to
    the increases in pension benefits for pensioners were directly
    charged to expense in those years. Under U.S. GAAP, because the
    majority of plan participants are still active, such prior
    service cost is deferred and amortized systematically over the
    estimated remaining service period for active employees.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>ii.</TD>
    <TD align="left">
    Under Indonesian GAAP, the Company amortized the cumulative
    unrecognized actuarial gain or loss over four&nbsp;years. Under
    U.S. GAAP, any cumulative unrecognized actuarial gain or loss
    exceeding 10&nbsp;percent of the greater of projected benefit
    obligation or fair value of plan assets is recognized in the
    statement of income on a straight-line basis over the expected
    average remaining service period.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>iii.</TD>
    <TD align="left">
    Under Indonesian GAAP, recognition of a minimum liability is not
    required. Under U.S. GAAP, the Company would be required to
    recognize an additional minimum liability when the accumulated
    benefit obligation exceeds the fair value of the plan assets,
    and an equal amount would be recognized as an intangible asset,
    provided that the asset recognized does not exceed the amount of
    unrecognized prior service&nbsp;cost.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Starting in 2004, the differences between the Company&#146;s
accounting for pension benefit cost, post-retirement health care
benefit cost and long service award benefit cost under
Indonesian GAAP and U.S. GAAP are as follows:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>i.</TD>
    <TD align="left">
    Under Indonesian GAAP, the prior service cost is recognized
    immediately if vested or amortized over the vesting period.
    Under U.S. GAAP, prior service cost (vested and
    <FONT style="white-space: nowrap">non-vested</FONT> benefits) is
    generally deferred and amortized systematically over the
    estimated remaining service period for active employees.</TD>
</TR>

</TABLE>

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<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>ii.</TD>
    <TD align="left">
    Different dates of implementation caused significant differences
    in cumulative unrecognized actuarial gains and losses. However,
    the cumulative unrecognized actuarial gains and losses under
    Indonesian GAAP is now recognized in a manner similar to U.S.
    GAAP.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>iii.</TD>
    <TD align="left">
    Under Indonesian GAAP, the transition obligation was recognized
    on January&nbsp;1, 2004, the date PSAK&nbsp;24R was adopted.
    Under U.S. GAAP, the transition obligation is deferred and
    amortized systematically over the estimated remaining service
    period for active employees.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>iv.</TD>
    <TD align="left">
    The difference between Indonesian GAAP and U.S. GAAP in
    connection with the recognition of minimum liability remains
    unchanged.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a result, the Company&#146;s consolidated income before tax
under U.S.&nbsp;GAAP would have been Rp.109.3&nbsp;billion lower
in 2003, Rp.346.9&nbsp;billion lower in 2004 and
Rp.300.3&nbsp;billion lower in 2005. See Note&nbsp;54 to
TELKOM&#146;s consolidated financial statements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>Equity in Net Income or Loss of Associated
Companies</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company records its equity in net income or loss of
associated companies based on the associates&#146; financial
statements that have been prepared under Indonesian GAAP.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For U.S.&nbsp;GAAP reporting purposes, the Company recognizes
the effect of the differences between U.S.&nbsp;GAAP and
Indonesian GAAP at the investee level in the investment accounts
and its share of the net income or loss and other comprehensive
income or loss of those associates.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a result, on a U.S.&nbsp;GAAP basis, the Company&#146;s
consolidated income before tax would have been
Rp.0.2&nbsp;billion lower in 2003, Rp.0.2&nbsp;billion lower in
2004 and Rp.0.2&nbsp;billion lower in 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>Land Rights</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In Indonesia, the title of land rests with the State under the
Basic Agrarian Law No.&nbsp;5 of 1960. Land use is accomplished
through land rights whereby the holder of the right enjoys the
full use of the land for a stated period of time, subject to
extensions. The land rights generally are freely tradeable and
may be pledged as security under borrowing agreements. Under
Indonesian GAAP, land ownership is not depreciated unless it can
be foreseen that the possibility for the holder to obtain an
extension or renewal of the rights is remote.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under U.S.&nbsp;GAAP, the cost of land rights is amortized over
the economic useful life which represents the contractual period
of the land rights.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a result, the Company&#146;s consolidated income before tax
would have been Rp.10.2&nbsp;billion lower in 2003,
Rp.13.9&nbsp;billion lower in 2004 and Rp.4.9&nbsp;billion lower
in 2005 under U.S.&nbsp;GAAP reporting.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>Revenue Recognition</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Indonesian GAAP, revenue from cellular and fixed wireless
services connection fees are recognized as income when the
connection takes place (for postpaid service) or at the time of
delivery of starter packs to distributors, dealers or customers
(for prepaid service). Installation fees for wireline services
are recognized at the time of installation. The revenue from
calling cards (&#147;Kartu Telepon&#148;) is recognized when the
Company sells the card.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under U.S.&nbsp;GAAP, revenue from
<FONT style="white-space: nowrap">front-end</FONT> fees and
incremental costs up to, but not exceeding such fees, are
deferred and recognized over the expected term of the customer
relationship. Revenues from calling cards are recognized upon
usage or expiration.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consequently, the Company&#146;s consolidated income before tax
under U.S.&nbsp;GAAP would have been Rp.53.2&nbsp;billion lower
in 2003, Rp.54.2&nbsp;billion higher in 2004 and
Rp.5.0&nbsp;billion higher in 2005.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>Goodwill</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Indonesian GAAP, goodwill is amortized over a period, not
exceeding 20&nbsp;years, that it is expected to benefit the
Company.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under U.S.&nbsp;GAAP, goodwill is not amortized but rather
subjected to an annual test for impairment.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consequently, the Company&#146;s consolidated income before tax
under U.S.&nbsp;GAAP would have been Rp.21.3&nbsp;billion higher
in 2003, Rp.21.3&nbsp;billion higher in 2004 and
Rp.21.3&nbsp;billion higher in 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>Capital Leases</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Indonesian GAAP, a leased asset is capitalized only if all
of the following criteria are met: (a)&nbsp;the lessee has an
option to purchase the leased asset at the end of the lease
period at a price agreed upon at the inception of the lease
agreement, and (b)&nbsp;the sum of periodic lease payments, plus
the residual value, will cover the acquisition price of the
leased asset and related interest, and (c)&nbsp;there is a
minimum lease period of 2&nbsp;years.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under U.S.&nbsp;GAAP, a leased asset is capitalized if one of
the following criteria is met: (a)&nbsp;there is an automatic
transfer of ownership at the end of the lease term; or
(b)&nbsp;the lease contains a bargain purchase option; or
(c)&nbsp;the lease term is for 75% or more of the economic life
of the asset; or (d)&nbsp;the net present value of minimum lease
payments are at least 90% of the fair value of the asset.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consequently, the Company&#146;s consolidated income before tax
under U.S.&nbsp;GAAP would have been Rp.6.9&nbsp;billion higher
in 2003, Rp.3.4&nbsp;billion lower in 2004 and
Rp.47.5&nbsp;billion lower in 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>Acquisition of Dayamitra</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On May&nbsp;17, 2001, the Company acquired a 90.32% interest in
Dayamitra and contemporaneously acquired a call option to buy
the other 9.68% interest at a fixed price at a stated future
date, and provided to the minority interest holder a put option
to sell the other 9.68% to the Company under those same terms;
meaning the fixed price of the call is equal to the fixed price
of the put option. Under U.S.&nbsp;GAAP, the Company should
account for the option contracts on a combined basis with the
minority interest and account for it as a financing of the
purchase of the remaining 9.68% minority interest. As such,
under U.S.&nbsp;GAAP, the Company has consolidated 100% of
Dayamitra and attributed the stated yield earned under the
combined derivative and minority interest position to interest
expense since May&nbsp;17, 2001.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;14, 2004, the Company exercised the call option
to acquire the remaining 9.68% interest in Dayamitra.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Indonesian GAAP, prior to December&nbsp;14, 2004, the
Company accounted for the remaining 9.68% of Dayamitra as
minority interest. In addition, the option price that had been
paid by the Company was presented as &#147;Advance payments for
investments in shares of stock.&#148; The Company started
consolidating the remaining 9.68% of Dayamitra on
December&nbsp;14, 2004 following the exercise of the option.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The differences in the timing of the 9.68% ownership interest
recognition gives rise to differences in the timing and amounts
of purchase consideration and liability recognized under
Indonesian GAAP and U.S.&nbsp;GAAP.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consequently, the Company&#146;s consolidated income before tax
under U.S.&nbsp;GAAP would have been Rp.24.5&nbsp;billion lower
in 2003, Rp.72.4&nbsp;billion lower in 2004 and
Rp.5.1&nbsp;billion higher in 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>Reversal of Difference Due to Change of Equity in
Associated Companies</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Indonesian GAAP, differences previously credited directly
to equity as a result of equity transactions in associated
companies are released to the statement of income upon the sale
of an interest in the associate in proportion with the
percentage of the interest sold.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under U.S.&nbsp;GAAP, it is the Company&#146;s policy to include
differences resulting from equity transactions in associated
companies in equity. Such amounts cannot be released to the
statement of income and consequently remain in equity
indefinitely.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consequently, the Company&#146;s consolidated income before tax
under U.S.&nbsp;GAAP would have been Rp.38.4&nbsp;billion lower
in 2003, and no change in 2004 and 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>Asset Retirement Obligations</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Indonesian GAAP, legal obligations associated with the
retirement of
<FONT style="white-space: nowrap">long-lived</FONT> assets that
result from the acquisition, construction, development and/or
the normal operation of
<FONT style="white-space: nowrap">long-lived</FONT> assets are
charged to current operations as incurred.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under U.S.&nbsp;GAAP, the estimated fair value of such
obligations is accrued at the time of acquisition with an equal
amount capitalized to the related long-lived assets and
depreciated over the useful life of the assets. The Company and
its subsidiaries identified their asset retirement obligations
by reviewing contractual agreements to identify whether the
Company and its subsidiaries are required to settle any
obligations as a result of the prevailing laws, statute,
ordinance, written or by legal construction of a contract under
the doctrine of promissory estoppel.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consequently, the Company&#146;s consolidated income before tax
under U.S. GAAP would have been Rp.0.8&nbsp;billion lower in
2003, Rp.0.8&nbsp;billion lower in 2004 and Rp.0.8&nbsp;billion
lower in 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>Deferred Income Taxes</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Indonesian GAAP, the Company does not recognize deferred
taxes on temporary differences between the financial statement
carrying amounts and tax bases of equity method investments when
it is not probable that these differences will reverse in the
foreseeable future.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under U.S.&nbsp;GAAP, deferred taxes are recognized in full on
temporary differences between the financial statement carrying
amounts and tax bases of equity method investments.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consequently, the Company&#146;s consolidated net income under
U.S. GAAP would have been Rp.119.5&nbsp;billion higher in 2003,
Rp.11.2&nbsp;billion lower in 2004 and Rp.3.2&nbsp;billion lower
in 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>Impairment of Assets</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Indonesian GAAP, an impairment loss is recognized whenever
the carrying amount of an asset or its
<FONT style="white-space: nowrap">cash-generating</FONT> unit
exceeds its recoverable amount. The recoverable amount of a
fixed asset is the greater of its net selling price or value in
use. In assessing value in use, the estimated future cash flows
are discounted to their present value using a
<FONT style="white-space: nowrap">pre-tax</FONT> discount rate
that reflects current market assessments of the time value of
money and the risks specific to the asset. An impairment loss
can be reversed if there has been a change in the estimates used
to determine the recoverable amount. An impairment loss is only
reversed to the extent that the asset&#146;s carrying amount
does not exceed the carrying amount that would have been
determined, net of depreciation, if no impairment loss had been
recognized.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under U.S.&nbsp;GAAP, an impairment loss is recognized whenever
the sum of the expected future cash flows (undiscounted and
without interest charges) is less than the carrying amount of
the asset. An impaired asset is written down to its estimated
fair value based on quoted market prices in active markets or
discounting estimated future cash flows. When an impairment loss
is recognized, the adjusted carrying amount of fixed asset
becomes its new cost basis and reversals of previously
recognized impairment losses are prohibited.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Through the year ended December&nbsp;31, 2004, there were no
impairment charges recognized by the Company. In 2005, the
Company recognized impairment charges on BSS equipment which are
part of transmission installation and equipment of fixed
wireless assets. The sum of the expected future cash flows
(undiscounted and without interest charges) relating to these
impaired assets is less than the
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">117
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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
carrying amount of the assets and therefore, for U.S.&nbsp;GAAP
reporting purposes, these assets have been written down to their
estimated fair values based on discounted estimated future cash
flows. The estimated fair values of the impaired assets
determined under U.S.&nbsp;GAAP are the same as those determined
under Indonesian GAAP; accordingly, there were no differences
between Indonesian GAAP and U.S.&nbsp;GAAP.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Gain (loss) on Disposal of Property, Plant and
    Equipment</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Indonesian GAAP, the Company classifies gain (loss) on
disposal of property, plant and equipment as a component of
other income (expenses) which is excluded from determination of
operating income.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under U.S.&nbsp;GAAP, gain (loss) on disposal of property, plant
and equipment is classified as a component of operating expenses
and hence included in the determination of operating income.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consequently, the Company&#146;s operating income under
U.S.&nbsp;GAAP would have been Rp.182.9&nbsp;billion higher in
2003, Rp.26.1&nbsp;billion lower in 2004 and
Rp.46.2&nbsp;billion higher in 2005, and other income (expenses)
would have been lower (higher) by the same amounts in each of
2003, 2004 and 2005, respectively, due to the inclusion of the
gain (loss) on disposal of property, plant and equipment in the
determination of operating income.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Reversal of Difference in Value of Restructuring
    Transactions Between Entities Under Common Control</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Indonesian GAAP, the Company is required to reclassify the
difference in value of restructuring transactions between
entities under common control as of January&nbsp;1, 2005 as a
direct adjustment to retained earnings when the common control
relationship between the transacting parties no longer exists as
of January&nbsp;1, 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under U.S. GAAP, difference in value of restructuring
transactions between entities under common control remains in
equity indefinitely as part of the additional paid-in capital.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The amounts included in the reconciliation below show the income
tax effects of the differences between Indonesian GAAP and
U.S.&nbsp;GAAP as described above.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A summary of the significant adjustments to consolidated net
income for the years ended December&nbsp;31, 2003, 2004 and 2005
and to consolidated stockholders&#146; equity as of
December&nbsp;31, 2004 and 2005 which would be required if
U.S.&nbsp;GAAP had been applied, instead of Indonesian GAAP, in
the consolidated financial statements are set forth below:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="51%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(As restated)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. million</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. million</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. million</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income according to the consolidated statements of income
    prepared under Indonesian
    GAAP<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,087,227</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,614,568</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,993,566</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;GAAP adjustments&nbsp;&#151; increase (decrease) due
    to:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Termination benefits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(670,981</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capitalization of foreign exchange gains and losses, net of
    related depreciation of (Rp.76,756) million, (Rp.75,870) million
    and (Rp.77,010) million, respectively</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>76,756</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,587</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>77,010</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest capitalized on property under construction, net of
    related depreciation of (Rp.8,787) million,
    (Rp.13,392)&nbsp;million and (Rp.17,275) million, respectively</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39,077</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,802</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23,825</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenue-sharing arrangements</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23,159</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>155,369</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>69,173</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pension</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(109,334</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(148,517</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(104,877</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Post-retirement health care</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(75,964</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(104,466</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long service awards</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(122,462</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(90,933</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity in net income (loss) of associated companies</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(170</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(177</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(192</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of land rights</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(10,212</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(13,907</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,881</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenue recognition</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(53,226</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>54,159</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,046</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Goodwill</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,270</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,270</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,270</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capital leases</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,882</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,435</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(47,524</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Adjustment for consolidation of Dayamitra</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(24,476</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(72,361</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,084</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Reversal of difference due to change of equity in associated
    companies</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(38,425</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Asset retirement obligations</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(848</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(848</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(848</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred income tax:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred income tax on equity method investments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>119,456</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11,234</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,206</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred income tax effect on U.S.&nbsp;GAAP adjustments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>323,089</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>61,742</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,288</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(297,983</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(127,976</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(137,231</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Minority interest</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,396</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(18,019</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(16,244</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net adjustments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(296,587</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(145,995</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(153,475</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income in accordance with U.S.&nbsp;GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,790,640</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,468,573</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,840,091</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income per share&nbsp;&#151; in full Rupiah amount</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>287.23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>320.86</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>388.89</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income per ADS&nbsp;&#151; in full Rupiah amount (40
    Series&nbsp;B shares per ADS)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,489.40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,834.47</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,555.74</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Net income for the year ended December&nbsp;31, 2004 under
    Indonesian GAAP has been restated due to the adoption of
    PSAK&nbsp;24R (see Note&nbsp;4a to the consolidated financial
    statements).</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">119

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="61%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(As restated)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. million</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. million</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stockholders&#146; equity according to the consolidated balance
    sheets prepared under Indonesian
    GAAP<SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,128,036</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23,292,401</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;GAAP adjustments&nbsp;&#151; increase (decrease) due
    to:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capitalization of foreign exchange differences&nbsp;&#151; net
    of related depreciation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(548,886</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(471,876</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest capitalized on property under construction&nbsp;&#151;
    net of related depreciation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>128,614</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>152,439</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenue-sharing arrangements</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(292,327</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(223,154</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pension</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,973,837</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,851,509</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Post-retirement health care</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,142,561</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,038,095</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long service awards</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(122,462</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(213,395</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity in net income (loss) of associated companies</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(18,429</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(18,621</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of land rights</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(79,118</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(83,999</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenue recognition</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(714,389</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(709,343</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Goodwill</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>63,809</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>85,079</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capital leases</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,688</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(29,836</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Adjustment for consolidation of Dayamitra</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(61,728</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(56,644</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Asset retirement obligations</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,696</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,544</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred income tax:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred income tax on equity method investments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39,343</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35,040</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred income tax effect on U.S.&nbsp;GAAP adjustments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(89,704</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(66,182</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,437,113</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,286,568</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Minority interest</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,763</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(10,481</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net adjustments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,442,876</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,276,087</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stockholders&#146; equity in accordance with U.S.&nbsp;GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,570,912</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,568,488</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Stockholders&#146; equity as of December&nbsp;31, 2004 under
    Indonesian GAAP has been restated due to the adoption of PSAK
    24R (see Note&nbsp;4a to the consolidated financial statements).</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liquidity and Capital
Resources</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM expects to have substantial liquidity and capital
resources requirements in the short and long term as it
continues to develop and expand its existing businesses,
including entering into new businesses. TELKOM expects that
these expenditures will be important factors in preparing to
face tight competition as the Indonesian telecommunications
market has been deregulated and maintaining its current position
as the leading Indonesian telecommunications and
<FONT style="white-space: nowrap">full-service</FONT> network
provider.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM expects its principal liquidity and capital resources
requirements, aside from its requirements for working capital
and to make payments of dividends and taxes, will at least
consist of the following:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    capital expenditures for existing and new network and backbone
    infrastructure, including a backbone transmission network on
    Ring JASUKA (Jawa, Sumatra and Kalimantan), Submarine Cable JDM
    <FONT style="white-space: nowrap">(Jember-Denpasar-Mataram),</FONT>
    the expansion of TELKOM&#146;s CDMA wireless access networks,
    the expansion of Submarine Cable SUB
    <FONT style="white-space: nowrap">(Surabaya-UjungPandang-Banjarmasin),</FONT>
    an additional ground satellite segment in Jakarta, fiber optic
    transmission network
    <FONT style="white-space: nowrap">Medan-Padang,</FONT></TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">120

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    softswitch development, the installation and upgrading of fixed
    lines and increased capacity in its mobile cellular service
    conducted through Telkomsel (see &#147;&#151;&nbsp;Capital
    Expenditures&#148;);</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    debt service requirements relating to existing indebtedness,
    including <FONT style="white-space: nowrap">two-step</FONT>
    loans, its <FONT style="white-space: nowrap">short-term</FONT>
    loan with Bank Central Asia and Bank Niaga, and its
    <FONT style="white-space: nowrap">medium-term</FONT> notes of
    Rp.610&nbsp;billion, IDR bonds of Rp.1 trillion, loan facility
    from Bank Central Asia in relation to the construction of
    Sumatera backbone network, loan from a consortium of banks for
    the Regional Division V junction project, loans from Citibank
    N.A. through its Hermes Export facility, High Performance
    Backbone facility and EKN-Backed facility and a loan from the
    Export and Import Bank of Korea in connection with the CDMA
    project and loan facilities of Rp.40,000&nbsp;million and
    Rp.2,500&nbsp;million from Bank Mandiri;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    installment payments of the purchase price for shares of
    AriaWest which are expected to be fully paid by January&nbsp;31,
    2009;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    payments of contribution to TELKOM&#146;s defined benefit
    pension plan and post-retirement health care plan;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    fixed monthly payments to MGTI pursuant to the amended and
    restated agreement for KSO IV, commencing February 2004 and
    terminating in 2010; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    payment of call option price through monthly payment beginning
    in December 2004 and ending March 2006 relating to the
    acquisition of 9.68% shares of Dayamitra.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Liquidity and capital resources will also be required for TELKOM
to change its current DLD access code as a result of the end of
TELKOM&#146;s exclusive right to provide DLD services, with
possible expenditures for the creation of a new routing database
and costs for customer education and marketing. TELKOM will be
required to fully implement this change in its DLD access code
by April&nbsp;1, 2010. See Item&nbsp;4. &#147;Information on the
Company&nbsp;&#151; B. Business Overview&nbsp;&#151;
Regulations&nbsp;&#151; DLD and IDD Services.&#148;
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, liquidity and capital resources will be required
for the share repurchase plan. See Item&nbsp;7. &#147;Major
Stockholders and Related Party Transactions&nbsp;&#151; A. Major
stockholders&nbsp;&#151; General.&#148;
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Primary sources of financing available to TELKOM consist of:
(i)&nbsp;cash flow from operating activities;
(ii)&nbsp;financing from bonds issuance; (iii)&nbsp;financing
from banks or export credit agencies (including financing
procured by vendors); and (iv)&nbsp;deferred vendor payment
arrangements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM believes that these sources of financing will be
sufficient to fund planned capital expenditures, anticipated
working capital needs and likely contractual obligations and
commitments in the short and long term. Nonetheless, if global
or Indonesian economic conditions worsen or do not improve,
competition or product substitution accelerates beyond current
expectations or the value of the Rupiah depreciates
significantly against the U.S.&nbsp;Dollar, TELKOM&#146;s net
cash flow from operating activities may decrease and the amount
of required capital expenditures in Rupiah terms may increase,
any of which may negatively impact its liquidity.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM manages the liquidity for all of its businesses,
including KSOs controlled by TELKOM, on a total group basis.
However, Telkomsel manages its own liquidity and accesses
capital resources, independently of TELKOM.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
With regard to Telkomsel, its management expects to continue
focusing on enhancing and expanding Telkomsel&#146;s network
capacity and infrastructure. It is expected that these
expenditures will allow Telkomsel to maintain its position as
the leading provider of mobile cellular services in Indonesia in
an increasingly competitive market for such services. In recent
years, Telkomsel&#146;s primary source of financing has been
cash flow from operating activities. Telkomsel&#146;s management
believes that Telkomsel will continue to generate sufficient
cash flow from its operating activities to fund planned capital
expenditures in the short and long term.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">121

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Defaults and Waivers of
Defaults under our Debt Facilities</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2005 we were in breach of certain covenants in our High
Performance Backbone debt facilities from Citibank and Bank
Central Asia (BCA), and the indenture in connection with our IDR
bonds of Rp.1&nbsp;trillion which require us not to make any
loans to or for the benefit of any person which in the aggregate
exceed a certain amount. We have obtained written waivers from
Citibank International plc, acting as agent for lenders under
the relevant facility agreements, BCA and PT&nbsp;Bank Rakyat
Indonesia Tbk.(BRI), acting as trustee of the IDR bonds.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Net Cash Flows</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth information concerning
TELKOM&#146;s consolidated cash flows, as set out in (and
prepared on the same basis as) the consolidated financial
statements, except for foreign exchange convenience translations
(see &#147;&#151;&nbsp;Basis of Presentation&nbsp;&#151; Foreign
Exchange Translations&#148;):
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>US$ (million)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net cash flows:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;from operating activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,852.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,051.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,102.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,146.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;from investing activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,305.9</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(9,598.1</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(12,212.7</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,242.4</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;from financing activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,177.4</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,904.9</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,339.4</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(848.4</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Change in cash and cash equivalents</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(630.8</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(451.5</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>550.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>56.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Effect of foreign exchange changes on cash and cash equivalents</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>213.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(32.0</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3.3</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash and cash equivalents, beginning of year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,699.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,094.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,856.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>494.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash and cash equivalents, end of year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,094.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,856.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,374.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>546.7</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net Cash Flows from
Operating Activities</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM&#146;s primary source of liquidity in recent years was
cash flows from operating activities and from financing
activities. Net cash flows from operating activities totaled
Rp.12,852.5&nbsp;billion in 2003, Rp.16,051.5&nbsp;billion in
2004 and Rp.21,102.7&nbsp;billion (US$2,146.8&nbsp;million) in
2005. In 2004, the growth in operating cash flows principally
resulted from higher cash receipts from operating revenues as a
result of an increase in data and Internet revenues, the
expansion of TELKOM&#146;s fixed line business as well as the
acquisition of KSO IV, growth in its mobile cellular business
conducted through Telkomsel and higher interconnection revenues
from mobile cellular operators. In 2005, the growth in operating
cash flows principally resulted from higher cash receipts from
operating revenues as a result of growth in its mobile cellular
business conducted through Telkomsel, higher interconnection
revenues from mobile cellular operators and IDD operators and
its IDD service business (TIC-007), and higher data and Internet
revenues due to increased SMS, data communication and broadband
Internet access network usage.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Year ended December&nbsp;31,
2005 compared to year ended December&nbsp;31, 2004.</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2005 compared to 2004, net cash flows from operating
activities increased by Rp.5,051.2&nbsp;billion, or 31.5%,
primarily due to:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    an increase of Rp.4,327.7&nbsp;billion, or 41.2%, in cash
    receipts from cellular business, primarily due to a growth in
    the mobile cellular business of Telkomsel;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    an increase of Rp.1,636.9&nbsp;billion, or 28.4%, in cash
    receipts from interconnection services, primarily due to an
    increase in cellular interconnection fees, resulting from an
    increased mobile cellular subscriber base in Indonesia; and</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">122

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    an increase of Rp.1,978.8&nbsp;billion, or 39.8%, in cash
    receipts from data and Internet primarily due to increases in
    SMS usage by Telkomsel subscribers and the number of Speedy
    subscribers.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This increase was partially offset by:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    an increase of Rp.2,684.1&nbsp;billion, or 21.9%, in cash
    payments for operating expenses, which is in line with the
    increase in operating expenses (excluding depreciation and
    amortization, write-down of assets and loss on procurement
    commitments).</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Year ended December&nbsp;31,
2004 compared to year ended December&nbsp;31, 2003.</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2004 compared to 2003, net cash flows from operating
activities increased by Rp.3,199.0&nbsp;billion, or 24.9%,
primarily due to:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    an increase of Rp.2,760.2&nbsp;billion, or 124.7%, in cash
    receipts from data and Internet services, particularly from
    greater SMS usage by Telkomsel subscribers;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    an increase of Rp.1,882.6&nbsp;billion, or 23.0%, in cash
    receipts from fixed lines telephone services, primarily from the
    increase in the number of subscribers for fixed wireline and
    fixed wireless services, as well as from the acquisition of KSO
    IV;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    an increase of Rp.1,562.6&nbsp;billion, or 37.2%, in cash
    receipts from interconnection, primarily due to an increase in
    interconnection fees collected from mobile cellular operators;
    and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    an increase of Rp.1,572.3&nbsp;billion, or 17.6%, in cash
    receipts from cellular, due to growth in mobile cellular
    business conducted through Telkomsel.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This increase was partially offset by:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    an increase of Rp.3,408.8&nbsp;billion, or 38.5%, in cash
    payments for operating expenses, which is in line with the
    increase in operating expenses (excluding depreciation and
    amortization); and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a decrease of Rp.648.1&nbsp;billion, or 54.2%, in cash receipts
    from joint operation schemes, primarily due to the acquisition
    of KSO IV.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>Net Cash Flows from Investing Activities</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Net cash flows used in investing activities totaled
Rp.7,305.9&nbsp;billion, Rp.9,598.1&nbsp;billion and
Rp.12,212.7&nbsp;billion (US$1,242.4&nbsp;million) in 2003, 2004
and 2005, respectively. In 2003, 2004 and 2005, the net cash
used in investing activities were primarily used for capital
expenditures.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Apart from cash on hand and cash in banks, TELKOM invests the
majority of its excess cash from time to time in time deposits.
Since May&nbsp;14, 2004, TELKOM also has been investing a part
of its excess cash in Rupiah-based mutual funds. At
December&nbsp;31, 2005, Rp.159.9&nbsp;billion of time deposit
had a maturity greater than three months and Rp.22&nbsp;billion
(US$2.2&nbsp;million) of mutual funds were outstanding.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Year ended December&nbsp;31,
2005 compared to year ended December&nbsp;31, 2004.</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2005 compared to 2004, net cash flows used in investment
activities increased by Rp.2,614.6&nbsp;billion, or 27.2%,
primarily due to:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    an increase of Rp.3,538.1&nbsp;billion, or 41.3%, in the
    acquisition of property, plant and equipment, primarily due to
    an additional installation of transmission stations, earth
    stations and equipment, cable network and an investment in data
    processing equipment.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This increase was partially offset by a decrease of
Rp.851.2&nbsp;billion, or 80%, in cash payments for advances for
the purchase of property, plant and equipment.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">123

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Year ended December&nbsp;31,
2004 compared to year ended December&nbsp;31, 2003.</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2004 compared to 2003, net cash flows used in investment
activities increased by Rp.2,292.2&nbsp;billion, or 31.4%,
primarily due to:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a decrease of Rp.1,609.9&nbsp;billion, or 84.9%, in the cash
    proceeds from sale of temporary investments and the maturity of
    time deposits; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    an increase of Rp.1,063.4&nbsp;billion for payments of advances
    for the purchase of property, plant and equipment.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>Net Cash Flows from Financing Activities</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Net cash flows used in financing activities totaled
Rp.6,177.4&nbsp;billion, Rp.6,904.9&nbsp;billion and
Rp.8,339.4&nbsp;billion (US$848.4&nbsp;million) in 2003, 2004
and 2005, respectively. In all three years, net cash flows from
financing activities were driven primarily by repayments of
outstanding indebtedness and by payments of cash dividends. In
2005, cash flow used in financing activities increased by
Rp.1,434.5&nbsp;billion, or 20.8%, primarily resulting from a
148.3% increase in payments of cash dividends to minority
shareholders of subsidiaries to Rp.1,694.3&nbsp;billion, a
193.6% decrease in proceeds from short-term borrowings (net of
repayments) from net proceeds of Rp.1,062.2&nbsp;billion in 2004
to net repayments of Rp.994.7&nbsp;billion in 2005, and a 76.1%
decrease in proceeds from long-term borrowings to
Rp.570.0&nbsp;billion. This increase was partially offset by a
decrease of Rp.4,011.0&nbsp;billion in repayments of long-term
borrowings.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayments of Current
Indebtedness.</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At December&nbsp;31, 2003, 2004 and 2005, approximately 89.2%,
72.7% and 72.7%, respectively, of TELKOM&#146;s current
indebtedness for borrowed money (consisting of current
maturities of long-term liabilities and short-term bank loans)
were denominated in foreign currencies, principally the
U.S.&nbsp;Dollar, such that the Rupiah amount of TELKOM&#146;s
cash flows used for the repayment of long-term liabilities was
significantly affected by the depreciation of the Rupiah in 2004
and 2005, compared to the appreciation of the Rupiah in 2003.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2003, 2004 and 2005, TELKOM made net repayments of current
indebtedness for borrowed money of Rp.3,050.0&nbsp;billion,
Rp.7,601.6&nbsp;billion and Rp.4,096.8&nbsp;billion
(US$416.8&nbsp;million), respectively. Cash outflows in 2005
reflected payments for:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    two-step loans of Rp.716.3&nbsp;billion;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    liabilities from business acquisitions of AriaWest and KSO IV of
    Rp.568.8&nbsp;billion;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Rp.2,336.1&nbsp;billion for payment of bank loans; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Rp.475.6&nbsp;billion for payment of medium-term notes and
    obligations under capital leases.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payment of Cash Dividends.</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM paid cash dividends, as determined by the Company&#146;s
annual shareholder meeting, as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="56%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Dividend</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total Cash</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Dividend</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Date of AGMS</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Year</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Dividends</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>per Share<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Rp. billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Rp.)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    May&nbsp;9, 2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,338.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>331.16</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    July&nbsp;30, 2004</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,043.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>301.95</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    June&nbsp;24, 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,064.6</TD>
    <TD align="left" valign="bottom" nowrap><SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>152.01</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Dividend per share for 2002 and 2003 were prior to the
    two-for-one stock split as resolved in the AGMS on July&nbsp;30,
    2004.</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Including interim cash dividends distributed in December 2004
    amounting to Rp.143.4&nbsp;billion.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">124

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;
In 2003, 2004 and 2005, the amount of cash dividends paid was
effectively determined by the Government, which holds a majority
of TELKOM&#146;s issued and outstanding common shares. TELKOM
believes that the Government considers various factors,
including the views of TELKOM&#146;s board of directors and the
Government&#146;s own funding needs in determining the portion
of each year&#146;s net income to be paid out as cash dividends.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2003, 2004 and 2005, cash dividends paid to minority
shareholders of subsidiaries amounted to Rp.402.0&nbsp;billion,
Rp.682.4&nbsp;billion and Rp.1,694.3&nbsp;billion, respectively,
which primarily represented cash dividends paid to minority
shareholders of Telkomsel.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Escrow Accounts.</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2005, TELKOM recorded a net increase in escrow accounts of
Rp.96.2&nbsp;billion (US$9.8&nbsp;million), primarily resulting
from the funds deposited into the escrow accounts in connection
with the payment of TELKOM&#146;s obligations for the
acquisition of the remaining 9.68% of the shares of Dayamitra.
See Item&nbsp;4. &#147;Information on the Company&nbsp;&#151;
B.&nbsp;Business Overview&nbsp;&#151; General&nbsp;&#151; Joint
Operation Scheme&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Working Capital</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Net working capital, calculated as the difference between
current assets and current liabilities, was Rp.(2,473.1) billion
at December&nbsp;31, 2004 and Rp.(3,208.6) billion (US$(326.4)
million) at December&nbsp;31, 2005. The decrease in net working
capital was principally due to increases in trade accounts
payable, taxes payable, accrued expenses and unearned income.
These increases were partially offset by increases in cash and
cash equivalent, trade accounts receivable, prepaid expenses and
other current assets, and a decrease in short-term bank loans.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current Assets</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Current assets were Rp.9,203.9&nbsp;billion at December&nbsp;31,
2004 and Rp.10,304.6&nbsp;billion (US$1,048.3&nbsp;million) at
December&nbsp;31, 2005, reflecting an increase of
Rp.1,100.7&nbsp;billion, or 12.0%. The increase in current
assets was primarily due to:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    an increase of Rp.518.6&nbsp;billion, or 10.7%, in cash and cash
    equivalents from Rp.4,856.1&nbsp;billion in 2004 to
    Rp.5,374.7&nbsp;billion in 2005;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    an increase of Rp.149.8&nbsp;billion, or 23.8%, in prepaid
    expenses from Rp.628.1&nbsp;billion in 2004 to
    Rp.777.9&nbsp;billion in 2005;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    an increase of Rp.258.8&nbsp;billion, or 7.8%, in trade accounts
    receivable from Rp.3,319.1&nbsp;billion in 2004 to
    Rp.3,577.9&nbsp;billion in 2005;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    an increase of Rp.97.4&nbsp;billion, or 174.6%, in other
    accounts receivable from Rp.55.8&nbsp;billion in 2004 to
    Rp.153.2&nbsp;billion in 2005; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    an increase of Rp.114.9&nbsp;billion, or 257.6%, in other
    current assets from Rp.44.6&nbsp;billion in 2004 to
    Rp.159.5&nbsp;billion in 2005.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
These increases were partially offset by:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a decrease of Rp.58.3&nbsp;billion, or 75.5%, in prepaid taxes
    from Rp.77.2&nbsp;billion in 2004 to Rp.18.9&nbsp;billion in
    2005.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At December&nbsp;31, 2003, 2004 and 2005, approximately 19.4%,
22.3% and 17.8%, respectively, of TELKOM&#146;s current assets
were denominated in foreign currencies, principally the
U.S.&nbsp;Dollar in 2003, the Euro and the U.S.&nbsp;Dollar in
2004 and the U.S.&nbsp;Dollar in 2005, such that the movements
of Rupiah exchange rate against U.S.&nbsp;Dollar and Euro across
these years would affect TELKOM&#146;s current assets.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">125

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade Accounts Receivable.</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Trade accounts receivable from related parties (net of allowance
for doubtful accounts) increased by Rp.111.3&nbsp;billion, or
26.6%, from Rp.419.1&nbsp;billion as of December&nbsp;31, 2004
to Rp.530.4&nbsp;billion (US$54&nbsp;million) at
December&nbsp;31, 2005. Trade accounts receivable from third
parties (net of allowance for doubtful accounts) increased by
Rp.147.5&nbsp;billion, or 5.1%, from Rp.2,900.0&nbsp;billion at
December&nbsp;31, 2004 to Rp.3,047.5&nbsp;billion
(US$310&nbsp;million) at December&nbsp;31, 2005, primarily due
to an increase in trade accounts receivable from residential and
business subscribers. In the case of trade accounts receivable
from related parties, the increase was primarily due to an
increase in trade accounts receivable from the government
agencies.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The allowance for doubtful accounts for trade accounts
receivable from related parties increased by
Rp.19.4&nbsp;billion, or 29.9%, from Rp.64.9&nbsp;billion at
December&nbsp;31, 2004 to Rp.84.3&nbsp;billion
(US$8.6&nbsp;million) at December&nbsp;31, 2005, in line with
the increase in the amount of accounts receivable from related
parties.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At December&nbsp;31, 2005 compared to December&nbsp;31, 2004,
the allowance for doubtful accounts for trade receivables from
third parties increased by Rp.144.3&nbsp;billion, or 31.6%, from
Rp.457.1&nbsp;billion to Rp.601.4&nbsp;billion
(US$61.2&nbsp;million), in line with the increase in the amount
of accounts receivable from third parties.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other Current Assets.</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At December&nbsp;31, 2005, Rp.159.5&nbsp;billion
(US$16.2&nbsp;million) of TELKOM&#146;s time deposits with
maturity of less than one year were restricted for security
interests for bank guarantees.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>Current Liabilities</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Current liabilities were Rp.11,677.0&nbsp;billion at
December&nbsp;31, 2004 and Rp.13,513.2&nbsp;billion
(US$1,374.7&nbsp;million) at December&nbsp;31, 2005, reflecting
an increase of Rp.1,836.2&nbsp;billion, or 15.7%. The increase
in current liabilities primarily arose from increases in the
following: (a)&nbsp;trade accounts payable; (b)&nbsp;taxes
payable; (c)&nbsp;accrued expenses; and (d)&nbsp;unearned income.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At December&nbsp;31, 2003, 2004 and 2005, approximately 42.5%,
31.6% and 31.4%, respectively, of TELKOM&#146;s current
liabilities were denominated in foreign currencies, principally
the U.S.&nbsp;Dollar, such that the movement of Rupiah exchange
rate against U.S.&nbsp;Dollar across these years significantly
affected TELKOM&#146;s current liabilities.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current Maturities of Long-term
Liabilities.</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Current maturities of long-term liabilities decreased by
Rp.73.9&nbsp;billion, or 3.2%, from Rp.2,300.8&nbsp;billion at
December&nbsp;31, 2004 to Rp.2,226.9&nbsp;billion
(US$226.5&nbsp;million) at December&nbsp;31, 2005. This decrease
was primarily due to the decreases in current maturities of the
two-step loans and TELKOM&#146;s medium-term notes, which
decrease was partially offset by increases in current maturities
of bank loans and liabilities of business acquisitions.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued Expenses.</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Accrued expenses increased by Rp.469.8&nbsp;billion, or 44.7%,
from Rp.1,051.4&nbsp;billion at December&nbsp;31, 2004 to
Rp.1,521.2&nbsp;billion (US$154.8&nbsp;million) at
December&nbsp;31, 2005. The increase was primarily due to an
increase of Rp.201.5&nbsp;billion, or 83.1%, in accruals for
general, administrative and marketing expenses from
Rp.242.6&nbsp;billion at December&nbsp;31, 2004 to
Rp.444.1&nbsp;billion at December&nbsp;31, 2005, an increase of
Rp.131.2&nbsp;billion, or 40.8%, in accrued salaries and
benefits from Rp.321.2&nbsp;billion at December&nbsp;31, 2004 to
Rp.452.4&nbsp;billion at December&nbsp;31, 2005, and an increase
of Rp.86.8&nbsp;billion, or 26.7% in accruals for operations,
maintenance and telecommunication services expenses from
Rp.324.3&nbsp;billion at December&nbsp;31, 2004 to
Rp.411.1&nbsp;billion at December&nbsp;31, 2005.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">126

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Indebtedness</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consolidated total indebtedness (consisting of long-term
liabilities, current maturities of long-term liabilities and
short-term bank loans) at December&nbsp;31, 2003, 2004 and 2005,
was as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="44%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap><B>At December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Rp. in billion)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(US$ in million)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Indonesian
    Rupiah<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,485.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,550.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,009.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>407.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;Dollar<SUP style="font-size: 85%; vertical-align: text-top">(2),(3)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,562.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,904.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,993.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>812.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Japanese
    Yen<SUP style="font-size: 85%; vertical-align: text-top">(4)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,377.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,512.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,302.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>132.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    EURO<SUP style="font-size: 85%; vertical-align: text-top">(5)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>890.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>649.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>427.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>43.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,315.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,616.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,733.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,396.6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Amounts at December&nbsp;31, 2005 include debt issuance costs
    for medium-term notes of Rp.0.7&nbsp;billion. In addition for
    2003, 2004 and 2005, amounts also include bond issuance costs
    for TELKOM bonds of Rp.18.7&nbsp;billion, Rp.13.4&nbsp;billion
    and Rp.8.15&nbsp;billion.</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Amounts at December&nbsp;31, 2003, 2004 and 2005 translated into
    Rupiah at Rp.8,450, Rp.9,300 and Rp.9,835 = US$1, respectively,
    being the Reuters sell rates for U.S.&nbsp;Dollars at each of
    those dates.</TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    Amounts at December&nbsp;31, 2003 include imputed interest on
    liabilities of business acquisitions relating to Pramindo and
    AriaWest of US$9.5&nbsp;million (Rp.80.2&nbsp;billion) and
    US$14.5&nbsp;million (Rp.122.4&nbsp;billion), respectively.
    Amounts at December&nbsp;31, 2004 include imputed interest on
    liabilities of business acquisitions relating to AriaWest, the
    remaining 9.68% interest in Dayamitra and KSO IV&nbsp;in the
    amount of US$9.7&nbsp;million (Rp.90.2&nbsp;billion),
    US$1.3&nbsp;million (Rp.11.9&nbsp;billion) and
    US$101.0&nbsp;million (Rp.938.7&nbsp;billion), respectively.
    Amounts at December&nbsp;31, 2005 included imputed interest on
    liabilities of business acquisitions relating to Aria West, the
    remaining 9.68% interest in Dayamitra and KSO IV of
    US$5.8&nbsp;million (Rp.57.3&nbsp;billion), US$0.3&nbsp;million
    (Rp.2.5&nbsp;billion) and US$72.9&nbsp;million
    (Rp.717.1&nbsp;billion), respectively, being imputed interest on
    installment payments of the foregoing liabilities.</TD>
</TR>

<TR valign="top">
    <TD>(4)&nbsp;</TD>
    <TD align="left">
    Amounts at December&nbsp;31, 2003, 2004 and 2005 translated into
    Rupiah at Rp.79.05, Rp.90.6 and Rp.83.89 = Yen&nbsp;1,
    respectively, being the prevailing exchange rates for buying Yen
    at each of those dates.</TD>
</TR>

<TR valign="top">
    <TD>(5)&nbsp;</TD>
    <TD align="left">
    Amounts at December&nbsp;31, 2003, 2004 and 2005 translated into
    Rupiah at Rp.10,663.9, Rp.12,666.9 and Rp.11,651.5 =
    EURO&nbsp;1, respectively, being the prevailing exchange rate
    for buying Euros at each of those dates.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;
Of total indebtedness at December&nbsp;31, 2005,
Rp.2,400.7&nbsp;billion, Rp.3,407.2&nbsp;billion and
Rp.7,925.3&nbsp;billion were scheduled for repayments in 2006,
2007 and 2008-2024, respectively. Of these amounts, Telkomsel
was scheduled to repay Rp.493.3&nbsp;billion in 2006,
Rp.323.3&nbsp;billion in 2007 and Rp.180.7&nbsp;billion in 2008.
Further, Rp.14.3&nbsp;billion was to be repaid by Dayamitra in
2006. Infomedia was scheduled to repay Rp.4.7&nbsp;billion,
Rp.3.4&nbsp;billion and Rp.2.3&nbsp;billion in 2006, 2007 and
2008, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM expects scheduled repayments of indebtedness to be
financed primarily from net cash flows from operating activities
and re-financing by TELKOM, Telkomsel and Dayamitra,
respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At December&nbsp;31, 2005, approximately 53.01% of TELKOM&#146;s
Rupiah-denominated indebtedness and approximately 24.38% of its
U.S.&nbsp;Dollar-denominated indebtedness bore interest at
floating rates. TELKOM&#146;s Rupiah-denominated floating rate
indebtedness bore interest rates between 8.54% and 13.27%, with
rates generally based on interest rates on three-month
Certificates of Bank Indonesia (SBI) plus a margin of 1.0%. The
weighted average interest rate on Rupiah-denominated floating
rate indebtedness at December&nbsp;31, 2005 was 9.17%.
TELKOM&#146;s U.S.&nbsp;Dollar-denominated floating rate
indebtedness was subject to interest rates between 4.02% and
5.31%, with rates generally based on floating interest rates
offered by the lenders or LIBOR plus a margin of between 0.5%
and 0.75%. The weighted average interest rate on
U.S.&nbsp;Dollar-denominated floating rate indebtedness at
December&nbsp;31, 2005 was 5.03%. TELKOM&#146;s
Rupiah-denominated fixed rate indebtedness at that date bore a
weighted average interest rate of 15.29%, while its
U.S.&nbsp;Dollar-denominated fixed rate indebtedness bore a
weighted average interest rate of 5.70%. All of TELKOM&#146;s
Japanese Yen-denominated indebtedness was fixed rate and bore a
weighted average interest rate at December&nbsp;31, 2005 of
3.11%.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At December&nbsp;31, 2005, TELKOM had the following outstanding
significant indebtedness:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="2%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    Rp.5,329.5&nbsp;billion (US$542.2&nbsp;million) (including
    current maturities) in two-step loans through the Government;</TD>
</TR>

</TABLE>

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<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="2%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    Rp.991.9&nbsp;billion (US$100.9&nbsp;million) (after bond
    issuance costs) IDR bonds issued by TELKOM;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    Rp.693.7&nbsp;billion (US$70.6&nbsp;million) (including current
    maturities) in acquisition indebtedness relating to
    TELKOM&#146;s acquisition of 100% equity interest in AriaWest
    (after discount);</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    Rp.3,151.3&nbsp;billion (US$320.6&nbsp;million) representing the
    present value of fixed monthly payments to be paid to MGTI in
    respect of the acquisition of KSO&nbsp;IV;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    Rp.609.3&nbsp;billion (US$62.0&nbsp;million) medium-term notes
    (net of debt issuance costs) issued by TELKOM;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    Rp.1,156.3&nbsp;billion (US$117.6&nbsp;million) in project
    financing from the Export and Import Bank of Korea in connection
    with the CDMA Project;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    Rp.301.0&nbsp;billion (US$30.6&nbsp;million) loan for the
    Sumatera backbone network; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    Rp.827.3&nbsp;billion (US$84.2&nbsp;million) (including current
    maturities) of Telkomsel&#146;s loan from Citibank International
    plc through its Hermes Export facility (Rp.427.7&nbsp;billion)
    and <FONT style="white-space: nowrap">EKN-Backed</FONT> facility
    (Rp.399.6&nbsp;billion).</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Two-Step Loans</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Since 1982, TELKOM has entered into a series of two-step loans
in which the Government borrows money from supranational lenders
and foreign export credit agencies, such as the World Bank and
the U.S.&nbsp;Export-Import Bank, for on-lending to TELKOM to
fund investment in property, plant and equipment. TELKOM
obtained its last two-step loan in 1994 and, as a public
company, is no longer eligible to obtain Government-assisted
financing of this type.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At December&nbsp;31, 2005, TELKOM&#146;s outstanding principal
indebtedness under the two-step loans totaled
Rp.5,329.5&nbsp;billion (US$542.2&nbsp;million), of which
US$227.0&nbsp;million (Rp.2,232.7&nbsp;billion) was denominated
in U.S.&nbsp;Dollars and &#165;15,527.6&nbsp;million
(Rp.1,302.6&nbsp;billion) was denominated in Japanese Yen. As of
December&nbsp;31, 2005, TELKOM has used all facilities of
two-step loans and the draw period for the two-step loan has
expired.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Two-step loans bear fixed or floating rates. Floating rates are
determined by reference to interest rates on the average of
<FONT style="white-space: nowrap">3-month</FONT> Certificates of
Bank Indonesia (SBI) during the six months preceding the
installment due date plus 1.0% per annum or the interest rate
offered by lenders plus 5.25% for
<FONT style="white-space: nowrap">two-step</FONT> loans which
are payable in Rupiah and the interest rate offered by offshore
lenders plus 0.5% for two-step loans which are payable in
foreign currencies. Repayments of principal are due on the loans
at various dates through 2024. For the years 2006 through 2010,
aggregate scheduled repayments of principal range from
Rp.418.0&nbsp;billion to Rp.569.3&nbsp;billion per year and
average Rp.476.3&nbsp;billion per&nbsp;year.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company must maintain financial ratios as follows:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="2%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    Projected net revenue to projected debt service ratio should
    exceed 1.5:1 and 1.2:1 for two-step loans originating from World
    Bank and Asian Development Bank (&#147;ADB&#148;), respectively;
    and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    Internal financing (earnings before depreciation and interest
    expenses) should exceed 50% and 20% compared to capital
    expenditures for loans originally from the World Bank and ADB,
    respectively.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, the Company was in compliance with
the above covenants.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Direct Borrowings</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Beginning in 2002, TELKOM began funding a significant portion of
its capital expenditures through vendor-procured and other
direct borrowings from banks and other lenders, including the
capital markets. On February&nbsp;25, 2002, TELKOM borrowed
US$4.0&nbsp;million and Rp.90.0&nbsp;billion from a consortium
of Indonesian banks to finance the development of an Internet
protocol backbone.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
TELKOM had never previously borrowed directly from a commercial
bank to finance capital expenditures. As of December&nbsp;31,
2005, there was no outstanding amount under these facilities.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On April&nbsp;10, 2002, TELKOM borrowed US$51.4&nbsp;million and
Rp.173.0&nbsp;billion from Citibank N.A. and PT&nbsp;Bank
Central Asia to finance the development of a high performance
backbone in Sumatera. Citibank loans, which were supported by an
export credit guarantee of Hermes Kreditversicherungs AG and
Istituto per I Servizi Assicurativi del Commercio Estero
(&#147;SACE&#148; Italy), bear interest rate at a rate equal to
<FONT style="white-space: nowrap">6-month</FONT> LIBOR plus
0.75% and fixed interest rate of 4.14%, respectively. Bank
Central Asia loan bears interest at 4.35% plus the
<FONT style="white-space: nowrap">3-month</FONT> time deposit
rate. As of December&nbsp;31, 2005, the outstanding amounts
under these facilities were US$21.9&nbsp;million and
Rp.86.1&nbsp;billion.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On June&nbsp;21, 2002, TELKOM entered into a loan agreement with
several Indonesian banks in which Bank Bukopin acted as facility
agent for Rp.150&nbsp;billion to fund the development of the
regional junction Regional Division&nbsp;V project. The lenders
charged interest at the rate of 19.5% for the first year and at
the average 3-month deposit rate plus 4% for the remaining
years. A substantial portion of these loans were supported by
export credit agency guarantees procured by the equipment
vendors for the project. As of December&nbsp;31, 2005, the
outstanding amount under these facilities were
Rp.74.89&nbsp;billion.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On August&nbsp;27, 2003 TELKOM entered into a Loan Agreement
with The Export-Import Bank of Korea for approximately
US$124.0&nbsp;million, with a portion of the loan amount to be
used by TELKOM to finance its obligations under the Master of
Procurement Partnership Agreement (&#147;MPPA&#148;) it had
entered into with a consortium led by Samsung Corporation. The
loan bears interest, commitment and other fees totaling 5.68%.
As of December&nbsp;31, 2005, the outstanding amount under this
facility was US$117.6&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;20, 2004, TELKOM entered into a short-term debt
financing arrangement with Hong Kong and Shanghai Banking
Corporation in the amount of Rp.100.0&nbsp;billion with interest
rate at one-month Certificate of Bank Indonesia plus 1%, and
US$49&nbsp;million with interest rate at LIBOR plus 1.8%. This
loan was fully repaid on October&nbsp;14, 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;21, 2004, TELKOM entered into a
US$65.0&nbsp;million short-term loan facility agreement with ABN
AMRO to be used for working capital purposes. The principal
amount of US$30&nbsp;million matured on March&nbsp;31, 2005 and
was repaid, and the principal amount of US$35&nbsp;million
matured on June&nbsp;30, 2005 and was repaid. The loan bears
interest at 3-month US Dollar LIBOR plus 2.5%.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;3, 2004, Telkomsel entered into a short-term
loan agreement with Bank Central Asia (BCA) for the total
facility of Rp.170&nbsp;billion. The loan bears interest at the
<FONT style="white-space: nowrap">3-month</FONT> Bank Indonesia
Certificate plus 1% (13.09% as of December&nbsp;31, 2005),
payable in arrears. The principal outstanding as of
December&nbsp;31, 2005 was Rp.170.0&nbsp;billion. The loan was
fully repaid on February&nbsp;1, 2006.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>IDR Bond Issuance</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On July&nbsp;16, 2002, TELKOM issued bonds denominated in Rupiah
amounting to Rp.1,000&nbsp;billion. The bonds were issued at par
value and have a term of five years. The bonds bear interest at
a fixed rate of 17% per annum, payable quarterly beginning
October&nbsp;16, 2002. The bonds are traded on the Surabaya
Stock Exchange and will mature on July&nbsp;16, 2007. Net
proceeds after bond issuance costs of Rp.19.2&nbsp;billion
amounted to Rp.980.8&nbsp;billion.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2004, all of the bond proceeds have been
used, primarily for the CDMA project with the remainder for the
access network.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company must maintain the following consolidated financial
ratios:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="2%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    Debt service coverage ratio must exceed 1.5:1;</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    Debt to equity ratio must not exceed (i)&nbsp;3:1 for the period
    January&nbsp;1, 2002 to December&nbsp;31, 2002; (ii)&nbsp;2.5:1
    for the period January&nbsp;1, 2003 to December&nbsp;31, 2003;
    and (iii)&nbsp;2:1 for the period January&nbsp;1, 2004 to the
    date the bonds are redeemed; and</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    Debt to EBITDA ratio must not exceed 3:1.</TD>
</TR>

</TABLE>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM also covenanted in the bonds indenture that during the
periods the bonds are outstanding, TELKOM would not make any
loans to or for the benefit of any person which in the aggregate
exceed Rp.500&nbsp;billion. In 2005, TELKOM breached this
covenant. As of March&nbsp;24, 2006, TELKOM had obtained a
written waiver from PT Bank Rakyat Indonesia Tbk., the trustee
of the bonds, which allows TELKOM to provide loans to certain
subsidiaries in an amount which in the aggregate exceeds
Rp.500&nbsp;billion. See &#147;&#151;&nbsp;B. Liquidity and
Capital Resources&nbsp;&#151; Defaults and Waivers of Defaults
under our Debt Facilities&#148;.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Medium-Term Notes</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;13, 2004, TELKOM issued unsecured medium-term
notes (&#147;MTN&#148;) in the principal amount of
Rp.1.125&nbsp;trillion in four series, pursuant to a Medium-Term
Notes&nbsp;Issuance Agreement dated December&nbsp;13, 2004.
Series&nbsp;A and Series&nbsp;B have matured and have been
repaid as of December&nbsp;31, 2005. Series&nbsp;C is in the
principal amount of Rp.145&nbsp;billion, matures on
June&nbsp;15, 2006 and bears interest at the rate of 8.2% per
annum, and Series&nbsp;D is in the principal amount of
Rp.465&nbsp;billion, matures on June&nbsp;15, 2007 and bears
interest at the rate of 9.4% per annum. Interest on the
outstanding MTN is payable on June&nbsp;15, 2006,
December&nbsp;15, 2006 and June&nbsp;15, 2007. Scheduled
interest payments have been made on their due dates as of the
date of this Annual Report. The MTN were offered at their
principal amounts.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the terms and conditions of the MTN, TELKOM cannot,
without prior approval of holders of a majority of the
outstanding principal amount of the MTN, take certain actions,
including (i)&nbsp;encumber, pledge or charge any part of its
assets, with certain exceptions; (ii)&nbsp;provide, or to cause
its subsidiaries to provide, any corporate guarantee to any
third party, except corporate guarantees relating to the
obligations of its subsidiaries, for the purpose of tendering or
acquiring assets through export credit; (iii)&nbsp;merge or
consolidate with other companies which results in a material
adverse effect to the operations and financial condition of
TELKOM; and (iv)&nbsp;dispose of assets which are in aggregate
more than 5% of TELKOM&#146;s net fixed assets.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM is required at the end of each calendar quarter during
the life of the MTN to maintain certain financial ratios,
namely: (i)&nbsp;debt service coverage ratio of not less than
1.5 to 1; (ii)&nbsp;debt to equity ratio of not more than 2 to
1; and (iii)&nbsp;debt to EBITDA ratio of not more than 3 to 1.
As of the date of this Annual Report, TELKOM is in compliance
with these ratios.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Acquisition Indebtedness and Option Purchase Price</I></B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>Dayamitra</I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;14, 2004, TELKOM exercised the option to buy
the remaining 9.68% shares owned by TM Communication in
Dayamitra to complete its 100% acquisition of Dayamitra. Payment
for the shares in the amount of US$16.2&nbsp;million will be
made on March&nbsp;26, 2006 through an escrow account in
Citibank Singapore. TELKOM has been making monthly payments of
US$787,390 to the escrow account starting from December&nbsp;26,
2004, which will end on March&nbsp;26, 2006. TELKOM issued a
non-transferable promissory note to TM Communications as a
guarantee to buy the shares on March&nbsp;26, 2006, during which
TM Communications will concurrently transfer the 9.68% share
certificate of Dayamitra to TELKOM. As a result, TELKOM
currently controls 100% of Dayamitra.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>AriaWest</I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On July&nbsp;31, 2003, TELKOM acquired all the shares of
AriaWest. As a result of the acquisition, TELKOM owes the former
shareholders of AriaWest US$109.1&nbsp;million, which is being
repaid in ten semi-annual installments from July&nbsp;31, 2004
through January&nbsp;31, 2009. As of December&nbsp;31, 2005, the
amount payable to AriaWest&#146;s former shareholders, before
unamortized discount, totaled US$76.4&nbsp;million.
</DIV>

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<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>KSO IV</I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On January&nbsp;20, 2004, TELKOM and MGTI entered into an
agreement to amend and restate the KSO Agreement with respect to
Regional Division&nbsp;IV. For details, see Item&nbsp;4.
&#147;Information on the Company&nbsp;&#151; B.&nbsp;Business
Overview&nbsp;&#151; General&nbsp;&#151; Joint Operation
Scheme&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At December&nbsp;31, 2005, the remaining monthly payments to be
made by TELKOM to MGTI, before unamortized discount, amounted to
US$393.3&nbsp;million (Rp.3,868.4&nbsp;billion).
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Sumatera High Performance Backbone Network</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On April&nbsp;10, 2002, TELKOM entered into four term loan
facilities to finance the construction of the Sumatera high
performance backbone network. These four facilities were entered
into with (i)&nbsp;Bank Central Asia, for Rp.173&nbsp;billion;
(ii)&nbsp;Citibank, N.A., for US$6.95&nbsp;million;
(iii)&nbsp;Citibank International plc as agent for certain
lenders under a syndicated loan, for US$23.40&nbsp;million
(supported by an export credit guarantee of Hermes
Kreditversicherungs&nbsp;AG); and (iv)&nbsp;Citibank
International plc as agent for certain lenders under a
syndicated loan, for US$21.00&nbsp;million (supported by an
export credit guarantee of Istituto per I Servizi Assicurativi
del Commercio Estero). As of December&nbsp;31, 2005, all of
these facilities have been fully or partially utilized, with the
US$6.95&nbsp;million loan to Citibank, N.A. being fully repaid
in May 2003.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the facility with Bank Central Asia, TELKOM is required at
the end of each calendar quarter during the life of the facility
to maintain certain financial ratios, namely: (i)&nbsp;debt to
EBITDA ratio of not more than 3 to 1; (ii)&nbsp;EBITDA to
interest expense ratio of at least 4 to 1; and (iii)&nbsp;EBITDA
to interest expense and principal ratio of at least 1.5 to 1.
TELKOM also covenanted in this facility that TELKOM would not
make any loans to or for the benefit of any person which in the
aggregate exceed Rp.500&nbsp;billion. In 2005, TELKOM breached
this covenant. As of April&nbsp;24, 2006, TELKOM had obtained a
written waiver from Bank Central Asia with regard to providing
loans to certain subsidiaries, in an amount which in the
aggregate exceeds Rp.500&nbsp;billion . See &#147;&#151;&nbsp;B.
Liquidity and Capital Resources&nbsp;&#151; Defaults and Waivers
of Defaults under our Debt Facilities.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the other outstanding facilities, during the period when
the subject loans are outstanding, TELKOM is required to
maintain the following financial ratios:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (i)&nbsp;debt service coverage ratio of not less than 1.5 to 1;
    (ii)&nbsp;debt to equity ratio of not more than: (a)&nbsp;3 to 1
    for the period of April&nbsp;10, 2002 to January&nbsp;1, 2003,
    (b)&nbsp;2.75 to 1 for the period of January&nbsp;2, 2003 to
    January&nbsp;1, 2004, (c)&nbsp;2.5 to 1 for the period of
    January&nbsp;2, 2004 to January&nbsp;1, 2005 and (d)&nbsp;2 to 1
    for the period of January&nbsp;2, 2005 to the full repayment
    date of the loans (iii)&nbsp;debt to EBITDA ratio of not more
    than: (a)&nbsp;3.5 to 1 for the period from April&nbsp;10, 2002
    to January&nbsp;1, 2004 (b)&nbsp;3 to 1 for the period from
    January&nbsp;2, 2004 to the full repayment date of the loans.
    TELKOM also covenanted in these facilities that TELKOM would not
    make any loans or grant any credit to or for the benefit of any
    person in an amount which in the aggregate exceeds 3% of
    TELKOM&#146;s stockholders&#146; equity. In 2005, TELKOM
    breached this covenant. As of May&nbsp;12, 2006, TELKOM had
    obtained a written waiver from Citibank International plc with
    regard to providing loans to certain subsidiaries, which in the
    aggregate exceed 3% of TELKOM&#146;s stockholders&#146; equity.
    See &#147;&#151;&nbsp;B. Liquidity and Capital
    Resources&nbsp;&#151; Defaults and Waivers of Defaults under our
    Debt Facilities.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Regional Division V Junction Project</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On June&nbsp;21, 2002, TELKOM entered into a loan agreement with
a consortium of banks for a Rp.400&nbsp;billion facility in
order to finance the Regional Division&nbsp;V junction project.
The original loan was to be repaid in 14 quarterly installments
starting from April 2004. The loan agreement was amended on
April&nbsp;4, 2003 to reduce the facility amount to
Rp.150&nbsp;billion and provide for repayments to be made in 14
quarterly installments starting on May&nbsp;21, 2004. As of
December&nbsp;31, 2005, TELKOM had drawn down a total of
Rp.148.9&nbsp;billion of this loan. As of December&nbsp;31,
2005, the outstanding amount of the loan was
Rp.74.89&nbsp;billion.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under this loan agreement, TELKOM is required at the end of each
calendar quarter during the life of the facility to maintain
certain financial ratios, namely: (i)&nbsp;debt to equity ratio
of not more than 3 to 1; and (ii)&nbsp;EBITDA to interest
expense ratio of not less than 5 to 1. As of the date of this
Annual Report, TELKOM is in compliance with these ratios.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Telkomsel&#146;s Indebtedness (including
    facilities)</I></B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>Hermes Export Facility</I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;2, 2002, pursuant to the Partnership Agreement
with Siemens Aktiengesellschaft (AG), Telkomsel entered into a
Hermes Export Facility Agreement with Citibank International plc
(as Original Lender and Agent) providing a total facility of EUR
76.2&nbsp;million divided into several tranches. The agreement
was subsequently amended with the latest amendment on
October&nbsp;15, 2003, to reduce the facility amount to EUR
73.4&nbsp;million. The interest rate on this facility is the
aggregate of applicable margin, EURIBOR and &#147;mandatory
cost&#148; incurred to comply with the requirements of foreign
banking or financial regulatory agencies, if any, and is paid
semi-annually, starting on the utilization date of the facility
(May&nbsp;29, 2003). Interest paid for the loan was at 2.96% and
3.33% per annum as of December&nbsp;31, 2004 and 2005,
respectively. As of December&nbsp;31, 2005, total loans drawn
from the facility amounted to EUR 73.4&nbsp;million and the
outstanding balance was EUR 36.7&nbsp;million.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>EKN-Backed Facility</I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;2, 2002, pursuant to the partnership agreement
with PT&nbsp;Ericsson Indonesia, Telkomsel entered into the
EKN-Backed Facility Agreement with Citibank International plc
(as Original Lender and Agent) covering a total facility amount
of US$70.5&nbsp;million divided into several tranches. In
December 2004, the agreement was amended to reduce the facility
amount to US$68.9&nbsp;million. The interest rate on the
facility is based on the aggregate of the applicable margin,
commercial interest reference rate and mandatory compliance
cost, if any (i.e., 4.02% as of December&nbsp;31, 2004 and
2005). Interest is paid semi-annually, starting on the date
amounts are drawn (July&nbsp;31, 2003). As of December&nbsp;31,
2005, Telkomsel had drawn down US$68.95&nbsp;million from this
facility and the outstanding balance was US$40.65&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dayamitra&#146;s
Indebtedness</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, Dayamitra had an indebtedness
outstanding of Rp.14.3&nbsp;billion (US$1.5&nbsp;million),
representing loan facilities from Bank Mandiri pursuant to the
terms of loan agreements entered into on December&nbsp;20, 2003.
The loans are payable on a quarterly basis until the fourth
quarter of 2006 and bear interest at 14% per annum.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Capital Expenditures</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At December&nbsp;31, 2005, TELKOM (unconsolidated) incurred
capital expenditures of Rp.3,367.8&nbsp;billion
(US$342.6&nbsp;million), which was less than the Rp.
5,572.4&nbsp;billion originally budgeted in its capital
expenditure plan.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM groups its capital expenditures into the following
categories for planning purposes:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Infrastructure, which consists of the transmission network and
    backbone (including data backbone and fixed line network
    backbone infrastructure) and access network (including fixed
    wireless networks);</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Phone, which is essentially fixed wireline and fixed wireless;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Mobile Cellular, which consists of GSM mobile wireless telephone
    services and is presently conducted through Telkomsel;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Multimedia, which consists of Internet access, VoIP services and
    data services and other content development; and</TD>
</TR>

</TABLE>

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<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Service-Net, which consists of various commercial services
    intended to increase traffic on TELKOM&#146;s network, including
    interconnection, Internet network and third-party call centers.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, Telkomsel incurred capital expenditures of
Rp.10,085.7&nbsp;billion (US$1,026.0&nbsp;million) for network
infrastructure and other investments and TELKOM&#146;s other
subsidiaries incurred capital expenditures of
Rp.99.5&nbsp;billion (US$10.1&nbsp;million).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets out TELKOM&#146;s historical and
planned capital expenditure requirements for the periods
indicated, including historical and planned capital expenditures
for Telkomsel, Dayamitra and TELKOM&#146;s other consolidated
subsidiaries:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="44%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>Year Ended December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2006<SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2007<SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>Rp. (billion)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>TELKOM:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Infrastructure:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Transmission Network and Backbone</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,595.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>560.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>277.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,205.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,015.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Access Network</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,849.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,831.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,577.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,937.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,724.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Subtotal Infrastructure</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,444.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,391.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,854.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,142.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,739.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Commercial Services:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Phone</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>161.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>901.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>524.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,077.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>360.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Mobile Cellular</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Multimedia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>76.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>92.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>334.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>729.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>169.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Services-Net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>99.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>94.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>108.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>222.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Subtotal Commercial Services</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>338.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,028.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>953.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,916.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>751.7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Supporting Services</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>151.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>295.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>559.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>754.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>758.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Subtotal for TELKOM (unconsolidated)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,933.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,715.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,367.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,813.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,249.7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>TELKOM&#146;s Subsidiaries:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Telkomsel</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,348.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,982.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,085.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,937.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Dayamitra</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>109.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Infomedia Nusantara</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>63.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>114.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82.7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Pramindo Ikat Nusantara</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Indonusa Telemedia</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Graha Sarana Duta</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>PT&nbsp;Pro Infokom Indonesia</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>PT&nbsp;Metra (Holding)</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>42.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>AriaWest</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>87.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>175.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Napsindo</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>53.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Subtotal for subsidiaries</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,618.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,104.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,185.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,284.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,388.2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total for TELKOM (consolidated)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,552.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,820.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,553.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,098.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,637.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Amounts for 2003, 2004 and 2005 are actual capital expenditures.</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Amounts for 2006 are planned capital expenditures included in
    TELKOM&#146;s budget and are subject to upward or downward
    adjustment.</TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    Amounts for 2007 are projected capital expenditures for such
    year, and actual capital expenditures may be significantly
    different from projected amounts.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;
Actual future capital expenditures may differ from the amounts
indicated above due to various factors, including but not
limited to the Indonesian economy, the Rupiah/US dollar and
Rupiah/Euro
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
exchange rates and other applicable foreign exchange rates, the
availability of vendor or other financing on terms acceptable to
TELKOM, technical or other problems in obtaining or installing
equipment and whether TELKOM enters any new lines of business.
In particular, TELKOM&#146;s ability to make substantial future
capital expenditures will depend on whether it is successful in
implementing one or more forms of financing, including &#147;pay
as you grow&#148;. See Item&nbsp;3. &#147;Key
Information&nbsp;&#151; D. Risk Factors&nbsp;&#151;
TELKOM&#146;s ability to develop adequate financing arrangements
is critical to support its capital expenditures&#148; and
Item&nbsp;4. &#147;Information on the Company&nbsp;&#151;
B.&nbsp;Business Overview&nbsp;&#151; Business
Strategy&nbsp;&#151; Reducing Cost of Capital.&#148;
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Planned Investments in
2006</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2006, TELKOM plans to make capital investments in
infrastructure, commercial services and supporting services.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Planned Investments in
Infrastructure</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM&#146;s planned capital investments in infrastructure in
2006 total Rp.4,142.4&nbsp;billion. This will be used for
capital investments in transmission infrastructure, which are
expected to include investments in a fiber optic transmission
network, a backbone transmission network on the island of
Kalimantan and Sulawesi and an additional ground satellite
segment in Jakarta, a submarine cable system between
Batam-Jakarta and a submarine cable system between Puger and
Denpasar. Substantial investment will also be made in expanding
access infrastructure, which includes fiber optic cable fixed
line, copper wire fixed line and CDMA wireless access networks.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For a more complete discussion of TELKOM&#146;s planned
infrastructure investments, see Item&nbsp;4. &#147;Information
on the Company&nbsp;&#151; B.&nbsp;Business Overview&nbsp;&#151;
Network Infrastructure.&#148;
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Planned Investments in
Commercial Services</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM also plans to spend Rp.1,916.4&nbsp;billion in 2006 for
capital investments in commercial services, including:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    capital investments in fixed line commercial services (including
    fixed wireless services), which include additional capacity,
    service enhancements and upgrades, including its value added
    services and software and mechanical and electrical systems;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    enhancing TELKOM&#146;s multimedia network (including core
    network of IP transport, HFC and CATV services), which includes
    increases in the number of VoIP access points, Internet
    multiplexing (IMUX) systems for Internet and data access,
    Internet value added services such as B2B
    <FONT style="white-space: nowrap">e-commerce,</FONT> broadband
    access (xDsl), and improving TELKOM&#146;s HFC and CATV systems;
    and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    investing in service-net, including the establishment of fixed
    wireless services,
    <FONT style="white-space: nowrap">e-commerce,</FONT> internet
    connectivity and value added services.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Planned Investments in
Supporting Services</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM plans to spend Rp.754.6&nbsp;billion in 2006 for capital
investments in supporting facilities, including:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    investments in BTS stations to expand network coverage,
    transmission receiver (TRX) and microcells to improve its
    quality;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    switching equipment;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    equipment used for prepaid products</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    fiber optic transmission for the large cities in Java</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">134

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<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    additional radio network capacity</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    3G roll out plan, and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    supporting facilities consisting of buildings, R&#38;D and
    office facilities.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other Financing
Techniques</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In common with many Indonesian state-owned enterprises, TELKOM
has historically relied on two-step loans financed by the
Government and revenue sharing with co-investors to fund
investment in property, plant and equipment. In recent years,
however, TELKOM has funded its capital investments largely
through internally generated cash flows from operating
activities and direct borrowing from commercial banks. In
addition, TELKOM has in recent years accessed the debt capital
markets for a portion of its financing needs. On July&nbsp;16,
2002, TELKOM issued a fixed rate IDR Bond in the amount of
Rp.1,000&nbsp;billion with maturity of five years with fixed
interest rate of 17% per annum. On December&nbsp;15, 2004,
TELKOM issued unsecured medium-term notes (&#147;MTN&#148;) in
the principal amount of Rp.1.125 trillion in four series with
interest rates ranging from 7.7% to 9.4% per annum. TELKOM is
presently in the process of exploring alternative sources of
financing for capital investment, including vendor-procured and
other bank financing, as well as other potential sources of
borrowed funds.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenue Sharing</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Until recently, TELKOM made use of revenue-sharing arrangements
to develop fixed line networks in heavily populated urban areas
of Indonesia, public card-phone booths and its analog mobile
cellular networks. Under these revenue-sharing arrangements,
investors finance the costs incurred in procuring and installing
equipment, while TELKOM manages and operates the equipment, and
bears the cost of repairs and maintenance, after installation
and until the end of the revenue-sharing period. The investors
legally retain rights to the equipment during the
revenue-sharing period but transfer ownership to TELKOM at the
end of such period. See Item&nbsp;4. &#147;Information on the
Company&nbsp;&#151; B.&nbsp;Business Overview&nbsp;&#151;
General&nbsp;&#151; Revenue Sharing Arrangements (PBHs).&#148;
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM did not fund any capital investments (other than capital
investments in fixed line telephone services and broadband
Internet services) through revenue-sharing arrangements in 2003,
2004 or 2005 and does not intend to fund any such capital
investments (other than capital investments in fixed line
telephone services) through such arrangements in the future,
except in the context of its efforts to promote the &#147;pay as
you grow&#148; program to fund capital investments. See
&#147;Pay as You Grow&#148; below. Since 2004, TELKOM has been
trying to replace existing revenue-sharing arrangements with new
partnership schemes on more favorable terms.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pay as You Grow</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Pay as You Grow program involves arrangements in which
TELKOM and its equipment suppliers agree that a percentage of
the contract cost will be paid upfront (typically 25%) and the
balance will be paid once the lines are put into service. TELKOM
and its suppliers also agree to work together to plan and design
networks, assess capacity requirements and determine timetable
for procurement. The &#147;pay as you grow&#148; scheme allows
TELKOM to pay the equipment vendors based on the attainment of a
certain number of customers in the related area/facility or
within one year from completion date, whichever is earlier.
Vendors participating in this &#147;pay as you grow&#148; scheme
have assessed the risk of entering into such scheme and, up to
the date of this Annual Report, have only been willing to enter
into this scheme for projects that they believe have high
customer potential. Accordingly, vendors have always been paid
by TELKOM within a few months after the equipment has been
delivered. TELKOM expects that only a relatively small number of
equipment suppliers will be invited to participate in pay as you
grow programs and supply a substantial portion of TELKOM&#146;s
infrastructure and other equipment needs.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">135

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Critical Accounting Policies, Estimates and Judgments</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The preparation of TELKOM&#146;s consolidated financial
statements in conformity with Indonesian GAAP, as well as the
reconciliation to U.S.&nbsp;GAAP, requires TELKOM to make
estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and revenue
and expenses for the years reported. Management continually
evaluates its estimates and judgments including those related to
useful lives and carrying value of property, plant and equipment
and intangible assets, valuation allowance for receivables,
pension and other post-retirement benefits, income taxes and
legal contingencies. Management bases its estimates and
judgments on historical experience and other factors that are
believed to be reasonable under the circumstances. For a
complete discussion of the application of these and other
significant accounting policies, see Note&nbsp;2 to the
Company&#146;s consolidated financial statements. Actual results
could differ from those estimates under different assumptions
and conditions. TELKOM believes that of our significant
accounting policies, the following may involve a higher degree
of judgment or complexity or are areas where assumptions and
estimates are particularly critical to the financial statements:
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Allowances for Doubtful
Accounts</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The allowance for doubtful accounts is the Company&#146;s best
estimate of the amount of probable credit losses in the
Company&#146;s existing accounts receivable. The Company
determines the allowance based on historical write-off
experience. The Company reviews its allowance for doubtful
accounts monthly. Past due balances over 90&nbsp;days for retail
customers are fully provided, and past due balance for
non-retail customers over a specified amount are reviewed
individually for collectibility. Account balances are charged
off against the allowance after all means of collection have
been exhausted and the potential for recovery is considered
remote. The Company does not have any off-balance sheet credit
exposure related to its customers.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Carrying Amount of Property,
Plant and Equipment and Goodwill and Other Intangible
Assets</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM estimates the useful lives of property, plant and
equipment and goodwill and other intangible assets in order to
determine the amount of depreciation and amortization expense to
be recorded during any reporting period. The useful lives are
estimated at the time the asset is acquired and are based on
historical experience with similar assets as well as taking into
account anticipated technological or other changes and, in the
case of rights to operate intangible assets, the remaining term
of the KSO agreement. When the carrying amount of the asset
exceeds its recoverable value due to, among others,
technological changes, significant adverse change in legal
factors or business climate, unanticipated competition, industry
changes or physical damage, the useful lives assigned to these
assets may either need to be shortened, resulting in the
recognition of increased depreciation and amortization expense
in future periods or these changes could result in the
recognition of an impairment charge to reflect the write-down in
value of the asset. TELKOM reviews these types of assets for
impairment periodically, when events or circumstances indicate
that the carrying amount may not be recoverable over the
remaining lives of the assets. Assessment of the timing and/or
the amount of such impairment is a matter of significant
judgment. In assessing impairments, TELKOM uses discounted cash
flows that take into account management&#146;s estimates of
future operations. The most important estimates that we use in
projecting our future cash flows involve our expectations of the
future prices at which our services will be charged, the number
of access lines that we will have in service and the discount
rate that is used to arrive at the discounted present value of
the projected future cash flows. The prices at which our
services are charged are subject to government regulation. The
number of access lines that we will have in service will depend
upon our ability to source sufficient, affordable financing to
build new access lines.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pension and Post-retirement
Benefits</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have a commitment, mainly through TELKOM&#146;s pension fund,
to pay pension and other post-retirement benefits to our
employees and former employees who reach 56&nbsp;years of age.
The cost of these benefits and the present value of our pension
and other post-retirement liabilities depend on a number of
factors which we determine on an actuarial basis utilizing a
number of assumptions. The assumptions used in determining the
net periodic cost (income) for pension and post-retirement
benefits include the expected long-term rate of return on the
relevant plan&#146;s assets and the discount rate. In the case
of the post-retirement healthcare plan, the expected rate of
increase in medical costs is also used. Any changes in these
assumptions will impact the net periodic cost (income) recorded
for pension and post-retirement benefits.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM uses long-term historical actual return information and
estimated future long-term investment return information by
reference to external sources, taking into account the current
and expected asset allocations, to develop its expected rate of
return on plan assets.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At the end of each year, TELKOM determines the appropriate
discount rate, which represents the interest rate that should be
used to determine the present value of future cash flows
currently expected to be required to settle the pension and
post-retirement benefit obligations. In determining the
appropriate discount rate we considered the current yields on
high quality corporate fixed-income investments. We were not
able to identify suitable investments in Indonesia with a
corresponding maturity to the expected duration of the benefit
obligations so we have used the yield-to-maturity of Indonesian
Government Bonds at year end. At December&nbsp;31, 2005,
TELKOM&#146;s discount rate was 11%. Due to the fact that there
are very limited types of high-quality debt instruments in
Indonesia coupled with the lack of ability to estimate interest
rates, TELKOM believes that the yield-to-maturity of the
Indonesian Government Bonds represents the most appropriate
discount rate to measure the present value of the benefit
obligations at year end. Changes in such rates due to changes in
the reference Indonesian Government Bonds brought about by
changing economic conditions in Indonesia and throughout the
world would affect the recognition of our pension and
post-retirement benefit obligations and as a consequence, could
materially affect our financial position and results of
operations.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The expected rate of medical cost has been determined by
comparing the historical relationship of our actual medical cost
increases with the rate of general inflation in the Indonesian
economy and health&nbsp;care utilization patterns. Past
experience has shown that our actual medical costs have on
average increased by a factor of 2% above the general rate of
inflation. Our projected medical cost was 12% and 9% as of
December&nbsp;31, 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Assumed health care cost trends have a significant effect on the
amounts reported for the health care plan. A
one-percentage-point change in assumed health care cost trend
rates would have the following effects:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="64%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>1-Percentage-</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>1-Percentage-</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Point Increase</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Point Decrease</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Effect on total of service and interest cost components</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>159,073</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(126,008</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Effect on post-retirement benefit obligation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,143,943</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(908,400</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Other assumptions include life expectancy of the members, the
rate of increase in compensation levels and the average
remaining years of service.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Early retirement benefits are recognized at the time TELKOM
makes a commitment to provide early retirement benefits as a
result of an offer made in order to encourage voluntary
redundancy. TELKOM is demonstrably committed to a termination
when and only when, TELKOM has a detailed formal plan for the
early retirement and such plan is without realistic possibility
of withdrawal.
</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Income Taxes</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the
amounts of assets and liabilities recognized for financial
reporting purposes and the amounts recognized for income tax
purposes. Deferred tax liabilities are recognized for all
taxable temporary differences and deferred tax assets are
recognized for deductible temporary differences to the extent
that it is probable that taxable income will be available in
future periods against which the deductible temporary
differences can be utilized or the tax asset will be realized in
future periods.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Indonesian tax regulations as of the date of this Annual
Report, a dividend distributed by a company to a corporate
shareholder, that has a minimum share ownership of 25% and has
businesses other than as a holding company, is not subject to
tax whereas a capital gain on the sale of shares is subject to
tax at the normal corporate tax rate. As long as we continue to
hold our investments in our affiliated companies with a minimum
share ownership of 25% and have businesses other than as a
holding company, and dividend distributions from a company to a
corporate shareholder that meets the criteria described above
continues to be not subject to tax, we do not need to record a
deferred tax liability in respect of the undistributed earnings
of these affiliated companies.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A change in our intention to hold an investment or other facts
and circumstances may lead TELKOM to determine that we no longer
expect to realize our interest in the undistributed earnings of
the particular affiliated company in a manner which enables us
to take advantage of the zero percent tax rate applicable to
dividend distributions. Such a change in the future would
require us to recognize a deferred tax liability with a
commensurate charge to our income statement.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Deferred tax is calculated at the enacted tax rates at the
balance sheet date. If enacted tax rates changed, TELKOM would
adjust its deferred tax assets and liabilities, through the
income tax expense in the period of change, to reflect the
enacted tax rate expected to be in effect when the deferred tax
items reverse.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Legal Contingencies</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of the date of this Annual Report, we are involved in certain
legal proceedings and have accrued amounts that represent our
estimate of the probable outcome of these matters. Such
estimates of outcome are derived from consultation with outside
counsel, as well as an assessment of litigation and settlement
strategies. While we believe that our current accruals are
adequate, a future event or change in the facts and
circumstances may require us to make additional accruals that
would be charged to our income statement in the future. See
Note&nbsp;51 to the consolidated financial statements and
Item&nbsp;8. &#147;Financial Information&nbsp;&#151; A.
Consolidated statements and other financial
information&nbsp;&#151; Material Litigation&#148;.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>C.</B></TD>
    <TD>
    <B>Research and Development and Intellectual Property</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM makes investments to improve its product and service
offerings. Such expenditure amounted to approximately
Rp.2.1&nbsp;billion in 2003, Rp.27.8&nbsp;billion in 2004 and
Rp.8.4&nbsp;billion (US$0.9&nbsp;million) in 2005. In 2005,
these expenditures related to video conferencing, SMS
development, CMS system, CDMA lab, measuring system and other
content development.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>D.</B></TD>
    <TD>
    <B>Trend Information</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A number of developments have had and may have in the future a
material impact on TELKOM&#146;s results of operations,
financial condition and capital expenditures. These developments
include:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    upgrading of the network with soft switching technology;</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    increasing relative contribution of Telkomsel to our
    consolidated revenues;</TD>
</TR>

</TABLE>

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<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    higher domestic fixed line tariffs beginning in 2004 and ability
    of Government to implement additional planned tariff increases;</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the ability of the Government to implement regulatory changes
    regarding interconnection, access codes and licenses for 3G
    services;</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    implementation of cost-based interconnection tariff;</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    changes in foreign exchange rates and interest rates;</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    increase in the usage of high speed broadband Internet in
    Indonesia;</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    acquisition of Pramindo;</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    acquisition of AriaWest;</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    acquisition of Dayamitra</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    acquisition of KSO IV;</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    competition in the market for DLD services;</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    expansion of TELKOM&#146;s IDD services;</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    fixed wireless development and deployment; and</TD>
</TR>

<TR>
    <TD style="font-size: 3.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    implementation of competence-based human resource management.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
See Item&nbsp;5. &#147;Operating and Financial Review and
Prospects&nbsp;&#151; A. Operating Results&#148;.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>E.</B></TD>
    <TD>
    <B>Off-Balance Sheet Arrangements</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM is party to a number of operating leases. These operating
leases relate principally to motor vehicles, computers,
circuits, towers, land and buildings. TELKOM believes some of
these operating leases are material to its business.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM has entered into a partnership agreement with Motorola,
Inc., Ericsson Radio A.B., Siemens Aktiengesellschaft (AG) and
Nokia Oyj whereby TELKOM is obligated to purchase certain
cellular equipment and services. In addition, TELKOM has entered
into agreements pursuant to which TELKOM is committed to pay for
services relating to the launch of the TELKOM-2 Satellite and
the construction of a PSTN network for each of Regional Division
II and V. For more details relating to these agreements, see
Item&nbsp;10. &#147;Additional Information&nbsp;&#151; C.
Material Contracts&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Except as disclosed above, TELKOM does not have off-balance
sheet arrangements that are material.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B>F.</B></TD>
    <TD>
    <B>Tabular Disclosure of Contractual Obligations</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following summarizes TELKOM&#146;s contractual obligations
at December&nbsp;31, 2005 and the effect such obligations are
expected to have on liquidity and cash flow in future periods:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="41%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>Payments Due by Period</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Less than</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>More than</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2" align="center" nowrap><B>Contractual Obligations</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>1&nbsp;year</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>1-3&nbsp;years</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>3-5&nbsp;years</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>5&nbsp;years</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="18" align="center" nowrap><B>(Rp. billion)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Short-Term
    Loans<SUP style="font-size: 85%; vertical-align: text-top">(1)(6)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>173.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>173.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-Term
    Debts<SUP style="font-size: 85%; vertical-align: text-top">(2)(6)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,307.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,210.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,134.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,899.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,063.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capital Lease
    Obligations<SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>251.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>74.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>114.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest on Short-term Loans, Long-term Debts and Capital Lease
    Obligations</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,437.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>924.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,152.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>593.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>766.7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating
    Leases<SUP style="font-size: 85%; vertical-align: text-top">(4)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,815.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>474.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>946.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>543.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>851.4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unconditional Purchase
    Obligations<SUP style="font-size: 85%; vertical-align: text-top">(5)</SUP></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,594.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,594.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,581.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,394.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,280.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,111.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,796.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">139

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Relates to liabilities under short term loans obtained from Bank
    Central Asia and Bank Niaga. See Note&nbsp;20 to the
    consolidated financial statements.</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    See &#147;&#151;&nbsp;Liquidity and Capital
    Resources&nbsp;&#151; Indebtedness&#148; and Notes&nbsp;22, 23,
    24 and 25 to the consolidated financial statements.</TD>
</TR>

<TR valign="top">
    <TD>(3)&nbsp;</TD>
    <TD align="left">
    Relates to the leases of the repeaters used for TELKOM&#146;s
    telecommunication networks for TELKOMFlexi.</TD>
</TR>

<TR valign="top">
    <TD>(4)&nbsp;</TD>
    <TD align="left">
    Relates primarily to leases of towers, computers, vehicles,
    land, buildings, office equipment and circuits.</TD>
</TR>

<TR valign="top">
    <TD>(5)&nbsp;</TD>
    <TD align="left">
    Relates to commitments of TELKOM to suppliers and vendors for
    the purchase of telecommunications-related equipment and
    infrastructure.</TD>
</TR>

<TR valign="top">
    <TD>(6)&nbsp;</TD>
    <TD align="left">
    Excludes contractually committed rate of interest.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;
In addition to the above contractual obligations, as of
December&nbsp;31, 2005, Telkom had long-term liabilities for
pension, post-retirement health care benefits and long service
awards. Telkom expects to contribute Rp.568.8&nbsp;billion to
its post-retirement health care benefits plan and
Rp.693.5&nbsp;billion to its defined benefit pension plan in
2006. See Notes&nbsp;42, 43, 44 and 54 to the consolidated
financial statements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='110'></A>
</DIV>

<!-- link1 "ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES" -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>ITEM 6.</B></TD>
    <TD>
    <B>DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES</B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B>A.</B></TD>
    <TD>
    <B>Directors and Senior Management</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In accordance with Indonesian law, the Company has a two-tier
board structure, consisting of a Board of Commissioners and a
Board of Directors. The executive management functions are
carried out by the Board of Directors, whose members are
comprised of the top executives of the Company, comparable to
the chief executive officer, chief financial officer and other
such officers of corporations incorporated under the laws of
many of the States in the United States of America.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Board of Commissioners</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM&#146;s Articles of Association (the
&#147;Articles&#148;), referring to the Indonesian Company Law,
states that the principal statutory duties of the Board of
Commissioners are to supervise the policies of the Board of
Directors in the operation and management of the Company and to
give advice to the Board of Directors. In carrying out its
supervisory activities, the Board of Commissioners is
accountable to the stockholders of the Company.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Board of Commissioners, which supervises the management of
TELKOM and the implementation of TELKOM business plan by the
Board of Directors, does not have day-to-day management
functions or authority, except in limited circumstances where
all members of the Board of Directors have been suspended for
any reason.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The current Board of Commissioners of TELKOM consists of one
President Commissioner and four Commissioners, two of whom are
independent commissioners.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to the Articles, each Commissioner is appointed for a
term commencing from the date of the appointment by the general
meeting of stockholders until the closing of the third annual
general meeting of stockholders following the date of
appointment, without prejudice to the right of the general
meeting of stockholders to discharge a Commissioner at any time
before his or her term of office expires. If the position of a
Commissioner becomes vacant for any reason, the Articles further
provide that within 60&nbsp;days of the occurrence of such
vacancy, an announcement that there will be notice for a general
meeting of stockholders must be made to nominate a successor.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to the Articles, meetings of the Board of Commissioners
are presided over by the President Commissioner. If the
President Commissioner is absent, another member of the Board of
Commissioners chosen from the Commissioners present presides
over the meeting.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Meetings of the Board of Commissioners must be held at least
once every three months and at any other time (i)&nbsp;upon
request of the President Commissioner, (ii)&nbsp;upon request of
one-third of the members of the Board of Commissioners,
(iii)&nbsp;upon written request of the Board of Directors, or
(iv)&nbsp;upon request of a shareholder or a group of
stockholders holding at least one-tenth of the
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">140

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
outstanding shares of TELKOM with valid voting rights. The
quorum for all Board of Commissioners meetings is more than
one-half of the total number of the Commissioners then
represented in person or by proxy granted to one of the other
Commissioners of TELKOM at such meeting.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Resolutions of a meeting of the Board of Commissioners shall be
by consensus. If consensus cannot be reached, it shall be by the
affirmative vote of a majority of the members of the Board of
Commissioners present or represented at the meeting. In the
event of a tie, the proposed resolution shall be deemed to have
been rejected.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The members of the Board of Commissioners as of
December&nbsp;31, 2005 and May&nbsp;31, 2006 were:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Age as of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="center" nowrap><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>January&nbsp;1, 2006</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Title</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Since</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Tanri Abeng</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>64</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    President Commissioner</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    March&nbsp;10, 2004</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    P. Sartono</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>61</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Independent Commissioner</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    June&nbsp;21, 2002</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Arif Arryman</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Independent Commissioner</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    June&nbsp;21, 2002</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Anggito Abimanyu</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Commissioner</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    March&nbsp;10, 2004</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Gatot Trihargo</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Commissioner</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    March&nbsp;10, 2004</TD>
</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Tanri Abeng</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;Abeng has been President Commissioner of TELKOM since
March&nbsp;10, 2004. From 1980 to 1998, Mr.&nbsp;Abeng served as
President Director (1980-1991) and President Commissioner
(1991-1998) of PT&nbsp;Multi Bintang Indonesia, Indonesia&#146;s
largest brewery. He also served as President Director of
PT&nbsp;Bakrie &#38; Brothers from 1991 to 1998, was President
Commissioner of PT&nbsp;B.A.T. Indonesia from 1993 to 1998 and
was a Commissioner of PT&nbsp;Sepatu BATA from 1989 to 1998. He
was also a member of Parliament from 1993 to 1999 and was
Minister of State-Owned Enterprises from 1998 to 1999.
Mr.&nbsp;Abeng holds a degree from the University of Hasanudin,
a masters degree in business administration from the State
University of New York, Buffalo and has completed the Advanced
Management Program at the Claremont Graduate School in Los
Angeles.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>P. Sartono</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;P. Sartono has been an Independent Commissioner of
TELKOM since June&nbsp;21, 2002. Mr.&nbsp;P.&nbsp;Sartono became
an employee of TELKOM in 1972 and has served in various
management positions, including as Corporate Secretary from 1991
to 1995, until his retirement in 2000. During his tenure at
TELKOM, he also held various positions at Directorate General of
Post and Communications from 1972 to 1985 and served as
President Director of PT&nbsp;Telekomindo Primabhakti.
Mr.&nbsp;P.&nbsp;Sartono holds a degree in law from the
University of Indonesia and a Master of Management (Marketing)
degree from IPWI Jakarta and a Master of Law degree from the
Institute Business Law and Management (Sekolah Tinggi Ilmu Hukum
IBLAM) in Jakarta.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Arif Arryman</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;Arryman has been an Independent Commissioner of TELKOM
since June&nbsp;21, 2002. In addition he has served as
Independent Commissioner of PT&nbsp;Bank BNI since 2001.
Previously, he served as an advisor to the Coordinating Minister
for Economy and a member of the assistance team to the Ministry
of Finance. Mr.&nbsp;Arryman graduated with a degree in
Industrial Engineering from Bandung Institute of Technology, a
masters degree in Engineering from Asia Institute of Technology,
Bangkok, Diploma d&#146;Etude Approfondie from University
Paris-IX Dauphine France and a doctoral degree in Economics from
University of Paris-IX Dauphine France.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">141
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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>Anggito Abimanyu</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;Abimanyu has been a Commissioner of TELKOM since
March&nbsp;10, 2004. As of the date of this Annual Report, he is
the Head of the Agency for Research in Economics, Finance and
International Cooperation of the Ministry of Finance and has
been a member of the expert staff to the Finance Minister since
2000. Mr.&nbsp;Abimanyu previously served as a member of the
Board of Commissioners of Bank Lippo and of Bank Internasional
Indonesia. Mr.&nbsp;Abimanyu is also a lecturer in the Faculty
of Economics of Gadjah Mada University. Mr.&nbsp;Abimanyu holds
both a bachelor and a master degree in economics from Gadjah
Mada University, a master in science degree in International
Development from the University of Pennsylvania and a Ph.D.
degree in Environmental Economics from the University of
Pennsylvania.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>Gatot Trihargo</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;Trihargo has been a Commissioner of TELKOM since
March&nbsp;10, 2004. As of the date of this Annual Report, he
serves as a member of the Special Staff of the Ministry of
<FONT style="white-space: nowrap">State-Owned</FONT>
Enterprises. Mr.&nbsp;Trihargo holds a degree in accounting from
Sekolah Tinggi Akuntansi Negara, Jakarta, and a masters degree
in Accountancy and Financial Information Systems from Cleveland
State University in Ohio.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Board of Commissioners&#146; Committees</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of the date of this Annual Report, the Board of Commissioners
has three standing committees: the Audit Committee, the Review
and Planning Committee and the Nomination and Renumeration
Committee. An Independent Commissioner chairs each committee. In
addition, external members to the Audit Committee, in order to
be considered independent under applicable Indonesian rules:
(a)&nbsp;must not be a member of any Indonesian registered
public accountant that has provided audit and/or
<FONT style="white-space: nowrap">non-audit</FONT> services to
TELKOM within one year prior to his appointment to the Audit
Committee; (b)&nbsp;must not have been a TELKOM employee within
one year prior to his appointment to the Audit Committee;
(c)&nbsp;must not own, directly or indirectly, any shares in
TELKOM; and (d)&nbsp;must not have any business relationship
that relates to TELKOM&#146;s businesses.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of the date of this Annual Report, the Audit Committee of the
Board of Commissioners is composed of seven members:
(i)&nbsp;Mr.&nbsp;Arif Arryman, an Independent Commissioner and
the Chairman; (ii)&nbsp;Mr.&nbsp;P. Sartono, an Independent
Commissioner; (iii)&nbsp;Mr.&nbsp;Mohammad Ghazali Latief;
(iv)&nbsp;Mr.&nbsp;Salam; (v)&nbsp;Mr.&nbsp;Dodi Syaripudin;
(vi)&nbsp;Mr.&nbsp;Sahat Pardede and (vii)&nbsp;Mr.&nbsp;Gatot
Trihargo. All of the members of the Audit Committee (except for
Mr.&nbsp;Arif Arryman, Mr.&nbsp;Sartono and Mr.&nbsp;Trihargo)
are independent external members and Mr.&nbsp;Pardede is an
accounting and financial expert. New listing rules adopted
pursuant to
Rule&nbsp;<FONT style="white-space: nowrap">10A-3</FONT> under
the Exchange Act require a foreign private issuer with
securities listed on the NYSE to have an audit committee
comprised of independent directors. The rules became effective
on July&nbsp;31, 2005. Under
Rule&nbsp;<FONT style="white-space: nowrap">10A-3(c)(3),</FONT>
however, foreign private issuers are exempt from the
independence requirements if (i)&nbsp;the home country
government or stock exchange requires the company to have an
audit committee; (ii)&nbsp;the audit committee is separate from
the board of directors and has members from both inside and
outside the board of directors; (iii)&nbsp;the audit committee
members are not elected by the management and no executive
officer of the company is a member of the audit committee;
(iv)&nbsp;the home country government or stock exchange has
requirements for an audit committee independent from the
management of the company and (v)&nbsp;the audit committee is
responsible for the appointment, retention and oversight of the
work of external auditors. TELKOM avails itself of this
exemption as set forth in its Amended Section&nbsp;303A Annual
Written Affirmation, filed with the NYSE on January&nbsp;12,
2006. An Audit Committee Charter (the &#147;Charter&#148;)
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">142

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
that has been adopted by the Board of Commissioners governs the
committee. The Charter outlines the committee&#146;s purpose,
function and responsibilities and specifies that the committee
is responsible for:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Overseeing the Company&#146;s financial reporting process on
    behalf of the Board of Commissioners. As part of its
    responsibilities, the committee will recommend to the Board of
    Commissioners, subject to shareholder approval, the selection of
    TELKOM&#146;s external auditor;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Discussing with TELKOM&#146;s internal and external auditors the
    overall scope and specific plans for their respective audits.
    The committee will also discuss TELKOM&#146;s consolidated
    financial statements and the adequacy of TELKOM&#146;s internal
    controls;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Meeting regularly with TELKOM&#146;s internal and external
    auditors, without management present, to discuss the results of
    their examinations, their evaluation of TELKOM&#146;s internal
    controls and the overall quality of TELKOM&#146;s financial
    reporting; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Carrying out additional tasks that are assigned by the Board of
    Commissioners, especially on financial and accounting related
    matters.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Review and Planning Committee was established on
August&nbsp;1, 2003. The objective of this committee is to
review the company&#146;s
<FONT style="white-space: nowrap">long-term</FONT> plans, as
well as annual business budget plans, following which
recommendations would be made by this committee to the Board of
Directors. The committee is also responsible for supervising and
monitoring the implementation of the business plans of the
company. As of the date of this Annual Report, the Review and
Planning Committee consists of nine members:
(i)&nbsp;Mr.&nbsp;Anggito Abimanyu (the Chairman);
(ii)&nbsp;Mr.&nbsp;Arif Arryman (the Vice Chairman);
(iii)&nbsp;Mr.&nbsp;Yuki Indrayadi (Secretary);
(iv)&nbsp;Mr.&nbsp;P. Sartono; (v)&nbsp;Mr.&nbsp;Kindy Syahrir;
(vi)&nbsp;Mr.&nbsp;Ario Guntoro; (vii)&nbsp;Mr.&nbsp;Adam
Wirahadi; (viii)&nbsp;Mrs.&nbsp;Widuri M. Kusumawati; and
(ix)&nbsp;Mr.&nbsp;Arman Soeriasoemantri. All of the members of
the Review and Planning Committee (except for Mr.&nbsp;Abimanyu,
Mr.&nbsp;Arryman and Mr.&nbsp;Sartono) are independent external
members.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On May&nbsp;20, 2003, following TELKOM&#146;s 2003 Annual
General Meeting of stockholders, the Board of Commissioners
<FONT style="white-space: nowrap">re-established</FONT> the
Nomination and Remuneration Committee. As of the date of this
Annual Report, the Nomination and Remuneration Committee is
composed of: (i)&nbsp;Mr.&nbsp;Tanri Abeng, the President
Commissioner and the Chairman; (ii)&nbsp;Mr.&nbsp;P. Sartono, an
Independent Commissioner and the Secretary; and
(iii)&nbsp;Mr.&nbsp;Gatot Trihargo, a Commissioner. The
committee was tasked with: (a)&nbsp;formulating selection
criteria and nomination procedures for strategic positions in
the Company based on good corporate governance principles;
(b)&nbsp;assisting the Board of Commissioners and consulting
with the Board of Directors in candidate selection for strategic
positions in the Company; and (c)&nbsp;formulating a
remuneration system for the Board of Directors based on fairness
and performance.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Commissioners&#146; business address is 5th Floor, Grha
Citra Caraka Building, Jalan Gatot Subroto Kav. 52, Jakarta
12710, Indonesia.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Board of Directors</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Board of Directors is comprised of one President Director
and six Directors. Directors are elected and dismissed by
stockholder resolutions at a general meeting of stockholders at
which the holder of the Series&nbsp;A Dwiwarna Share is present
and such holder approves the aforementioned stockholder
resolutions. In order to be eligible for election, candidates
for Director must be nominated by the holder of the
Series&nbsp;A Dwiwarna Share. Each Director is appointed for a
term commencing from the date of appointment by the general
meeting of stockholders until the closing of the fifth annual
general meeting of stockholders after the date of appointment,
without prejudice to the right of the general meeting of
stockholders to discharge a Director at any time before his/her
term of office expires.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The principal functions of the Board of Directors are to lead
and manage TELKOM and to control and manage TELKOM&#146;s
assets. The Board of Directors is responsible for the
<FONT style="white-space: nowrap">day-to-day</FONT> management of
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">143

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
TELKOM under the supervision of the Board of Commissioners. The
Articles provide that the Board of Directors shall consist of at
least two Directors, one of whom shall be the President Director.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The President Director, or in case of his absence, another
Director as provided for in the Articles shall have authority to
represent TELKOM and execute documents on behalf of TELKOM,
subject to the provisions of the Articles. The President
Director shall preside over meetings of the Board of Directors
or in his absence, any other member of the Board of Directors
appointed from among and by those present may preside over such
meetings.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Articles provide that meetings of the Board of Directors may
be held whenever considered necessary upon the request of
(i)&nbsp;the President Director, (ii)&nbsp;at least
<FONT style="white-space: nowrap">one-third</FONT> of the
members of the Board of Directors, (iii)&nbsp;the Board of
Commissioners, or (iv)&nbsp;written notice from any shareholder
or group of shareholders holding at least
<FONT style="white-space: nowrap">one-tenth</FONT> of the
outstanding shares of TELKOM with valid voting rights. The
Articles further provide that the quorum for all Directors&#146;
meetings is more than
<FONT style="white-space: nowrap">one-half</FONT> of the members
of the Board of Directors present or represented in person or by
proxy granted to another Director of TELKOM in such meeting. At
Directors&#146; meetings, each Director shall have one vote and
one additional vote for each other Director he represents as
proxy.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Resolutions of a meeting of the Board of Directors shall be by
consensus. If consensus cannot be reached, it shall be by the
affirmative vote of a majority of the members of the Board of
Directors present or represented at the meeting. In the event of
a tie, the matter shall be determined by the Chairman of the
meeting.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM has a disclosure committee comprised of 14 senior members
from various departments and chaired by the CFO. The disclosure
committee&#146;s role is to support TELKOM&#146;s management in
designing and evaluating TELKOM&#146;s disclosure controls and
procedures and participating in the disclosure process. TELKOM
formally established its disclosure committee on
February&nbsp;18, 2005. Since its formal establishment, the
disclosure committee has established internal work procedures
relating to the preparation of TELKOM&#146;s annual report on
Form&nbsp;20-F, and participated in the review and preparation
of TELKOM&#146;s annual report on Form&nbsp;20-F. The
establishment of the disclosure committee formalized the
previous disclosure process where designated senior employees
from various departments were responsible for assisting with the
necessary disclosures.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The members of the Board of Directors as of December&nbsp;31,
2005 and May&nbsp;31, 2006 were:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="30%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="34%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Age as of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="center" nowrap><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>January&nbsp;1, 2006</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Title</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Since</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    Arwin Rasyid</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    48</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    President Director</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    June&nbsp;24, 2005</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Garuda Sugardo</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    56</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Vice President Director and<BR>
    Chief Operating Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    June&nbsp;24, 2005</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rinaldi Firmansyah</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    45</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Director of Finance</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    March&nbsp;10, 2004</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Arief Yahya</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    44</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Director of Enterprise &#38; Wholesale</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    June&nbsp;24, 2005</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Abdul Haris</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    50</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Director of Network &#38; Solution</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    March&nbsp;10, 2004</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    John Welly</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    51</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Director of Human Resources</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    June&nbsp;24, 2005</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Guntur Siregar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    54</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Director of Consumer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    June&nbsp;24, 2005</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>Arwin Rasyid</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;Rasyid was appointed the President Director of TELKOM
on June&nbsp;24, 2005. He previously served as Vice President
Director of PT&nbsp;Bank Negara Indonesia from 2003 to 2005,
President Director of Bank Danamon Indonesia from 2000 to 2003,
Vice Chairman of Badan Penyehatan Perbankan Nasional (the
Indonesian Banks Restructuring Agency) in 2000, Vice President
Director of Bank Niaga from 1998 to 1999, Assistant Vice
President of Bank of America from 1986 to 1987 as well in
various positions in Bank Niaga since 1987. Mr.&nbsp;Rasyid
graduated with a degree in economics from the University of
Indonesia. He also holds a Master of Arts degree in
International Economics and a Master of Business Administration
degree in International Business from University of Hawaii, USA.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>Garuda Sugardo</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;Sugardo was appointed the Chief Operating Officer and
Vice President Director of TELKOM on June&nbsp;24, 2005. He
joined TELKOM in 1977 and has held several positions in various
departments. He previously served as Senior Consultant Marketing
in the Management Consulting Center of TELKOM, Director of
Telecommunication Service Business of TELKOM from 2002 to 2004,
Director of Operation and Technical of Indosat as well as a
number of positions in TELKOM from 1977-2000. Mr.&nbsp;Sugardo
graduated with a degree in Electrical Engineering from the
University of Indonesia.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>Rinaldi Firmansyah</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;Firmansyah has been Director of Finance of TELKOM since
March&nbsp;10, 2004. He previously served as Vice President
Commissioner, President Director and Director of Investment
Banking of PT&nbsp;Bahana Securities from 2003 to 2004, 2001 to
2003 and 1997 to 2001, respectively, and Commissioner and Head
of the Audit Committee of PT&nbsp;Semen Padang in 2003.
Mr.&nbsp;Firmansyah graduated with a degree in electrical
engineering from the Bandung Institute of Technology and a
Masters degree in business administration from the Indonesian
Institute of Management Development, Jakarta.
Mr.&nbsp;Firmansyah is also a Chartered Financial Analyst (CFA).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>Arief Yahya</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;Yahya was appointed the Director of Enterprise &#38;
Wholesale of TELKOM on June&nbsp;24, 2005. He joined TELKOM in
1986 and has held several positions in various departments.
Previously, he served as TELKOM&#146;s Head of Regional Division
V (East Java). Mr.&nbsp;Yahya graduated with a degree in
electrical engineering from Bandung Institute of Technology and
a Masters degree in Telecommunication Engineering from
University of Surrey.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>Abdul Haris</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;Haris was appointed the Director of Network &#38;
Solution of TELKOM on June&nbsp;24, 2005. He joined TELKOM in
1980 and has held several positions in various departments. He
previously served as Director of Telecommunications and Network
Business of TELKOM from 2004 to 2005, and as Deputy Head of
TELKOM&#146;s Regional Division&nbsp;II (Jakarta).
Mr.&nbsp;Haris has a degree in electrical engineering from North
Sumatra University and a Masters degree in business
administration from Prasetya Mulya Management Institute.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>John Welly</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;Welly was appointed the Director of Human Resources of
TELKOM on June&nbsp;24, 2005. He joined TELKOM in 1981 and has
held several positions in various departments. He previously
served as President Director of PT&nbsp;INTI, Director of
Operations and Marketing of TELKOM from 1998 to 2000,
Commissioner of Telkomsel in 1998, Director of Human Resources
and Support Divisions/ Senior Executive Vice President for Human
Resources and Support of TELKOM from 1995 to 1998, and
Commissioner of PT&nbsp;Aplikanusa Lintasarta from 1995 to 1996.
Mr.&nbsp;Welly graduated with a degree in Electrical Engineering
from the Bandung Institute of Technology and a Masters degree in
telecommunications and information from Essex University, UK.
See &#147;&nbsp;&#151; D. Employees&nbsp;&#151; On-going
Investigations&#148; and Item&nbsp;3. &#147;Key
Information&nbsp;&#151; D. Risk Factors&nbsp;&#151; Risks
relating to TELKOM and its subsidiaries&nbsp;&#151; Certain
TELKOM employees, including present and former TELKOM directors,
are subject to <FONT style="white-space: nowrap">on-going</FONT>
police investigations&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>Guntur Siregar</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;Siregar was appointed the Director of Consumer of
TELKOM on June&nbsp;24, 2005. He joined TELKOM in 1975 and has
held several positions in various departments. He previously
served as Senior Consultant Financial Management in Management
Consulting Center of TELKOM, Director of Finance of TELKOM from
2002 to 2004, Director of Commerce of Indosat from 2000 to 2002,
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
Commissioner of PT Aplikanusa Limtasarta from 1996 to 2000, Head
of Regional Division&nbsp;II (Jakarta) from 1996 to 2000, and
Head of Regional Division&nbsp;I (Sumatera) from 1995 to 1996.
Mr.&nbsp;Siregar graduated with a degree in Electrical
Engineering from the Bandung Institute of Technology. See
&#147;&nbsp;&#151; D. Employees&nbsp;&#151; On-going
Investigations&#148; and Item&nbsp;3. &#147;Key
Information&nbsp;&#151; D. Risk Factors&nbsp;&#151; Risks
relating to TELKOM and its subsidiaries&nbsp;&#151; Certain
TELKOM employees, including present and former TELKOM directors,
are subject to <FONT style="white-space: nowrap">on-going</FONT>
police investigations&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
None of the Directors has a service contract with the Company
nor are any such contracts proposed. The Directors&#146;
business address is Jalan Japati, 1, Bandung 40133, Indonesia.
None of the Directors or Commissioners are related to one
another.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Compensation</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Each Commissioner is granted a monthly honorarium and certain
other allowances and is paid an annual bonus if TELKOM surpasses
certain financial and operating targets, the amounts of which
are determined by the stockholders at the general meeting of
stockholders. Each Commissioner also receives a lump-sum bonus
paid at the end of the Commissioner&#146;s term pursuant to an
MoF letter which 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 (tantiem)
if TELKOM surpasses certain financial and operating targets, the
amounts of which are determined by the stockholders at the
general meeting of the stockholders. 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 stockholders. No
fees are paid to the Commissioners or Directors for their
attendance at their respective board meetings. In addition,
Directors receive certain other
<FONT style="white-space: nowrap">in-kind</FONT> benefits, such
as housing, car and driver. For the year ended December&nbsp;31,
2005, the aggregate compensation paid by TELKOM and its
consolidated subsidiaries to all of their Commissioners and
Directors was Rp.71.9&nbsp;billion (US$7.3&nbsp;million), while
the amount paid by TELKOM (unconsolidated) to all its
Commissioners and Directors was approximately
Rp.28.96&nbsp;billion (US$2.9&nbsp;million), in each case
including bonuses and the cost of benefits provided to
Directors, such as housing facilities.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company and its subsidiaries provide honoraria and
facilities to support the operational duties of the Board of
Commissioners. The total of such benefits amounted to
Rp.14.0&nbsp;billion, Rp.22.7&nbsp;billion and
Rp.19.7&nbsp;billion in 2003, 2004 and 2005, respectively, which
reflected 0.1%, 0.1% and 0.1% of total operating expenses in
2003, 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company and its subsidiaries provide salaries and facilities
to support the operational duties of the Board of Directors. The
total of such benefits amounted to Rp.45.6&nbsp;billion,
Rp.50.3&nbsp;billion and Rp.52.1&nbsp;billion in 2003, 2004 and
2005, respectively, which reflected 0.3%, 0.3% and 0.2% of total
operating expenses in 2003, 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Board practices</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Individual Directors are charged with specific 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 absent director. If,&nbsp;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 stockholders to elect a
new Board of Directors within 60&nbsp;days.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Board of Directors is required to obtain the written
approval of the Board of Commissioners for the following
actions: (i)&nbsp;buying or selling the shares of listed
companies in excess of the amount stipulated by the Board of
Commissioners; (ii)&nbsp;participating in or disposing of other
capital investments; (iii)&nbsp;establishing, transferring its
interests in or dissolving subsidiaries; (iv)&nbsp;transferring,
trading, disposing or acquiring any business segments;
(v)&nbsp;entering into licensing agreements, management
contracts or similar agreements with other entities;
(vi)&nbsp;selling or otherwise disposing of fixed assets in
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
excess of the amount stipulated by the Board of Commissioners;
(vii)&nbsp;ceasing to collect or writing off bad debts from the
Company&#146;s books or inventory in excess of the amount
stipulated by the Board of Commissioners; (viii)&nbsp;binding
the Company as surety in excess of the amount stipulated by the
Board of Commissioners; and (ix)&nbsp;assuming or granting
medium 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&#146;s work plan and budget, as
approved by the Board of Commissioners. In addition, any of the
above transactions which involves 10% or more of the
Company&#146;s revenues or 20% or more of stockholders&#146;
equity or such other amount as specified in Indonesian capital
market regulations must be authorized by the stockholders at the
general meeting of stockholders. In the performance of its
duties, the Board of Directors must act in the interests of the
Company.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Articles provide that members of the Board of Directors are
prohibited from assuming the following: (i)&nbsp;a position as
director of another state-owned corporation or private
companies, (ii)&nbsp;any position within the structural or
functional department of the central or district government, or
(iii)&nbsp;other positions outside TELKOM which may directly or
indirectly raise conflicts of interest with TELKOM and/or which
violate the provisions of applicable laws and regulations. The
Articles further provide that if members of the Board of
Directors wish to assume any other position not prohibited above
or wish to obtain an exemption from the foregoing prohibitions,
such Director would require permission from the Board of
Commissioners. In&nbsp;addition, such appointment shall be
reported to the general meeting of stockholders.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, the Articles prohibit a Director with conflicting
interests representing TELKOM in the issues causing such
conflict of interest. In such cases, TELKOM shall be represented
by another member of the Board of Directors with the consent of
the Commissioners. In the event that TELKOM faces a conflict of
interest with all members of its Board of Directors, TELKOM
shall be represented by the Board of Commissioners or a member
of the Board of Commissioners chosen by the Commissioners in the
issues causing such conflict.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Each Director is appointed for a term commencing from the date
of appointment by the general meeting of stockholders until the
closing of the fifth annual general meeting of stockholders
after the date of appointment, without prejudice to the right of
the general meeting of stockholders to discharge a Director at
any time before his/her term of office expires. For further
information on the composition and terms of the Board of
Directors, see Item&nbsp;6. &#147;Directors, Senior Management
and Employees&nbsp;&#151; A.&nbsp;Directors and Senior
Management&nbsp;&#151; Board of Directors&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
None of the Directors or Commissioners has any substantial
interest, direct or indirect, in any company carrying on a
similar trade as TELKOM.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>D.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employees</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, TELKOM and its subsidiaries had
34,004 employees in total, of which 28,179 were employed by
TELKOM, and 5,825 were employed by TELKOM&#146;s subsidiaries.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2004, TELKOM and its subsidiaries had
34,657 employees in total, of which 29,375 were employed by
TELKOM, and 5,282 were employed by TELKOM&#146;s subsidiaries.
As of December&nbsp;31, 2003, TELKOM and its subsidiaries had
35,204 employees in total, of which 30,820 were employed by
TELKOM, and 4,384 were employed by TELKOM&#146;s subsidiaries.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The table below sets forth a breakdown of TELKOM&#146;s
employees by position as at December&nbsp;31, 2005:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="29%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>TELKOM regions as at</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>KSO regions VII as at</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>TELKOM&#146;s subsidiaries as at</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>December&nbsp;31, 2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>December&nbsp;31, 2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>December&nbsp;31, 2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Senior management</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>148</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Middle management</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,095</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>316</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Supervisors</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,605</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>839</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,011</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Others</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,118</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,292</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,460</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,966</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,213</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,825</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM&#146;s 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 partner and TELKOM has no obligation to
continue their employment at the end of the KSO period.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In general, TELKOM employees receive a base salary and
salary-related allowances, a bonus and various benefits,
including a pension plan and a post-retirement health care plan,
medical benefits for themselves and certain members of their
immediate family, housing allowance, other allowances and
certain other benefits, including those related to performance
of the employee&#146;s working&nbsp;unit.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 five
years, the size of the annual bonus pool has ranged from
Rp.114.8&nbsp;billion to Rp.304.4&nbsp;billion. In 2005, bonuses
were paid by TELKOM to all employees including TELKOM&#146;s
employees in KSO and Non-KSO divisions. 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 staff level for each
Division are then determined.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Except in connection with its initial public offering in 1995,
TELKOM does not maintain an employee share scheme for any of its
employees or senior management.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM&#146;s mandatory retirement age for all employees is 56.
TELKOM sponsors a defined benefit pension plan and a defined
contribution pension plan. The defined benefit pension plan is
for permanent employees hired prior to July&nbsp;1, 2002. The
amount of the pension entitlement under the defined benefit
pension plan is based on the employee&#146;s years of service
and salary level upon retirement and is transferable to
dependents upon the employee&#146;s death. The main sources of
pension fund are the contributions from the employees and
TELKOM. The participating employees contribute 18% of basic
salary (prior to March 2003 the employee contribution rate was
8.4%) and TELKOM contributes the remaining amount required to
fund the plan. TELKOM&#146;s contributions to the pension fund
were Rp.486.3&nbsp;billion, Rp.845.7&nbsp;billion and
Rp.698.5&nbsp;million (US$71.1&nbsp;million), for the years
ended December&nbsp;31, 2003, 2004 and 2005, respectively. See
Note&nbsp;42 to the consolidated financial statements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Effective January&nbsp;1, 2003, TELKOM (a)&nbsp;increased the
minimum pension benefit for retired employee to approximately
Rp.425,000 per month and (b)&nbsp;increased pension benefits for
employees who retired prior to August&nbsp;1, 2000 by 50%.
Current employees who effectively retired on or after
July&nbsp;1, 2002 receive an increase of monthly pension benefit
amounting to twice the amount of their basic monthly salary.
This policy applied to employees who retired at the normal
pension age&nbsp;of&nbsp;56.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The defined contribution plan is provided for employees hired
with permanent status on or after July&nbsp;1, 2002. The plan is
managed by a financial institution pension fund (Dana Pensiun
Lembaga Keuangan). The Company&#146;s annual contribution to the
defined contribution plan is determined based on a certain
percentage of the participants&#146; salaries and amounted to
Rp.399&nbsp;million and Rp.971&nbsp;million in 2004 and 2005,
respectively.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">148

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s employees are entitled to receive certain
cash awards based on length of services and after completing
certain years of services which are either paid at the time the
employee reaches a certain anniversary date or upon retirement
or at the time of termination if the employee has met the
required number of years of service.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM also provides
<FONT style="white-space: nowrap">post-retirement</FONT>
healthcare benefits for all of its retired employees, including
their immediate family. There are two types of funding for
<FONT style="white-space: nowrap">post-retirement</FONT>
healthcare benefits: (i)&nbsp;for employees hired before
November&nbsp;1, 1995 who retired prior to June&nbsp;3, 1995 or
who have 20&nbsp;years of service for those retired after
June&nbsp;3, 1995, such benefits are funded by the TELKOM
Healthcare Foundation; (ii)&nbsp;for employees hired before
November&nbsp;1, 1995 who retire with years of service of less
than 20&nbsp;years; and for employees hired after
November&nbsp;1, 1995, such benefits will be granted in the form
of an insurance allowance by TELKOM. TELKOM&#146;s contributions
(including contributions paid by all KSO units) to the plan for
employees hired before November&nbsp;1, 1995 who retired prior
to June&nbsp;3, 1995, and who have had 20&nbsp;years of service
when they retired after June&nbsp;3, 1995 were
Rp.188.5&nbsp;billion, Rp.724.5&nbsp;billion and
Rp.435.9&nbsp;billion (US$44.3&nbsp;million), for the years
ended December&nbsp;31, 2003, 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In May 2000, TELKOM employees formed a union named &#147;Serikat
Karyawan TELKOM&#148; or &#147;SEKAR&#148;. The formation of
SEKAR is in accordance with the Presidential Decree No.&nbsp;83
of 1998 regarding ratification of ILO Convention No.&nbsp;87 of
1948 concerning the freedom to form a union and the protection
of the right to form an organization. Membership with SEKAR is
not compulsory. TELKOM believes that its relations with SEKAR
are good. However, there can be no assurance that the activities
of employee unions will not materially and adversely affect
TELKOM&#146;s business, financial condition and prospects.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT style="white-space: nowrap">On-going</FONT>
Investigations</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
There are on-going investigations by the West Java Police
Department as to the conduct of TELKOM&#146;s Director of Human
Resources Development, TELKOM&#146;s Director of Consumer, and
several other TELKOM employees (including one former TELKOM
director and one former President Director of Napsindo). As the
details of the investigations have not been made public, TELKOM
does not know the full nature or extent of the investigations or
the matters to which they relate, or whether any charges are
likely to be filed. Based on press reports, TELKOM understands
that the investigations relate principally to an alleged
violation of anti-corruption law regarding (i)&nbsp;the
retention by TELKOM of a consultant and an alleged overpayment
without compliance with proper procedures; and (ii)&nbsp;the
alleged provision of interconnection services to Napsindo
(TELKOM&#146;s subsidiary) and Globalcom (a Malaysian company)
at an incorrect tariff, and alleged use by Napsindo/ Globalcom
of TELKOM&#146;s network for the provision of illegal VoIP
services. It is also understood that one of the investigations
relates to TELKOM&#146;s guarantee of a bank loan obtained by
Napsindo. To TELKOM&#146;s knowledge, no charges have been filed
against any of the persons investigated by the West Java Police
Department, although several of them (but not our Director of
Consumer) were held in custody in West Java pending completion
of the investigations. On May&nbsp;10, 2006, those individuals
were released from police custody because the police were unable
to find any incriminating evidence to support the alleged
charges during the 120-day period they were held. 120&nbsp;days
is the maximum period allowed for police custody of suspects for
investigation purposes. However, the investigation is ongoing.
There can be no assurance that the police will not find evidence
of wrong-doing, that charges will not be filed in relation to
the foregoing or that such persons or other TELKOM employees
will not be found guilty of any offence. Although TELKOM
believes that the investigations are without merit, to the
extent any of such persons are in custody, or are found guilty
of any offence, TELKOM is and would be deprived of their
services. In addition, TELKOM does not believe that there are
any financial ramifications for TELKOM as a result of the
investigations. See Item&nbsp;3. &#147;Key
Information&nbsp;&#151; D. Risk Factors&nbsp;&#151; Certain
TELKOM employees, including present and former TELKOM directors,
are subject to <FONT style="white-space: nowrap">on-going</FONT>
police investigations&#148;<I>.</I>
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">149

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>E.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share ownership</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All the directors and commissioners individually beneficially
own less than one percent of the shares of the Company and their
respective beneficial share ownership in the Company has not
been disclosed to stockholders or otherwise made public.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='111'></A>
</DIV>

<!-- link1 "ITEM 7. MAJOR STOCKHOLDERS AND RELATED PARTY TRANSACTIONS" -->

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>ITEM 7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MAJOR STOCKHOLDERS AND
RELATED PARTY TRANSACTIONS</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Major stockholders</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>General</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth certain information as of
December&nbsp;31, 2005 with respect to (1)&nbsp;persons known to
the Company to be the owner of more than 5% of the
Company&#146;s Common Stock (whether directly or beneficially
through ADSs); and (2)&nbsp;the total amount of any class of the
Company&#146;s Common Stock owned by the Commissioners and
Directors of the Company as a group.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="22%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="18%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD align="center" nowrap><B>Title of Class</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Identity of Person or Group</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amount Owned</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Percent of Class</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Series&nbsp;A</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Government</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>100.00%</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Series&nbsp;B</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Government</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10,320,470,711</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>51.19%</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Series&nbsp;B</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    JPMCB US Resident (Norbax Inc.)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>1,992,333,765</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>9.88%</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Series&nbsp;B</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    The Bank of New York (BoNY)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>1,291,002,696</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>6.41%</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Series&nbsp;B</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Board of Directors and Commissioners</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>78,332</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>&#60;0.01%</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, a total of 37,414,543 American
Depositary Shares (&#147;ADSs&#148;) and 20,159,999,279
Series&nbsp;B shares (including the Series&nbsp;B shares
represented by these ADSs) and one Series&nbsp;A Dwiwarna share
were outstanding.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Government holds a majority of the outstanding Series&nbsp;B
shares of TELKOM. In addition, the Government is the holder of
the Series&nbsp;A Dwiwarna share, which has special voting
rights. See Item&nbsp;7. &#147;Major Stockholders and Related
Party Transactions&nbsp;&#151; Relationship with the
Government&nbsp;&#151; Government as Shareholder.&#148;
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 stockholders. In
addition, the Company&#146;s Common Stock is also owned by
Pension Funds, Insurance Funds and other institutions, owned or
controlled, directly or indirectly, by the Government.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Government is also the holder of the Series&nbsp;A 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)&nbsp;election and removal of Directors;
(ii)&nbsp;election and removal of Commissioners; and
(iii)&nbsp;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 effective control of these
matters even if it were to beneficially own less than a majority
of the outstanding shares of Common Stock.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM&#146;s total number of shares immediately prior to its
Initial Public Offering was 8,400,000,000, which consisted of
8,399,999,999 Series&nbsp;B shares and 1 Series&nbsp;A Dwiwarna
share, all of which were owned by the Government. On
November&nbsp;14, 1995, the Government sold some of its TELKOM
shares through an initial public offering on the Jakarta Stock
Exchange and Surabaya Stock Exchange. The shares offered
consisted of 933,333,000 new Series&nbsp;B shares and
233,334,000 Series&nbsp;B shares owned by the Government. The
Government also conducted a global share offering listed on the
New York Stock Exchange and the London Stock Exchange for
700&nbsp;million Series&nbsp;B shares owned
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">150

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
by the State of the Republic of Indonesia, which were converted
into 35&nbsp;million ADSs. Each ADS represented 20 Series&nbsp;B
shares at that time.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In December 1996, the Government completed a block sale of
388&nbsp;million Series&nbsp;B shares. In 1997, the Government
distributed 2,670,300 Series&nbsp;B shares as an incentive to
stockholders who did not sell their shares within one year from
the date of the initial public offering.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In May 1999, the Government completed another block sale of
898&nbsp;million Series&nbsp;B shares.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Law No.&nbsp;1/1995 on Limited Liability Companies, the
minimum total par value of TELKOM&#146;s issued share capital
has to be at least 25% of the total par value of TELKOM&#146;s
authorized share capital, or in TELKOM&#146;s case, Rp.5
trillion. To comply with the law, it was resolved at the annual
general meeting of stockholders on April&nbsp;16, 1999 to
increase the issued share capital by way of capitalization of
certain additional paid-in capital. The bonus shares were
distributed to the then existing stockholders in August 1999.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In December 2001, the Government conducted another
<FONT style="white-space: nowrap">block-sale</FONT> of
1,200&nbsp;million shares (or 11.90% of the total outstanding
Series&nbsp;B shares).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On July&nbsp;16, 2002, the Government sold 312&nbsp;million
Series&nbsp;B shares (3.1% of the Series&nbsp;B shares) through
an accelerated placement of TELKOM&#146;s shares to
institutional investors in Indonesia and globally at Rp.3,635
per share.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At TELKOM&#146;s Annual General Meeting of Shareholders in July
2004, the shareholders approved the split of nominal value of
the Series&nbsp;A Dwiwarna share and Series&nbsp;B Shares of the
Company from Rp.500 per share to Rp.250 per share. The number of
authorized shares increased from 40,000,000,000 shares to
80,000,000,000 shares while the number of outstanding shares as
of such date increased from 10,079,999,640 shares to
20,159,999,280 shares. As a result of the split of the nominal
value, the previous one Series&nbsp;A Dwiwarna Share became two
shares with the following criteria: (i)&nbsp;one Series&nbsp;A
Dwiwarna share was preserved as a Series&nbsp;A Dwiwarna share
owned by the Government with a nominal value of Rp.250 per share
and (ii)&nbsp;the other share was issued as one Series&nbsp;B
Share owned by the Government.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At TELKOM&#146;s Extraordinary General Meeting of Shareholders
on December&nbsp;21, 2005, the shareholders approved a share
repurchase plan, pursuant to which TELKOM may repurchase up to a
maximum of 5% of issued and outstanding Series&nbsp;B Shares for
a total repurchase amount not exceeding Rp.5.25 trillion, in
accordance with the rules and regulations of Badan Pengawas
Pasar Modal dan Lembaga Keuangan (&#147;BAPEPAM&#148;) and the
stock exchanges on which TELKOM shares and ADSs are trading, as
well as other applicable regulatory bodies. Such repurchases are
intended to be made from time to time over the eighteen month
period following the announcement. Repurchases may be made at
the discretion of the Company&#146;s management through
purchases of shares on the Jakarta and Surabaya Stock Exchanges,
purchase of shares in ADS form on the New York Stock Exchange,
<FONT style="white-space: nowrap">off-exchange</FONT>
transactions and agreements, or any other legal means the
Company deems appropriate.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Through its share repurchase plan, TELKOM intends to achieve
(i)&nbsp;greater flexibility in managing its capital;
(ii)&nbsp;lower its overall cost of financing and improve its
Earnings Per Share, Earnings Per ADS and Return on Equity and
(iii)&nbsp;flexibility to undertake share repurchases at any
time during the period the approval is in force.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM has appointed Morgan Stanley Services Limited as the
agent and PT.&nbsp;Danareksa Securities as the local broker for
the share repurchase.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to the share repurchase plan, as of June&nbsp;2, 2006,
TELKOM has cumulatively repurchased an aggregate of 8,373,500
Series&nbsp;B shares on either the Jakarta Stock Exchange or the
New York Stock Exchange, representing less than 0.05% of the
total issued and outstanding Series&nbsp;B shares of
20,159,999,279 for a total repurchase amount of
Rp.61.4&nbsp;billion (US$6.2&nbsp;million).
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Relationship with the Government</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Government as
Shareholder</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, the Government held approximately
51.19% of TELKOM&#146;s Common Stock and the Series&nbsp;A share
(the &#147;Dwiwarna Share&#148;), which carries special voting
rights. As its largest shareholder, the Government is interested
in TELKOM&#146;s performance both in terms of the benefits it
provides to the nation as well as its ability to operate on a
commercial basis. The material rights and restrictions that are
applicable to the Common Stock are also applicable to the
Dwiwarna Share, except that the Government may not transfer the
Dwiwarna Share and as the holder of the Dwiwarna Share has a
veto with respect to (i)&nbsp;the nomination, election and
removal of Directors; (ii)&nbsp;the nomination, election and
removal of Commissioners; (iii)&nbsp;the issuance of new shares;
and (iv)&nbsp;amendments to the Articles, including actions to
merge or dissolve TELKOM, increase or decrease its authorized
capital, or reduce its subscribed capital. Accordingly, the
Government will have effective control of these matters even if
it were to beneficially own less than a majority of the
outstanding shares of Common Stock. The Government&#146;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 Dwiwarna
Share.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
It is the policy of the Company not to enter into transactions
with affiliates unless the terms thereof are no less favorable
to the Company than those which could be obtained by the Company
on an <FONT style="white-space: nowrap">arm&#146;s-length</FONT>
basis from an unaffiliated third party. The State Minister of
<FONT style="white-space: nowrap">State-owned</FONT> Enterprise
(&#147;SMSOE&#148;) has advised the Company that the 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&#146;s policy set forth in the preceding sentence.
The SMSOE has adopted a similar policy.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under regulations of BAPEPAM, Indonesia&#146;s capital markets
and financial institution supervisory agency, because the
Company is listed on Indonesia&#146;s stock exchanges, any
transaction in which there is a conflict of interest (as defined
below) must be approved by a majority of the holders of shares
of Common Stock who do not have a conflict of interest in the
proposed transaction, unless the conflict existed before the
Company was listed and was fully disclosed in the offering
documents. A conflict of interest is defined in BAPEPAM
regulations to mean the difference between the economic
interests of the Company and its stockholders, on the one hand
and the personal economic interests of the members of the board
of commissioners, board of directors or principal stockholders
(a holder of 20% or more of the issued shares) and their
respective affiliates jointly or separately on the other. A
conflict of interest also exists when members of the board of
commissioners, board of directors or a principal shareholder of
the Company or their respective affiliates is involved in a
transaction in which their personal interests may be in conflict
with the interest of the Company. BAPEPAM has powers to enforce
this rule; stockholders of the Company may also be entitled to
seek enforcement or bring enforcement action based on
this&nbsp;rule.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Transactions between TELKOM and other state-owned or controlled
enterprises could constitute &#147;conflict of interest&#148;
transactions under the BAPEPAM regulations and the approval of
disinterested stockholders would have to be obtained if a
conflict of interest were to exist. TELKOM believes that many
transactions conducted with state-owned or controlled
enterprises in the ordinary course of their businesses and
TELKOM&#146;s business are on an arms-length, commercial basis
and do not constitute &#147;conflict of interest&#148;
transactions for which a disinterested stockholder vote would be
required. Such transactions might include the sale by TELKOM of
telephone services to state-owned or controlled enterprises or
the purchase by TELKOM of electricity from a state-owned
enterprise. Moreover, the BAPEPAM regulations do not require
TELKOM to obtain disinterested shareholder approval of any
transaction, the principal terms of which were disclosed in the
Indonesian prospectus for the Initial Public Offering. TELKOM
expects, however, in light of the substantial presence of
enterprises owned or controlled by the Government, through the
MoF, SMSOE, or one of its or their affiliates have in Indonesia,
it may be desirable, in connection with the development and
growth of TELKOM&#146;s business,
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
for TELKOM to enter into joint ventures, arrangements or
transactions with such enterprises from time to time. Under such
circumstances, TELKOM may seek to consult BAPEPAM in determining
whether the proposed joint venture, arrangement or transaction
would require a vote of disinterested stockholders under the
terms of the BAPEPAM regulations. If BAPEPAM were of the view
that the proposed joint venture, arrangement or transaction
would not require a vote of disinterested stockholders under its
regulations, TELKOM would proceed without seeking disinterested
stockholders approval. If, however, BAPEPAM were to take the
position that the proposal would require a vote of disinterested
stockholders under its rule, TELKOM would either seek to obtain
the requisite disinterested stockholder approval or abandon the
proposal.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Government as
Regulator</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Government regulates the telecommunications sector through
the MoCI. In particular, the MoCI has authority to issue decrees
implementing laws, which are typically broad in scope, thereby
giving the Ministry considerable latitude in implementing and
enforcing regulatory policy. Pursuant to such decrees, the MoCI
defines the industry structure, determines the tariff formula,
determines TELKOM&#146;s USO obligations and otherwise controls
many factors that may affect TELKOM&#146;s competitive position,
operations and financial condition. Through the DGPT, the
Government regulates frequency and bandwidth allocation and
TELKOM must obtain a license from the DGPT for each of its
services as well as the utilization of frequency and bandwidths.
The Company and other operators are also required to pay radio
frequency usage fees. Telkomsel also holds several licenses
issued by the MoCI (or previously issued by the MoC) for the
provision of its cellular services and from the Indonesian
Investment Coordinating Board relating to investment by
Telkomsel for the development of cellular phone line services
with national coverage, including the expansion of its network
coverage. The Government, through the MoCI as regulator, has the
power to grant new licenses for the establishment of new joint
ventures and other arrangements, particularly in the
telecommunications sector.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company and its subsidiaries pay concession fees for
telecommunication services provided and radio frequency usage
charges to the MoCI. Concession fees amounted to
Rp.239.0&nbsp;billion, Rp.314.7&nbsp;billion and
Rp.558.5&nbsp;billion (US$56.8&nbsp;million) in 2003, 2004 and
2005, respectively. Concession fees accounted for 1.6%, 1.6% and
2.3% of total operating expenses in 2003, 2004 and 2005,
respectively. Radio frequency usage charges amounted to
Rp.371.7&nbsp;billion, Rp.492.6&nbsp;billion and
Rp.548.2&nbsp;billion (US$55.8&nbsp;million) in 2003, 2004 and
2005, respectively. Radio frequency usage charges accounted for
2.5%, 2.5% and 2.2% of total operating expenses in 2003, 2004
and 2005, respectively. Beginning in 2005, the Company and its
subsidiaries pay Universal Service Obligation (&#147;USO&#148;)
charges to the MoCI, which for 2005, amounted to
Rp.307.7&nbsp;billion (US$31.3&nbsp;million), reflecting 1.2% of
total operating expenses in 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Government as Lender</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, the Government had sub-loaned
borrowings from foreign lenders to TELKOM as &#147;two-step
loans&#148; amounting to Rp.5,329.5&nbsp;billion
(US$542.2&nbsp;million), including current maturities. TELKOM is
obligated to pay to the Government interest and principal
repayment that is subsequently remitted by the Government to the
respective lenders. At the end of December 2005, foreign
currency loans represented 66.3% of the outstanding total of
such loans. The remaining 33.7% of such outstanding loans is
denominated in Rupiah. In&nbsp;2005, the annual interest rates
charged on loans repayable in Rupiah range from 8.3% to 10.7%,
on those repayable in U.S.&nbsp;Dollar range from 4.0% to 6.8%,
and on the loan repayable in Japanese Yen is 3.1%. See
Item&nbsp;5. &#147;Operating and Financial Review and
Prospects&nbsp;&#151; B. Liquidity and Capital
Resources&nbsp;&#151; Indebtedness&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Government as
Customer</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Government purchases services from the Company on a
commercial basis. Government entities, in the aggregate,
constitute the largest user of the Company&#146;s services. The
Company,
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
however, deals with the various departments and agencies of the
Government as separate customers and the provision of services
to any single department or agency does not constitute a
material part of TELKOM&#146;s revenues. The Government and
government agencies are treated for tariff purposes in respect
to its connection charges and monthly charges as
&#147;residential&#148;, which rates are lower than the business
service rates. This special treatment does not apply to the
tariff for local, long distance and IDD calls.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Other</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proportion of securities of
TELKOM held in Indonesia and outside Indonesia</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, 14,018 persons, including the
Government, were registered as holders of 20,159,999,279
Series&nbsp;B shares of TELKOM&#146;s Common Stock in Indonesia.
There were a total of 37,414,543 ADSs held by
149&nbsp;registered holders as of December&nbsp;31, 2005. The
ADSs are traded on the NYSE and the&nbsp;LSE.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in Control</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
There are no arrangements which are known to the Company which
may result in a change in control to the Company.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Related party transactions</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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&nbsp;45 to the Company&#146;s
consolidated financial statements. The most significant of these
transactions include:
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indosat</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At the time TELKOM acquired Pramindo in August 2002, a 13% of
the issued and paid up share capital of Pramindo was owned by
Indosat, a company that, at that time, was majority owned and
controlled by our major shareholder, the Government of
Indonesia. Since December&nbsp;20, 2002, Indosat has been
controlled by Singapore Technologies Telemedia Pte. Ltd. TELKOM
still considers Indosat as a related party because the
Government can exert significant influence over the financial
and operating policies of Indosat by virtue of its right to
appoint one director and one commissioner of&nbsp;Indosat.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Following the merger of Indosat, PT&nbsp;Indosat Multimedia
Mobile (&#147;IM3&#148;), Satelindo and PT&nbsp;Bimagraha
Telekomindo on November&nbsp;20, 2003, with Indosat as the
surviving entity, all the rights and obligations of Satelindo
and IM3 arising from their agreements with TELKOM and Telkomsel,
as the case may be, were transferred to or assumed
by&nbsp;Indosat.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has an agreement with Indosat for the provision of
international telecommunication services to the public. The
principal matters covered by the agreement are as follows:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    The Company provides a local network for 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 Telecommunication
    of the Republic of Indonesia. The international
    telecommunication services include telephone, telex, telegram,
    package switched data network, television, teleprinter,
    Alternate Voice/Data Telecommunication (AVD), hotline and
    teleconferencing. The Company receives compensation for the
    services, based on the interconnection tariff determined by the
    Minister of Communications of the Republic of Indonesia;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    The Company has also entered into an interconnection agreement
    between the Company&#146;s PSTN network and Indosat&#146;s
    cellular network in connection with the implementation of Indosat</TD>
</TR>

</TABLE>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    Multimedia Mobile services and the settlement of the related
    interconnection rights and obligations;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    The Company&#146;s compensation relating to leased lines/
    channel services, such as International Broadcasting System, AVD
    and bill printing is calculated at 15% of Indosat&#146;s
    revenues from such services. Indosat also leased circuits from
    the Company to link Jakarta, Medan and Surabaya through
    <FONT style="white-space: nowrap">year-end&nbsp;</FONT>2003.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 1994, the Company transferred to Satelindo (now Indosat) the
right to use a parcel of Company-owned land located in Jakarta
that had been previously leased to PT&nbsp;Telekomindo
Primabhakti. Based on the transfer agreement, Satelindo is given
the right to use the land for 30&nbsp;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.43.0&nbsp;billion to the Company for the thirty-year right.
Satelindo paid Rp.17.2&nbsp;billion in 1994 and the remaining
Rp.25.8&nbsp;billion was not paid because the Utilization Right
(&#147;Hak Pengelolaan Lahan&#148;) on the land could not be
delivered as provided in the transfer agreement. In&nbsp;2000,
the Company and Satelindo agreed on an alternative solution by
accounting for the above payment as lease expense up to 2006.
In&nbsp;2001, Satelindo paid an additional amount of
Rp.59.9&nbsp;billion as lease expense up to&nbsp;2024.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telkomsel also entered into an agreement with Indosat for the
provision of international telecommunication services to GSM
mobile cellular customers. The principal matters covered by the
agreement are as follows:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Telkomsel&#146;s GSM mobile cellular telecommunication network
    is connected with Indosat&#146;s international gateway exchanges
    to make outgoing or receive incoming international calls through
    Indosat&#146;s international gateway exchanges;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Telkomsel receives as compensation for the interconnection, a
    specific percentage of Indosat&#146;s revenues from the related
    services made through Indosat&#146;s international gateway
    exchanges;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Billings for international calls made by Telkomsel&#146;s
    customers of GSM mobile cellular telecommunication are handled
    by Telkomsel. Telkomsel is obliged to pay Indosat&#146;s share
    of revenue regardless whether billings to customers have been
    collected;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    The agreement dated March&nbsp;29, 1996, was initially valid for
    one year, but extendable as agreed by both parties. The latest
    amended agreement is valid until March&nbsp;2008, but extendable
    as agreed by both parties. Pending negotiations on a new
    agreement, Telkomsel and Indosat have entered into an interim
    agreement with terms similar to those set forth above. Under the
    terms of the interim agreement, Telkomsel will receive 27% of
    the applicable tariff for outgoing international calls from
    Telkomsel subscribers and Rp.800 per minute for incoming
    international calls to Telkomsel subscribers. The interim
    agreement became effective on March&nbsp;1, 2004 and continues
    until such date that Telkomsel and Indosat enter into a new
    agreement.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telkomsel also has an agreement for the usage of Indosat&#146;s
telecommunication facilities. The agreement, which was made in
1997, is valid for eleven years and subject to change based on
an annual review and agreement by both parties. The charges for
the usage of the facilities amounted to Rp.17.9&nbsp;billion,
Rp.19.1&nbsp;billion and Rp.19.1&nbsp;billion
(US$1.9&nbsp;million) in 2003, 2004 and 2005, respectively, or
0.1%, 0.1% and 0.1% of total operating expenses in 2003, 2004
and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Other agreements between Telkomsel and Indosat are as follows:
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>Agreement on Construction and Maintenance for the
    Jakarta-Surabaya Cable System
    <FONT style="white-space: nowrap">(&#147;J-S&nbsp;</FONT>Cable&nbsp;System&#148;)</I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telkomsel, Lintasarta, Satelindo and Indosat entered into the
Construction and Maintenance for
<FONT style="white-space: nowrap">J-S</FONT> Cable System
Agreement. The parties formed a management committee consisting
of a chairman and a representative of each party, to direct the
construction and operation of the cable system. The construction
of the cable system was completed in 1998. Based on the
agreement, Telkomsel shared
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
19.325% of the total construction cost. Operation and
maintenance costs are shared based on an agreed formula.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telkomsel&#146;s share in operation and maintenance costs
amounted to Rp.1.4&nbsp;billion, Rp.2.1&nbsp;billion and
Rp.1.2&nbsp;billion (US$0.1&nbsp;million) in 2003, 2004 and
2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indefeasible Right of Use
Agreement</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On September&nbsp;21, 2000, Telkomsel entered into an agreement
with Indosat for the use of SEA&nbsp;&#151; ME&nbsp;&#151; WE 3
and tail link in Jakarta and Medan. Based on the agreement,
Telkomsel was granted an indefeasible right to use certain
capacity of the network commencing from September&nbsp;21, 2000
to 2015 by prepaying compensation amounting to
US$2.7&nbsp;million. In addition to the prepayment, Telkomsel is
also charged annual operation and maintenance costs amounting to
US$0.1&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interconnection Revenues</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company and its subsidiaries earned net interconnection
revenues from Indosat (including Satelindo and IM3 before their
merger with Indosat) of Rp.235.7&nbsp;billion in 2003,
representing 0.9% of total operating revenues in 2003. The
Company and its subsidiaries were charged net interconnection
charges from Indosat of Rp.158.3&nbsp;billion and
Rp.52.8&nbsp;billion (US$5.4&nbsp;million) in 2004 and 2005,
respectively, representing 0.5% and 0.1%, of total operating
revenues in 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Leased Lines</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company provides leased lines to Indosat and its
subsidiaries, namely Indosat Mega Media and Lintasarta. The
leased lines can be used by those companies for telephone,
telegraph, data, telex, facsimile or other telecommunication
services. Revenue earned from these transactions amounted to
Rp.43.6&nbsp;billion, Rp.109.8&nbsp;billion, and
Rp.126.4&nbsp;billion (US$12.9&nbsp;million) in 2003, 2004 and
2005, respectively, representing 0.2%, 0.3% and 0.3% of total
operating revenues in 2003, 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Satellite Transponder Lease</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lintasarta utilizes the Company&#146;s satellite transponders or
frequency channels. Revenue earned from these transactions
amounted to Rp.23.7&nbsp;billion, Rp.14.5&nbsp;billion and
Rp.8.1&nbsp;billion (US$0.8&nbsp;million) in 2003, 2004 and
2005, respectively, representing 0.1%, less than 0.1% and less
than 0.1% of total operating revenues in 2003, 2004 and 2005,
respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Data communication network</I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telkomsel has an agreement with Lintasarta and PT&nbsp;Artajasa
Pembayaran Elektronis (&#147;Artajasa&#148;) for the usage of
data communication network system. The charges from Lintasarta
and Artajasa for the services amounted to Rp.11.0&nbsp;billion,
Rp.21.4&nbsp;billion and Rp.23.1&nbsp;billion
(US$2.4&nbsp;million) in 2003, 2004 and 2005, respectively,
representing 0.1%, 0.1% and 0.1% of total operating expenses in
2003, 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Agreement with Government
agencies and associated companies</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company provides telecommunication services to Government
agencies.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has entered into agreements with Government agencies
and associated companies, namely, CSM, KSO VII, and Patrakom,
for utilization of the Company&#146;s satellite transponders or
frequency channels. Revenues earned from these transactions
amounted to Rp.73.2&nbsp;billion, Rp.51.0&nbsp;billion and
Rp.66.8&nbsp;billion (US$6.8&nbsp;million) in 2003, 2004 and
2005, respectively, representing 0.3%, 0.2% and 0.2% of total
operating revenues in 2003, 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company provides leased lines to other license operators
such as CSM, Patrakom and PSN. The leased lines can be used by
these companies for telephone, telegraph, data, telex, facsimile
or other
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
telecommunication services. Revenue earned from these
transactions amounted to Rp.44.7&nbsp;billion,
Rp.25.7&nbsp;billion and Rp.30.7&nbsp;billion
(US$3.1&nbsp;million) in 2003, 2004 and 2005, respectively,
which was 0.2%, 0.1% and 0.1% of total operating revenues in
2003, 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company purchases property and equipment including
construction and installation services from a number of related
parties. These related parties include PT&nbsp;Industri
Telekomunikasi Indonesia (&#147;PT&nbsp;INTI&#148;), Lembaga
Elektronika Nasional, PT&nbsp;Adhi Karya, PT&nbsp;Pembangunan
Perumahan, PT&nbsp;Nindya Karya, PT&nbsp;Boma Bisma Indra,
PT&nbsp;Wijaya Karya, PT&nbsp;Waskita Karya and PT&nbsp;Gratika,
which are all state-owned companies, and Koperasi Pegawai
Telkom, a related party cooperative. Purchases made from these
related parties amounted to Rp.127.0&nbsp;billion,
Rp.268.9&nbsp;billion and Rp.337.7&nbsp;billion
(US$34.3&nbsp;million) in 2003, 2004 and 2005, respectively,
representing 1.1%, 2.4% and 2.5% of total fixed assets purchases
in 2003, 2004 and 2005 respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
PT&nbsp;INTI is also a major contractor and supplier providing
equipment, including construction and installation services, for
Telkomsel. Total purchases from PT&nbsp;INTI in 2003, 2004 and
2005 amounted to Rp.52.3&nbsp;billion, Rp.217.7&nbsp;billion and
Rp.67.6&nbsp;billion (US$6.9&nbsp;million), respectively,
representing 0.5%, 1.9% and 0.5% of total fixed assets purchases
in 2003, 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telkomsel has an agreement with PSN for lease of PSN&#146;s
transmission link. Based on the agreement, which was made on
March&nbsp;14, 2001, the minimum lease period is 2&nbsp;years
since the operation of the transmission link and is extendable
subject to agreement by both parties. The lease charges amounted
to Rp.40.5&nbsp;billion, Rp.49.7 billion and
Rp.95.2&nbsp;billion (US$9.7&nbsp;million) in 2003, 2004 and
2005, respectively, representing 0.3%, 0.3% and 0.4% of total
operating expenses in 2003, 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company and its subsidiaries carry insurance (on their
property, plant and equipment against property losses, inventory
and on employees&#146; social security) obtained from
PT&nbsp;Asuransi Jasa Indonesia, PT&nbsp;Asuransi Tenaga Kerja
and PT&nbsp;Persero Asuransi Jiwasraya, which are state-owned
insurance companies. Insurance premiums amounted to
Rp.159.5&nbsp;billion, Rp.148.3&nbsp;billion and
Rp.58.3&nbsp;billion (US$5.9&nbsp;million) in 2003, 2004 and
2005, respectively, representing 1.1%, 0.8% and 0.2% of total
operating expenses in 2003, 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company and its subsidiaries maintain current accounts and
time deposits in several state-owned banks. In addition, some of
those banks are appointed as collecting agents for the Company.
Total placements in form of current accounts and time deposits,
and mutual funds in state-owned banks amounted to
Rp.2,116.0&nbsp;billion and Rp.3,315.4&nbsp;billion
(US$337.3&nbsp;million) as of December&nbsp;31, 2004 and 2005,
respectively, representing 3.8% and 5.3% of total assets as of
December&nbsp;31, 2004 and 2005, respectively. Interest income
recognized during 2003, 2004 and 2005 was Rp.274.0&nbsp;billion,
Rp.150.4&nbsp;billion and Rp.124.0&nbsp;billion
(US$12.6&nbsp;million), representing 74.9%, 47.3% and 36.0% of
total interest income, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s subsidiaries have loans from a state-owned
bank. Interest expense on the loans for 2004 and 2005 amounted
to Rp.9.1&nbsp;billion and Rp.5.1&nbsp;billion
(US$0.5&nbsp;million), representing 0.7% and 0.4% of total
interest expense in 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company (a)&nbsp;leases buildings, (b)&nbsp;purchases
materials and construction services and (c)&nbsp;utilizes
maintenance and cleaning services from Dana Pensiun Telkom and
PT&nbsp;Sandhy Putra Makmur, a subsidiary of Yayasan Sandikara
Putra Telkom (a&nbsp;foundation managed by Dharma Wanita
Telkom). Total charges from these transactions amounted to
Rp.32.8&nbsp;billion, Rp.24.9&nbsp;billion and
Rp.39.1&nbsp;billion (US$4.0&nbsp;million) in 2003, 2004 and
2005, respectively, representing 0.2%, 0.1% and 0.2% of total
operating expenses in 2003, 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company purchased encoded phone cards from Perusahaan Umum
Percetakan Uang Republik Indonesia, a state-owned company. The
cost of the phone cards amounted to Rp.7.7&nbsp;billion, nil and
nil in 2003, 2004 and 2005, respectively, representing 0.05%, 0%
and 0% of total operating expenses for 2003, 2004 and 2005,
respectively.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company and its subsidiaries earned (were charged)
interconnection revenues (charges) from PSN of
Rp.19.0&nbsp;million, Rp.(5.5) million and Rp.1.1&nbsp;million
(US$0.1&nbsp;million) in 2003, 2004 and 2005, respectively,
representing 0.1%, (0.02)% and less than 0.01% of total
operating revenues in 2003, 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition to revenues earned under the KSO Agreements, the
Company also earned income from building rental, repairs and
maintenance services and training services provided to the KSO
Units, amounting to Rp.23.1&nbsp;billion, Rp.18.4&nbsp;billion
and Rp.26.8&nbsp;billion (US$2.7&nbsp;million) in 2003, 2004 and
2005, respectively, representing 0.1%, 0.1% and 0.1% of total
operating revenues in 2003, 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has a revenue-sharing arrangement with Koperasi
Pegawai Telkom (&#147;Kopegtel&#148;). Kopegtel&#146;s share in
the revenues from these arrangements amounted to
Rp.20.6&nbsp;billion and Rp.31.9&nbsp;billion
(US$3.2&nbsp;million) in 2004 and 2005, respectively,
representing 0.1% and 0.1% of total operating revenues in 2004
and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telkomsel has operating lease agreements with Patrakom and CSM
for the usage of their transmission link for a period of three
years, subject to extensions. The lease charges amounted to
Rp.25.0&nbsp;billion and Rp.123.9&nbsp;billion in 2004 and 2005,
respectively, representing 0.1% and 0.5% of total operating
expenses in 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Kisel is a cooperative that was established by Telkomsel&#146;s
employees to provide car rental services, printing and
distribution of customer bills, collection and other services,
principally servicing Telkomsel<B>.</B> For Kisel&#146;s
services, Telkomsel paid Rp.109.5&nbsp;billion and
Rp.78.7&nbsp;billion in 2004 and 2005, respectively. Telkomsel
also has dealership agreements with Kisel for distribution of
SIM cards and pulse reload vouchers. Total SIM cards and pulse
reload vouchers sold to Kisel amounted to Rp.816.6&nbsp;billion
and Rp.1,158.6&nbsp;billion in 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Infomedia provides electronic media and call center services to
KSO Unit&nbsp;VII based on an agreement dated March&nbsp;4,
2003. Revenue earned from these transactions in 2004 and 2005
amounted to Rp.5.5&nbsp;billion and Rp.9.2&nbsp;billion
(US$0.9&nbsp;million), respectively, or 0.02% and 0.02% of total
operating revenues in 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company provides a defined benefit pension plan and a
post-retirement health care plan for its pensioners through Dana
Pensiun Telkom and Yayasan Kesehatan Pegawai Telkom. See
Notes&nbsp;42 and 44 to the consolidated financial statements in
Item&nbsp;18.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has also seconded a number of its employees to
related parties to assist them in operating their business. In
addition, the Company provides certain of its related parties
with the right to use its buildings free of charge.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest of experts and
counsel</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Not applicable.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<A name='112'></A>
</DIV>

<!-- link1 "ITEM 8. FINANCIAL INFORMATION" -->

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<B>ITEM 8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FINANCIAL INFORMATION</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated statements and
other financial information</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
See Item&nbsp;18. &#147;Consolidated Financial Statements,&#148;
which is incorporated herein by reference.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Material Litigation</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commissions for Business
Competition Watch (Komisi Pengawas Persaingan Usaha)
(&#147;KPPU&#148;)</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On August&nbsp;13, 2004, the KPPU issued its verdict in
Commission Court, which determined that the Company had breached
several articles of Law No.&nbsp;5/1999 on Anti Monopolistic
Practices and Unfair Business Competition (&#147;Competition
Law&#148;). In addition, KPPU also indicated that the Company
should allow Warung Telkom (&#147;kiosks&#148;) to channel
international calls to other international call
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">158

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
operators, and abolish the clause in agreements between the
Company and Warung Telkom providers which limit Warung Telkom to
sell telecommunication services of other operators. The Company
filed an appeal to the Bandung District Court which on
December&nbsp;7, 2004 issued its verdicts in favor of the
Company. On January&nbsp;4, 2005, KPPU filed an appeal to the
Indonesian Supreme Court. The Company does not believe that
these proceedings presently pending will have a material adverse
effect on the Company&#146;s consolidated financial position,
results of operations or liquidity.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Significant changes</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On May&nbsp;13, 2004, TELKOM received its commercial license to
provide IDD fixed line services. On June&nbsp;7, 2004, TELKOM
began offering IDD fixed line services to customers under the
brand name &#147;TIC&nbsp;007.&#148;
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
See the important disclosures regarding changes in the
regulations governing the Indonesian telecommunications industry
in Item&nbsp;4. &#147;Information on the Company&nbsp;&#151; B.
Business Overview&nbsp;&#151; Regulations&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
See Note&nbsp;53 to the Company&#146;s consolidated financial
statements in Item&nbsp;18 for information relating to material
subsequent events occurring after December&nbsp;31, 2005.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">159

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='113'></A>
</DIV>

<!-- link1 "ITEM 9. THE OFFER AND LISTING" -->

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>ITEM 9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THE OFFER AND LISTING</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Offer and listing details</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>SHARE PRICE INFORMATION</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="75%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Price per Share*</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2" align="center" nowrap><B>Calendar Year</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>High</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Low</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>(in Rupiah)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>2001</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,825</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    First Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,150</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,775</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Second Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,175</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,525</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,650</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fourth Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,425</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>2002</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    First Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,300</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,825</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Second Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,725</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,700</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,900</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,125</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fourth Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,350</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>2003</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    First Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,725</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,225</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Second Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,950</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,650</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,125</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fourth Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,650</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>2004</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    First Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,025</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,300</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Second Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,350</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,300</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,650</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fourth Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,175</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>2005</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    First Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,125</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,300</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Second Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,350</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,175</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,775</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fourth Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,150</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,925</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    October</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    November</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,925</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    December</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,150</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,450</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>2006</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    January</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,550</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,050</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    February</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,950</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    March</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,200</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    April</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,900</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    May</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,050</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>*&nbsp;</TD>
    <TD align="left">
    On October&nbsp;1, 2004, TELKOM effected a two-for-one split of
    its Common Stock from Rp.500 par value per share to Rp.250 par
    value per share as resolved in the AGMS on July&nbsp;30, 2004.
    The price per share reflects this split for all periods shown.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">160

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;29, 2005 (the last trading day in 2005 on the
JSX), the closing price for a share of Common Stock was Rp.5,900.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The table below sets forth, for the periods indicated, the
reported high and low quoted prices of the ADSs on the NYSE and
LSE.
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>ADS PRICE INFORMATION</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="61%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Price per ADS</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Price per ADS</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>(NYSE)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>(LSE)</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2" align="center" nowrap><B>Calendar Year</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>High</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Low</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>High</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Low</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>(in US Dollars)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>(in US Dollars)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>2001</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    First Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.9</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Second Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fourth Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>2002</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    First Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Second Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fourth Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>2003</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    First Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.53</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.27</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Second Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12.09</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11.78</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.33</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.73</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.85</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.60</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fourth Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16.42</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.40</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>2004</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    First Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18.97</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.29</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Second Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.91</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20.27</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.08</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18.55</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.81</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.73</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fourth Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23.33</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23.21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.37</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>2005</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    First Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.96</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18.11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.86</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18.17</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Second Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.96</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16.85</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.99</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16.88</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23.66</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29.76</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17.97</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fourth Quarter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.81</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25.47</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.71</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    October</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.81</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20.76</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.78</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    November</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22.08</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.82</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20.45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.71</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    December</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22.21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25.47</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22.05</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>2006</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    January</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24.65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27.29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23.78</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    February</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27.86</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26.73</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    March</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31.51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26.38</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31.38</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26.62</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    April</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35.19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30.46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35.11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30.76</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    May</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38.28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28.86</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38.35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30.60</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">161

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;31, 2005, the closing price for an ADS was
US$23.86 on the NYSE and US$23.78 on the LSE.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Plan of distribution</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Not applicable.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Markets</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM&#146;s Common Stock is listed on the Jakarta Stock
Exchange (&#147;JSX&#148;) and the Surabaya Stock Exchange
(&#147;SSX&#148;). The JSX is the principal
<FONT style="white-space: nowrap">non-U.S.&nbsp;</FONT>trading
market for the Company&#146;s Common Stock. In addition,
American Depositary Shares (&#147;ADSs&#148;), each representing
40&nbsp;shares of Common Stock, are listed on the New York Stock
Exchange (&#147;NYSE&#148;) and the London Stock Exchange
(&#147;LSE&#148;). TELKOM&#146;s Common Stock has also been
publicly offered without listing in Japan.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>The Indonesian Securities Market</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of the date of this Annual Report, there are two stock
exchanges in Indonesia. The primary market is the JSX located in
Jakarta 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.801.25
trillion at year end 2005 as compared to Rp.695.56 trillion for
the SSX. Total trading value on the JSX during 2005 was
Rp.406.01 trillion, compared with Rp.5.29 trillion on the SSX.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Overview of the JSX</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, the JSX comprised of 122 members.
Trading rules on the JSX are, at present, generated in the form
of decisions by the JSX. There are currently two daily trading
sessions for regular market and negotiated market from Monday to
Thursday, a morning session from 9.30&nbsp;a.m. to 12.00 noon,
followed by an afternoon session from 1.30&nbsp;p.m. to
4.00&nbsp;p.m. There are two trading sessions on Friday, from
9.30&nbsp;a.m. to 11.30&nbsp;a.m. and from 2.00&nbsp;p.m. to
4.00&nbsp;p.m. There is only one cash market trading session
from Monday to Thursday, 9.30&nbsp;a.m. to 12.00 noon, and on
Friday, 9.30&nbsp;a.m. to 11.30&nbsp;a.m.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Trading of securities is divided into three market segments:
regular market, negotiated market and cash market (except for
right issues which may only be traded in the cash and negotiated
markets). The regular market is the mechanism for trading stock
in standard lots on a continuous auction market during exchange
hours. Regular market and cash market trading is generally
carried out in unit lots of 500 shares. The price movements:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="2%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    for shares with previous price under Rp.500, in multiples of
    Rp.5 and each price movement should be no more than Rp.50;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    for shares with previous price between the range of Rp.500 up to
    Rp.2,000, in multiples of Rp.10 and each price movement should
    be no more than Rp.100;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    for shares with previous price between the range of Rp.2,000 up
    to Rp.5,000, in multiples of Rp.25 and each price movement
    should be no more than Rp.250; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    for shares with previous price between the range of Rp.5,000 or
    more, in multiples of Rp.50 and each price movement should be no
    more than Rp.500.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Auctioning takes place according to price priority and time
priority. Price priority refers to the giving of priority to
buying orders at a higher price or selling orders at a lower
price. If buying or selling orders are placed at the same price,
priority is given to the buying or selling order placed first
(i.e. time priority).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The negotiated market trading is carried out by (i)&nbsp;direct
negotiation between members of JSX or (ii)&nbsp;between clients
through one member of JSX or (iii)&nbsp;between client and
member of JSX or
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">162

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
(iv)&nbsp;between member of JSX with Kustodi Penjaminan Efek
Indonesia (Indonesian Clearing Guarantee Corporation)
(&#147;KPEI&#148;). The negotiated market trading does not use
round lots.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Transactions on the JSX regular market are required to be
settled no later than the third trading day after the
transactions except for cross trading. Transactions on the
negotiated market are settled based on agreement between the
selling exchange member and the buying exchange member, and are
settled per transaction. Transactions on the JSX cash market are
required to be settled on the trading day of the transactions.
In case of a default by an exchange member on settlement, cash
market trading takes place, pursuant to which trading of
securities by means of direct negotiation on cash and carry
terms will be conducted. All cash market transactions must be
reported to the JSX. An exchange member is obliged to pay a
transaction cost as regulated by the JSX, delay in payment of
the transaction cost will be subject to a fine of 1.0% of the
outstanding amount for each day of delay. For any violation on
JSX rules, JSX may impose to exchange member sanctions:
(i)&nbsp;fine up to Rp.500&nbsp;million; (ii)&nbsp;a written
warning; (iii)&nbsp;suspension; or (iv)&nbsp;revocation of
license as an exchange member.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All transactions involving shares listed only on the JSX which
use the services of brokers must be conducted through the JSX.
In order for a trade (except a block trade) to be made on the
JSX, both the cash and securities settlement must be conducted
through the facilities of the JSX. Engaging in short selling is
prohibited under the applicable regulations. Furthermore, the
JSX may cancel a transaction if proof exists of fraud, market
manipulation or the use of insider information. The JSX may also
suspend trading if there are indications of fraudulent
transactions or artificial inflation of share prices, misleading
information, use of insider information, counterfeit securities
or securities blocked from trading, or any other material event.
The JSX may suspend trading of certain securities or suspend
certain members of the stock exchange. For transactions
involving shares listed on both the JSX and the SSX, either
exchange may be used to effect the trade.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Members of the JSX charge a brokerage fee for their services,
based on agreement with their client, up to a maximum of 1.0% of
the transaction value. When conducting share transactions on the
JSX, exchange members are required to pay a transaction cost in
the amount of 0.03% of the transaction value (for transactions
in the regular and cash markets) and a transaction cost in the
amount of 0.03% of the transaction value or based on the
exchange policy (for transactions in the negotiated markets).
The transaction cost is minimum Rp.2&nbsp;million per month as
contribution for the provision of stock exchange&#146;s
facilities (which continues to apply for stock exchange members
in suspension). The clients are also responsible for paying a
10.0% value added tax on the amount of brokerage fee and
transaction cost. Also, Indonesian sellers are required to pay a
withholding tax of 0.1% (0.6% for founder shares) of the total
transaction value. Additionally, stamp duty of Rp.3,000 is
payable on any transaction with a value between Rp.250,000 and
Rp.1,000,000 and stamp duty of Rp.6,000 is payable on every
transaction with a value of more than Rp.1,000,000.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Shareholders or their appointees may request at any time during
working hours, the issuer or a securities administration bureau
appointed by the issuer of such shares to register their shares
in the issuer&#146;s registry of shareholders. Reporting of
share ownership to BAPEPAM is mandatory for shareholders whose
ownership has reached 5.0% or more of issued and fully paid up
capital, upon meeting such share ownership level or upon changes
of such ownership.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Trading on the NYSE and LSE</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Bank of New York serves as depositary (the
&#147;Depositary&#148;) with respect to the ADSs traded on the
NYSE and the LSE. Each ADS represents 40&nbsp;shares of Common
Stock. As of December&nbsp;31, 2005, 37,414,543 ADSs were
outstanding in either the New York Stock Exchange or London
Stock Exchange and there were 149 registered holders of ADSs.
</DIV>

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<B>D.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling Stockholders</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Not applicable.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>E.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dilution</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Not applicable.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>F.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expenses of the issue</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Not applicable.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='114'></A>
</DIV>

<!-- link1 "ITEM 10. ADDITIONAL INFORMATION" -->

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>ITEM 10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ADDITIONAL
INFORMATION</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share capital</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Not applicable.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Memorandum and articles of
association</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s articles of association
(&#147;Articles&#148;) have been registered with the Ministry of
Justice in accordance with the Limited Liability Company Law
No.&nbsp;1&nbsp;Year 1995 (&#147;Indonesian Company Law&#148;)
and was announced by Ministerial Decree number
<FONT style="white-space: nowrap">C2-7468.HT.01.04.TH.97&nbsp;</FONT>year
1997. According to article&nbsp;3, the objectives and purposes
of the Company are to operate telecommunications networks and
provide telecommunications and information services.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In accordance with Indonesian company law, TELKOM 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. See
Item&nbsp;6. &#147;Directors, Senior Management and
Employees&nbsp;&#151; A. Directors and Senior Management.&#148;
The Articles state that any transaction involving a conflict of
interest between the Company and its directors, commissioners
and stockholders should be approved by a stockholders meeting,
in which approval is required from a majority of independent
stockholders.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Each director also receives an annual bonus and other incentives
if TELKOM surpasses certain financial and operating targets, the
amounts of which are determined by the stockholders at the
general meeting of stockholders. 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 stockholders.
Each commissioner is granted a monthly honorarium and certain
other allowances and is paid an annual bonus if TELKOM surpasses
certain financial operating targets, the amounts of which are
determined by the stockholders at the general meeting of
stockholders. Each commissioner also receives a lump sum bonus
paid at the end of the commissioner&#146;s term pursuant to a
letter of the Ministry of Finance which applies to all
state-owned companies. No fees are paid to the Commissioners or
Directors for attendance at their respective board meetings.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Board of Directors are tasked with the responsibility of
leading and managing the Company in accordance with its
objectives and purposes and to control, preserve and manage the
assets of the Company. Within such broad scope of
responsibility, the Board of Directors are authorized to cause
the Company to borrow such sums as it may require from time to
time subject to the limitations set forth in the Articles. The
borrowing powers of the Board of Directors may only be varied
through an amendment to the Articles.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Articles do not contain any requirement for (i)&nbsp;the
directors to retire by a specified age, or (ii)&nbsp;the
directors to own any or a specified number of shares of the
Company. The rights, preferences and restrictions attaching to
each class of the shares of the Company in respect of specified
matters are set forth below:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="2%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    <I>dividend rights</I>. Dividends are to be paid based upon the
    financial condition of TELKOM and in accordance with the
    resolution of the stockholders in a general meeting, which will
    also determine the form of and time for payment of the dividend;</TD>
</TR>

</TABLE>

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<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="2%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    <I>voting rights</I>. The holder of each voting share is
    entitled to one vote at a general meeting of stockholders;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    <I>rights to share in the Company&#146;s profits</I>. See
    dividend rights;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    <I>rights to share in any surplus in the event of
    liquidation</I>. Stockholders are entitled to surplus in the
    event of liquidation in accordance with their proportion of
    shareholding, provided the nominal value of the Common Stock
    that they hold is fully paid-up;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    <I>redemption provisions</I>. There are no stock redemption
    provisions in the Articles. However, based on Article&nbsp;30 of
    Indonesian Company Law, TELKOM may buy back at the maximum 10%
    of its issued shares;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    <I>reserved fund provisions</I>. Retained earnings up to a
    minimum of 20% of the issued capital of the Company is to be set
    aside to cover potential losses suffered by the Company. If the
    amount in the reserved fund exceeds 20% of the issued capital of
    the Company, general meeting of stockholders may authorize the
    Company to utilize such excess funds as dividends;</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    <I>liability to further capital calls</I>. Stockholders of the
    Company may be asked to subscribe for new shares in the Company
    from time to time. Such right is to be offered to stockholders
    prior to being offered to third parties and may be transferred
    at the option of the shareholder. The Board of Directors of the
    Company is authorized to offer the new shares to third parties
    in the event that the existing shareholder is unable or
    unwilling to subscribe for such new shares; and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    <I>provisions discriminating against any existing or prospective
    holder of such securities as a result of such shareholder owning
    a substantial number of shares</I>. The Articles do not contain
    any such provision.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In order to change the rights of holders of stock, an amendment
to the relevant provisions of the Articles would be required.
Any amendment to the Articles requires the approval of the
holder of the Series&nbsp;A Dwiwarna share and two thirds of the
holders of the Series&nbsp;B shares present at a general
meeting. Such meeting must also be attended by the holder of the
Series&nbsp;A Dwiwarna share.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
General meetings of stockholders may only be convened upon the
issuance of the requisite notice by the Company. The notice is
to be published in at least 2 newspapers having general
circulation within Indonesia, one of which must be in Indonesian
and the other in English. The notice period for convening annual
general meetings and extraordinary general meetings is
21&nbsp;days (not including the date the meeting was called and
the date of the meeting) and 14&nbsp;days (not including the
date the meeting was called and the date of the meeting)
respectively. The quorum for the general meeting is stockholders
representing more than 50% of the outstanding share capital of
the Company. In the event that quorum is not achieved, another
meeting is to be held, which meeting does not require the issue
of a notice. At the second meeting, the quorum for the meeting
is stockholders representing one third of the outstanding share
capital of the Company. In the event that quorum is not achieved
at the second meeting, a third meeting may be held, the quorum
for which shall be determined by the Head of the District Court
that has a judicial jurisdiction over TELKOM. Stockholders may
vote by proxy. All resolutions are to be passed by consensus. If
consensus cannot be reached, resolutions are passed by simple
majority, unless a larger majority is required by the Articles.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Articles do not contain any limitations on the right of any
person, to own shares of the Company. Indonesian capital market
regulations do not contain any limitation on the right of any
person, whether local or foreign, to own shares in a company
listed on an Indonesian stock exchange.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Any takeover of the Company is required to be approved by the
holder of the Series&nbsp;A Dwiwarna share and a majority
constituting 75% of the holders of the Series&nbsp;B shares at a
general meeting of stockholders that must be attended by the
holder of the Series&nbsp;A Dwiwarna share. There are no other
provisions in the Articles that would have the effect of
delaying, deferring or preventing a change in control of the
Company.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Each director and commissioner has an obligation to report to
BAPEPAM with regard to their ownership and the changes of their
ownership in the Company and this obligation also applies to
stockholders who have an ownership of 5% or more in the paid up
capital of the Company. TELKOM believes that the Articles are
not significantly different from those generally prevailing in
Indonesia in respect of public companies listed on an Indonesian
stock exchange. TELKOM also believes that the provisions in the
Articles relating to changes in the capital of TELKOM are not
more stringent than that required by Indonesian law.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Summary of significant differences between Indonesian
corporate governance practices and the NYSE&#146;s corporate
governance standards</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following sets forth a brief, general summary of significant
differences between the corporate governance practices followed
by Indonesian companies, such as TELKOM, and those required by
the listing standards of the New York Stock Exchange (the
&#147;NYSE&#148;) of U.S.&nbsp;companies that have common stock
listed on the NYSE. The NYSE listing standards are available on
the NYSE&#146;s website at http://www.nyse.com.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Overview of Indonesian
law</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Indonesian public companies are required to observe and comply
with certain good corporate governance practices. The
requirements and the standards for good corporate governance
practices for public companies are mainly embodied in the
following regulations: Law No.&nbsp;1 of 1995 on Limited
Liability Companies (&#147;Company Law&#148;); the Law
No.&nbsp;8 of 1995 on Capital Market (&#147;Capital Market
Law&#148;); the Regulations of the Indonesian Capital Market
Supervisory Board (&#147;BAPEPAM Regulations&#148;); and the
rules issued by the Indonesian stock exchanges, namely Jakarta
Stock Exchange (&#147;JSX&#148;) and Surabaya Stock Exchange
(&#147;SSX&#148;). In addition to the above statutory
requirements, the articles of association (&#147;Articles&#148;)
of public companies commonly incorporate provisions directing
the corporate governance practices in such companies.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Similar to the laws of the United States, Indonesian laws
require public companies to observe and comply with standards of
corporate governance practices that are more stringent than
those applied to privately-owned companies. It should be noted
that in Indonesia, the term &#147;public company&#148; does not
necessarily refer to a company whose shares are listed on a
securities exchange. Under the Capital Market Law, a non-listed
company may be deemed a public company, and subjected to the
laws and regulations governing public companies, if such company
meets or exceeds the capital and shareholder requirements
applicable to a publicly-listed company.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2000, the Government established the National Committee on
Corporate Governance (&#147;NCGI&#148;), an informal committee
that was tasked with formulating good corporate governance
standards for Indonesian companies. As a result, the NCGI
formulated the Code for Good Corporate Governance
(&#147;Code&#148;) which recommended setting more stringent
corporate governance standards for Indonesian companies, such as
the appointment of independent audit and compensation committees
by the Boards of Commissioners, as well as increasing the scope
of Indonesian companies&#146; disclosure obligations. Although
the NCGI recommended that the Code be adopted by the Government
as a basis for legal reform, as of the date of this Annual
Report the Government has not enacted regulations that fully
implement the provisions of the Code. For example, while public
companies such as TELKOM are now required to have independent
audit committees, they are not yet required to have independent
compensation committees. Accordingly, many of the Code&#146;s
provisions have not been implemented by Indonesian companies.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Composition of Board of
Directors; Independence</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The NYSE listing standards provide that the board of directors
of a U.S.&nbsp;listed company must consist of a majority of
independent directors and that certain committees must consist
solely of
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
independent directors. A director qualifies as independent only
if the board affirmatively determines that the director has no
material relationship with the company, either directly or
indirectly.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Unlike companies incorporated in the United States, the
management of an Indonesian company consists of two organs of
equal stature, the Board of Commissioners (&#147;BoC&#148;) and
the Board of Directors (&#147;BoD&#148;). Generally, the BoD is
responsible for the day-to-day business activities of the
company and is authorized to act for and on behalf of the
company, while the BoC has the authority and responsibility to
supervise the BoD and is statutorily mandated to provide advice
to the BoD.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
With regard to the BoC, the Company Law requires a public
company&#146;s BoC to have at least two members. Although the
Company Law is silent as to the composition of the BoC, Listing
Regulation&nbsp;No.&nbsp;1A issued by the JSX states that at
least 30% of the members of the BoC of a public company (such as
TELKOM) must be independent.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As to the BoD, the Company Law states that the BoD has the
authority to manage the daily operation of the company and must
have at least two members, each of whom must meet the minimum
qualification requirements set forth in the Company Law. Given
the difference between the role of the members of the BoD in an
Indonesian company and that of their counterparts in a
U.S.&nbsp;company, Indonesian law does not require that certain
members of the BoD must be independent and neither does it
require the creation of certain committees composed entirely of
independent directors.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Committees</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The NYSE listing standards require that a U.S.&nbsp;listed
company must have an audit committee, a nominating/corporate
governance committee and a compensation committee. Each of these
committees must consist solely of independent directors and must
have a written charter that addresses certain matters specified
in the listing standards.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company Law does not require Indonesian public companies to
form any of the committees described in the NYSE listing
standards. However, Listing Regulation&nbsp;No.&nbsp;1A issued
by the JSX does require the BoC of a listed public company (such
as TELKOM) to form committees that will oversee the
company&#146;s audit process (which committee must be headed by
an independent member of the BoC).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM has an audit committee composed of seven members: two
independent commissioners, four members who are not affiliated
with TELKOM and a
<FONT style="white-space: nowrap">non-independent</FONT>
commissioner with no right to vote as he is affiliated with the
Government. New listing rules adopted pursuant to
Rule&nbsp;<FONT style="white-space: nowrap">10A-3</FONT> under
the Exchange Act requires a foreign private issuer with
securities listed on the NYSE to have an audit committee
comprised of independent directors. The rules became effective
on July&nbsp;31, 2005. Under
Rule&nbsp;<FONT style="white-space: nowrap">10A-3(c)(3),</FONT>
however, foreign private issuers are exempt from the
independence requirements if (i)&nbsp;the home country
government or stock exchange requires the company to have an
audit committee; (ii)&nbsp;the audit committee is separate from
the board of directors and has members from both inside and
outside the board of directors; (iii)&nbsp;the audit committee
members are not elected by the management and no executive
officer of the company is a member of the audit committee;
(iv)&nbsp;the home country government or stock exchange has
requirements for an audit committee independent from the
management of the company; and (v)&nbsp;the audit committee is
responsible for the appointment, retention and oversight of the
work of external auditors. TELKOM avails itself of this
exemption as set forth in its Amended Section&nbsp;303A Annual
Written Affirmation, filed with the NYSE on January&nbsp;12,
2006. The NYSE listing standards and the charter of
TELKOM&#146;s audit committee share the goal of establishing a
system for overseeing the company&#146;s accounting that is
independent from management and of ensuring the auditor&#146;s
independence. However, unlike the requirements set forth in the
NYSE listing standards, TELKOM&#146;s audit committee does not
have direct responsibility for the appointment, compensation and
retention of TELKOM&#146;s external auditor. TELKOM&#146;s audit
committee can only recommend the appointment of the external
auditor to the BoC, and the BoC&#146;s decision is subject to
shareholder approval. For more information, see Item&nbsp;6.
&#147;Directors, Senior Management and Employees&nbsp;&#151; A.
Directors and Senior Managers&nbsp;&#151; Board of
Commissioners&#146; Committees.&#148;
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM&#146;s BoC also
<FONT style="white-space: nowrap">re-established</FONT>
TELKOM&#146;s nomination and remuneration committee on
May&nbsp;20, 2003. The committee was tasked with formulating:
(a)&nbsp;selection criteria and nomination procedures for
Commissioners and Directors; and (b)&nbsp;a compensation system
for Commissioners and Directors for the 2003 fiscal year. In
accordance with its mandate from the BoC, the committee
delivered its report regarding its activities during the 2004
Annual General Meeting of TELKOM&#146;s stockholders.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For more information on TELKOM&#146;s BoC committees, see
Item&nbsp;6. &#147;Directors, Senior Management and
Employees&nbsp;&#151; A. Directors and Senior
Managers&nbsp;&#151; Board of Commissioners&#146;
Committees.&#148;
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Disclosure regarding
corporate governance</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The NYSE listing standards require U.S.&nbsp;companies to adopt,
and post on their websites, a set of corporate governance
guidelines. The guidelines must address, among other things:
director qualification standards, director responsibilities,
director access to management and independent advisers, director
compensation, director orientation and continuing education,
management succession, and an annual performance evaluation
itself. In addition, the CEO of a U.S.&nbsp;company must certify
to the NYSE annually that he or she is not aware of any
violations by the company of the NYSE&#146;s corporate
governance listing standards. The certification must be
disclosed in the company&#146;s annual report to shareholders.
There are no disclosure requirements in Indonesian law similar
to the NYSE listing standards described above. However, the
Capital Market Law generally requires Indonesian public
companies to disclose certain types of information to
shareholders and to BAPEPAM, particularly information relating
to changes in the public company&#146;s shareholdings and
material facts that may affect the decision of shareholders to
maintain their share ownership in such public company.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Code of Business Conduct and
Ethics</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The NYSE listing standards require each U.S.&nbsp;listed company
to adopt, and post on its website, a code of business conduct
and ethics for its directors, officers and employees. There is
no similar requirement under Indonesian law. However, companies
that are required to submit periodic reports to the SEC,
including TELKOM, must disclose in their Annual Reports whether
they have adopted a code of ethics for their senior financial
officers. Although the requirements as to the contents of the
code of ethics under SEC rules are not identical to those set
forth in the NYSE listing standards, there are significant
similarities. Under SEC rules, the code of ethics must be
designed to promote: (a)&nbsp;honest and ethical conduct,
including the handling of conflicts of interest between personal
and professional relationships; (b)&nbsp;full, fair, accurate
and timely disclosure in reports and documents filed with or
submitted to the SEC; (c)&nbsp;compliance with applicable laws
and regulations; (d)&nbsp;prompt internal reporting of
violations of the code; and (e)&nbsp;accountability for
adherence to the code. Furthermore, shareholders must be given
access to physical or electronic copies of the code. See
Item&nbsp;16B. &#147;Code of Ethics.&#148;
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Material contracts</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Acquisition of Pramindo</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to a Conditional Sale and Purchase Agreement dated
April&nbsp;19, 2002, TELKOM agreed to acquire 100% of its KSO
partner in Regional Division I, Pramindo and obtained management
control over Pramindo. Upon the closing of the agreement on
August&nbsp;15, 2002, TELKOM acquired a 30% interest in
Pramindo. In September 2003, TELKOM acquired a further 15% of
the shares of Pramindo. The total purchase price for 100% of
Pramindo was US$384.4&nbsp;million. Of this amount,
US$95.4&nbsp;million was paid in August and September of 2002,
with TELKOM acquiring full control over Pramindo. The balance of
the purchase price was payable in ten unequal quarterly
installments from September 2002 through December 2004. Under
the agreement, TELKOM also agreed to repay loans to the
International Finance Corporation amounting to
US$86.2&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On January&nbsp;28, 2004, TELKOM signed a
<FONT style="white-space: nowrap">short-term</FONT> loan
agreement with ABN AMRO Bank N.V. Jakarta in the amount of
approximately US$130&nbsp;million and on March&nbsp;15, 2004,
TELKOM used the loan
</DIV>

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proceeds to repurchase the remaining outstanding promissory
notes that TELKOM had issued as consideration for the purchase
of Pramindo&#146;s shares. This allowed TELKOM to accelerate the
purchase of the remaining 55% of Pramindo that it did not yet
own and, as of the date of this Annual Report, TELKOM owns 100%
of Pramindo.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Acquisition of AriaWest</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On July&nbsp;31, 2003, TELKOM acquired 100% of the shares of its
KSO partner for Regional Division III, AriaWest, for an
aggregate consideration of US$38.67&nbsp;million in cash
(US$20&nbsp;million of which was paid when the purchase
agreement was signed on May&nbsp;8, 2002 and the remaining
US$18.67&nbsp;million was paid on July&nbsp;31, 2003) and
US$109.1&nbsp;million in promissory notes. The promissory notes,
which are
<FONT style="white-space: nowrap">interest-free,</FONT> are
payable in 10
<FONT style="white-space: nowrap">semi-annual</FONT>
installments. At the same time, in consideration of the release
of AriaWest&#146;s outstanding obligations to its lenders,
TELKOM also repaid approximately US$99&nbsp;million of
AriaWest&#146;s debt (on behalf of AriaWest) and entered into a
new loan agreement for approximately US$197&nbsp;million with
AriaWest&#146;s lenders, which was fully prepaid in December
2004. TELKOM and AriaWest also entered into a settlement
agreement pursuant to which TELKOM and AriaWest irrevocably
settled, discharged and released claims and counterclaims in
their ICC arbitration proceeding and TELKOM agreed to pay a
settlement amount of US$20&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Interconnection Agreement with Indosat</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On September&nbsp;23, 2005, TELKOM signed an Interconnection
Agreement with PT&nbsp;Indosat, Tbk. This agreement provides for
the interconnection (i)&nbsp;of TELKOM&#146;s local fixed line
network with Indosat&#146;s
<FONT style="white-space: nowrap">long-distance</FONT> fixed
line network; (ii)&nbsp;of Indosat&#146;s local fixed line
network with TELKOM&#146;s
<FONT style="white-space: nowrap">long-distance</FONT> fixed
line network; (iii)&nbsp;between TELKOM&#146;s and
Indosat&#146;s
<FONT style="white-space: nowrap">long-distance</FONT> fixed
line networks; (iv)&nbsp;of TELKOM&#146;s domestic fixed line
network with Indosat&#146;s international fixed line network;
and (v)&nbsp;Indosat&#146;s local fixed line network with
TELKOM&#146;s international fixed line network, with the
interconnection tariff being calculated on a
<FONT style="white-space: nowrap">call-by-call</FONT> basis.
This agreement replaces previous interconnection agreements with
Indosat, namely (i)&nbsp;Interconnection Agreement and the
Settlement of Interconnection Financial Rights and Obligations
No.&nbsp;PKS
<FONT style="white-space: nowrap">162/HK81OPSAR-00/2002&nbsp;</FONT>&#151;
26/DNI/HK720/02 dated September&nbsp;3, 2002 as has been amended
with Addendum No.&nbsp;PKS
<FONT style="white-space: nowrap">56/HK.810/JAR-30/2005&nbsp;</FONT>&#151;
<FONT style="white-space: nowrap">065/100-ICO/REL/2005</FONT>
dated March&nbsp;31, 2005, to the limit of the provisions
regulating on interlocal interconnection; (ii)&nbsp;Agreement on
the Performance of Telecommunications Services
No.&nbsp;<FONT style="white-space: nowrap">63/HK.800/UTA-00/97&nbsp;</FONT>&#151;
092/DRU.HK.720/97 dated August&nbsp;21, 1997; and
(iii)&nbsp;Interconnection Agreement
No.&nbsp;<FONT style="white-space: nowrap">64/HK.81OPSAR-00/97&nbsp;</FONT>&#151;
1000/NDN/HK.720/97 dated August&nbsp;21, 1997.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;1, 2005, TELKOM and Indosat entered into
another interconnection agreement enabling each party&#146;s
customers to make domestic calls between Indosat&#146;s mobile
network and TELKOM&#146;s fixed line network and allowing
Indosat&#146;s mobile customers to access TELKOM&#146;s IDD
service by dialing &#147;007&#148;. This agreement overrides
those existing interconnection agreements relating to
TELKOM&#146;s fixed line network and Indosat&#146;s mobile
network. This agreement is valid for three years from its
execution date, and thereafter, may be amended upon agreement by
both parties.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Contract with Orbital Sciences Corporation</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On October&nbsp;24, 2002, TELKOM signed a contract with Orbital
Sciences Corporation, a U.S.&nbsp;company which develops and
manufactures affordable space systems for commercial, civil
government and military customers, to develop the
<FONT style="white-space: nowrap">TELKOM-2</FONT> satellite, a
geosynchronous communication satellite based on Orbital&#146;s
<FONT style="white-space: nowrap">STAR-2</FONT> platform. The
contract has been amended on several occasions. Under the First
Amendment dated December&nbsp;15, 2003, the total fixed cost
payable by TELKOM was US$73&nbsp;million, which was fully paid
by TELKOM in July 2005. Pursuant to the Fifth Amendment dated
August&nbsp;30, 2005, TELKOM agreed to pay US$148,215 to Orbital
Sciences Corporation to extend the service years of the
satellite. The Fifth Amendment also amended the scheduled
payment of &#147;Milestone 15&#148; from US$2,000,000 to
US$1,851,785. TELKOM replaced its Palapa
<FONT style="white-space: nowrap">B-4</FONT>
</DIV>

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satellite with the
<FONT style="white-space: nowrap">TELKOM-2</FONT> satellite in
November 2005. The
<FONT style="white-space: nowrap">TELKOM-2</FONT> satellite has
a capacity of 24&nbsp;standard
<FONT style="white-space: nowrap">C-band</FONT> transponders
with transponder specifications similar to those of the
<FONT style="white-space: nowrap">TELKOM-1</FONT> satellite. The
<FONT style="white-space: nowrap">TELKOM-2</FONT> satellite has
been designed for 15&nbsp;years of
<FONT style="white-space: nowrap">in-orbit</FONT> life. TELKOM
expects that the satellite will support its national as well as
regional communications network for voice, video and data
communications. The satellite was launched into
<FONT style="white-space: nowrap">geo-synchronous</FONT> orbit
22,300 miles above the earth and operates in geostationary orbit
position located at 118 degrees east longitude.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Contract with Arianespace</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On November&nbsp;8, 2002, TELKOM signed a US$62.9&nbsp;million
fixed price contract with Arianespace S.A. for the launch of the
<FONT style="white-space: nowrap">TELKOM-2</FONT> satellite
using an <FONT style="white-space: nowrap">Ariane-5</FONT>
launch vehicle with double launch. Payment was made in 4
installments between January 2004 until September 2004. On
October&nbsp;15, 2004, the parties amended the contract to allow
TELKOM to exercise a reflight option, which allows TELKOM a
reflight in the event of a launch failure or a certain amount of
compensation in the event of a partial launch failure.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Master of Procurement Partnership Agreement (MPPA) with
Samsung Consortium</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On October&nbsp;9, 2002, TELKOM signed an Initial Purchase Order
Contract for CDMA 2000 IX with a consortium lead by Samsung
Corporation (&#147;Samsung Consortium&#148;) for BSS procurement
in Regional Divisions V, VI and VII and on December&nbsp;23,
2002, TELKOM signed a Master Procurement Partnership Agreement
(&#147;MPPA&#148;) for the construction of Network and Switching
Subsystem (&#147;NSS&#148;) nationwide and BSS for Regional
Divisions IV, V, VI and VII. As of December&nbsp;31, 2005,
TELKOM&#146;s remaining purchase commitment in connection with
this MPPA amounted to US$5.6&nbsp;million and
Rp.1,826&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Samsung Consortium shall service and maintain the CDMA 2000 IX
system that it constructs pursuant to a Service
Level&nbsp;Agreement dated the same date as the MPPA in return
for annual consideration of US$11.6&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Master of Procurement Partnership Agreement (MPPA) with
Ericsson CDMA Consortium</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM and a consortium led by Ericsson (&#147;Ericsson CDMA
Consortium&#148;) have entered into a Master of Procurement
Partnership Agreement (&#147;MPPA&#148;) on December&nbsp;23,
2002 for the construction of BSS for Regional Division II. As of
December&nbsp;31, 2005, TELKOM&#146;s remaining purchase
commitment in connection with this MPPA amounted to
US$6.8&nbsp;million and Rp.12,753&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Ericsson CDMA Consortium shall service and maintain the CDMA
2000 IX system that it constructs pursuant to a Service
Level&nbsp;Agreement dated the same date as the MPPA in return
for the annual consideration of US$5.3&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Master of Procurement Partnership Agreement (MPPA) with
PT&nbsp;INTI</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM and PT&nbsp;INTI signed a Master of Procurement
Partnership Agreement on August&nbsp;26, 2003, whereby
PT&nbsp;INTI is appointed to construct a CDMA fixed wireless
access network and integrate such network with TELKOM&#146;s
existing network and all ancillary services relating thereto in
West Java and Banten. As of December&nbsp;31, 2005,
TELKOM&#146;s remaining purchase commitment in connection with
this MPPA amounted to US$355,275 and Rp.233&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
PT&nbsp;INTI will service and maintain the CDMA 2000 IX system
that it constructs pursuant to a Service Level&nbsp;Agreement
dated the same date as the MPPA in return for the annual
consideration of US$2.3&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Partnership Agreement with Siemens Consortium</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM entered into a Partnership Agreement with a consortium
led by Siemens AG on September&nbsp;24, 2003, for the
development, procurement and construction of a backbone
transmission network in Kalimantan and Sulawesi, a related
network management system and the provision of
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
maintenance services in connection with this network. Other
members of the consortium include PT&nbsp;Siemens Indonesia,
PT&nbsp;LEN Industri and Corning Cable System Gmbh &#38; Co.
K.G. The consideration payable by TELKOM for the fiber optic
networks was US$3.8&nbsp;million plus Rp.74.0&nbsp;billion (for
the network located within Kalimantan) and US$3.8&nbsp;million
plus Rp.70.7&nbsp;billion (for the network located within
Sulawesi). On March&nbsp;14, 2005, the parties amended the
Partnership Agreement with respect to the scope of agreement,
work schedule and location, and agreed to increase the contract
price to Rp.157.4&nbsp;billion plus US$7.7&nbsp;million. The
development project was completed in May 2005.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B>PSTN Regional Junction in Jakarta Area</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On February&nbsp;8, 2002, TELKOM signed an agreement with
<FONT style="white-space: nowrap">Olex-Lucent-Brimbun</FONT> for
the award of the PSTN Regional Junction Regional Division II
Work, which encompasses SDH Transmission System, Optical Fibre,
NMS and other services. The agreement has been amended several
times, the latest being on December&nbsp;4, 2003. As of the
latest amendment to the agreement, the total cost of services
and equipment is set at US$28.8&nbsp;million and
Rp.123.2&nbsp;billion, respectively. The contract expired in
2004.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B>Master of Procurement Partnership Agreement (MPPA) with
    Motorola</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On March&nbsp;24, 2003, TELKOM signed a Master of Procurement
Partnership Agreement (&#147;MPPA&#148;) with Motorola, Inc.
Under the MPPA, Motorola is obliged to construct a CDMA fixed
wireless access network and integrate such network with
TELKOM&#146;s existing network and all ancillary services
relating thereto in Regional Division I. As of December&nbsp;31,
2005, TELKOM&#146;s remaining purchase commitment in connection
with this MPPA amounted to US$422,424 and Rp1,307&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Motorola, Inc. will service and maintain the CDMA 2000 IX system
that it constructs, pursuant to a Service Level&nbsp;Agreement
dated the same date as the MPPA in return for an annual
consideration of US$3&nbsp;million.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B>Metro Junction and Optical Network Access Agreement for
    Regional Division III with PT&nbsp;INTI</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On November&nbsp;12, 2003, TELKOM entered into an agreement with
PT&nbsp;INTI for the construction and procurement of an optical
network, as well as a network management system and other
related services and equipment, with respect to Regional
Division III (West Java). Under this agreement, TELKOM is
obligated to pay PT&nbsp;INTI a total consideration of
US$6.6&nbsp;million and Rp.111.7&nbsp;billion.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B>Agreement for the Procurement of Softswitch System
    Class&nbsp;4 with a consortium led by
    <FONT style="white-space: nowrap">Santera-Olex</FONT></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;18, 2003, TELKOM entered into an agreement with
a consortium led by
<FONT style="white-space: nowrap">Santera-Olex</FONT> for the
construction and procurement of a softswitch system
(class&nbsp;4) and the improvement of switching capacity in the
existing switching system in Jakarta, Bandung and Surabaya.
Pursuant to the terms of this agreement, TELKOM was to pay
US$4.0&nbsp;million and Rp.2.5&nbsp;billion. On March&nbsp;4,
2004, the parties amended the agreement with respect to the
scope of work and work schedule, and agreed to reduce the Rupiah
portion of the consideration to Rp.2.2&nbsp;billion. The work
was completed in December 2004.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <FONT style="white-space: nowrap"><B>Co-Operation</FONT>
    Agreement on Fixed Wireless CDMA Facilities Construction in KSO
    Divre VII Area</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On January&nbsp;14, 2003, TELKOM and Bukaka SingTel entered into
a <FONT style="white-space: nowrap">Co-Operation</FONT>
Agreement on Fixed Wireless CDMA Facilities Construction in KSO
Divre VII Area (the
<FONT style="white-space: nowrap">&#147;Co-Operation</FONT>
Agreement&#148;) that implemented the terms of the June&nbsp;11,
2002 Memorandum of Understanding between TELKOM and Bukaka
SingTel. Under the terms of the
<FONT style="white-space: nowrap">Co-Operation</FONT> Agreement,
TELKOM, through its Fixed Wireless Division, will invest
US$30.8&nbsp;million for the construction of fixed wireless CDMA
facilities for 146,700 line units in Denpasar, Makasar, Manado,
Kupang and Mataram, which facilities will be
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
managed, operated and maintained by Bukaka SingTel. The new
facilities are expected to be completed by 2006, with TELKOM and
its Fixed Wireless Division receiving 95% of net revenues
generated by the new facilities until such time as an internal
rate of return of 28% is achieved, after which TELKOM and Bukaka
SingTel will each receive 50% of net revenues. The
<FONT style="white-space: nowrap">Co-Operation</FONT> Agreement
will expire on December&nbsp;31, 2010, at which time ownership
of the new facilities will vest in TELKOM.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B>Partnership Agreement for the Construction and Provision of
    High Performance Backbone in Sumatera</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On November&nbsp;30, 2001, TELKOM signed a partnership agreement
with a consortium consisting of PT&nbsp;Pirelli Cables Indonesia
and PT&nbsp;Siemens Indonesia for the construction and provision
of a high performance backbone network in Sumatera. The
agreement became effective as of June&nbsp;10, 2002. The scope
of work includes the provision of an optical fiber cable,
together with transmission equipment and network management
systems. TELKOM is obligated to pay US$49.2&nbsp;million and
Rp.174.4&nbsp;billion (together with
<FONT style="white-space: nowrap">value-added</FONT> tax
thereon) as consideration. The amount due under the agreement
was fully paid in April 2004.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B>Partnership Agreement for the Development of a PSTN Regional
    Junction for Regional Division V (East Java)</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;5, 2001, TELKOM entered into a partnership
agreement with a consortium consisting of Sumitomo Corporation,
NEC Corporation and PT&nbsp;Nasio Karya Pratama for the
development of a high quality PSTN Regional Junction for
Regional Division V (East Java). The scope of work includes the
development of a SDH transmission system, as well as the
provision of ancillary fiber optic and other related equipment.
TELKOM was initially obligated to pay Japanese Yen
3.7&nbsp;billion and Rp.125.5&nbsp;billion (which is inclusive
of <FONT style="white-space: nowrap">value-added</FONT> tax).
The parties agreed to add another partner, PT&nbsp;Communication
Cable System Indonesia, to the consortium on September&nbsp;27,
2002. In accordance with an amendment agreement dated
December&nbsp;11, 2003, the parties agreed to amend the contract
price payable by TELKOM to Japanese Yen 1,258.8&nbsp;million and
Rp.188.8&nbsp;billion (which is exclusive of
<FONT style="white-space: nowrap">value-added</FONT> tax). In
June 2004, the parties agreed to amend this agreement for the
volume and scope of work and the project implementation period.
The total contract price after this amendment is
Rp.187.4&nbsp;billion, or Japanese Yen 1.3&nbsp;billion. The
development project was completed in October 2004.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B>Agreement for
    <FONT style="white-space: nowrap">Dumai-Melaka</FONT> Cable
    System</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On May&nbsp;14, 2004, TELKOM entered into a Cooperation
Agreement with Telekom Malaysia Berhad (&#147;Telekom
Malaysia&#148;) pursuant to which TELKOM and Telekom Malaysia
formed a consortium for the deployment and maintenance of the
<FONT style="white-space: nowrap">Dumai-Melaka</FONT> Cable
System. On the same date, the consortium entered into a Supply
Contract with NEC Corporation for the deployment of the
150&nbsp;km optical submarine cable between Indonesia and
Malaysia, which was scheduled to be completed by the end of 2004
and was completed in January 2005. TELKOM and Telekom Malaysia
were to contribute equally to a payment to NEC Corporation of
US$8.7&nbsp;million.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B>Acquisition of Dayamitra</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On May&nbsp;17, 2001, TELKOM acquired 90.32% of the issued and
fully paid shares of Dayamitra, the KSO VI Investor, for
US$134.2&nbsp;million (including consultant&#146;s fee of
US$3.3&nbsp;million) and also purchased a call option and
granted a put option with respect to the remaining 9.68% partner
shares of Dayamitra for the amount of US$6.3&nbsp;million which
was fully paid in 2003. An initial payment of
US$18.3&nbsp;million was paid on the closing date of the
transaction on May&nbsp;17, 2001, US$8.9&nbsp;million was paid
on August&nbsp;10, 2001 as an adjustment to the purchase price
based on Dayamitra&#146;s adjusted working capital and the
balance of US$103.6&nbsp;million was to be paid through an
escrow account in eight quarterly installments of
US$12.9&nbsp;million each beginning on August&nbsp;17, 2001 and
TELKOM paid the last quarterly installment on May&nbsp;17, 2003.
On December&nbsp;14, 2004, TELKOM exercised its call option to
purchase, and acquired, the remaining 9.68% of the shares of
Dayamitra, for an aggregate consideration
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
of approximately US$22.1&nbsp;million which represents the
present value of the option strike price of US$16.2&nbsp;million
plus the option purchase price of US$6.3&nbsp;million and
payment for Dayamitra&#146;s adjusted working capital of
US$1.0&nbsp;million. TELKOM is required to pay the option strike
price less funds available in the escrow account on
November&nbsp;30, 2004 in 16 equal installments, the last of
which is required to be made on March&nbsp;26, 2006.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B>PT&nbsp;Mitra Global Telekomunikasi Indonesia</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On January&nbsp;20, 2004, TELKOM and MGTI entered into an
agreement to amend and restate the KSO Agreement with respect to
Regional Division IV. Under the amended and restated KSO
agreement, the rights to operate
<FONT style="white-space: nowrap">fixed-line</FONT>
telecommunication services in KSO IV region are transferred to
TELKOM and KSO IV is operated under the management, supervision,
control and responsibility of TELKOM. In addition, for the
remaining KSO period, TELKOM is entitled at its sole discretion
and expense to construct new telecommunication facilities in
Regional Division IV. MGTI receives fixed monthly payments,
while TELKOM is entitled to the balance of the KSO revenues
after the monthly amounts due to MGTI and operating expenses. If
the KSO IV unit is unable to or does not for any reason pay MGTI
the fixed monthly payments due to it, TELKOM is obligated to
make up any deficiency. At the end of the KSO period
(December&nbsp;31, 2010), all rights, title and interest of MGTI
in existing property, plant and equipment (including new
additional installations) and inventories shall be transferred
to TELKOM at no cost. As a result of the amended and restated
KSO agreement, TELKOM obtained the legal right to control
financial and operating decisions of Regional Division IV for a
purchase price of US$390.7&nbsp;million, or
Rp.3,285&nbsp;billion, which represents the present value of the
fixed monthly payments (totaling US$517&nbsp;million) to be paid
by TELKOM to MGTI from 2004 through 2010 plus direct cost of the
business combination.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Indemnity given to KAP Hans Tuanakotta Mustofa &#38; Halim
(formerly KAP Hans Tuanakotta &#38; Mustofa)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM has entered into three indemnity agreements with
Deloitte. Under the first agreement, dated February&nbsp;9,
2004, TELKOM agreed to indemnify Deloitte against reasonable
legal costs incurred in successfully defending any legal
proceedings brought against Deloitte on the basis of the
inclusion of the audited 2000 and 2001 financial statements in
Amendment No.&nbsp;2 to 2002 Annual Report on Form&nbsp;20-F/A
that was filed on February&nbsp;9, 2004, provided however that
the indemnity will be void and inoperative if a court, after
adjudication, determines that Deloitte is liable for
professional malpractice. If this situation were to arise,
Deloitte has agreed to immediately reimburse TELKOM for all
amounts paid by TELKOM under this indemnity.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the second agreement, dated June&nbsp;29, 2004, TELKOM has
agreed to indemnify Deloitte against reasonable legal costs
incurred in successfully defending any legal proceedings brought
against Deloitte on the basis of the inclusion of the audited
2001 financial statements in its 2003 Annual Report on
Form&nbsp;20-F, provided however that the indemnity will be void
and inoperative if a court, after adjudication, determines that
Deloitte is liable for professional malpractice. If this
situation were to arise, Deloitte has agreed to immediately
reimburse TELKOM for all amounts paid by TELKOM under this
indemnity.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the third agreement, dated April&nbsp;25, 2005, TELKOM
provided a similar indemnity to the second agreement, but with
respect to inclusion of the audited 2001 financial statements in
its Amendment No.&nbsp;1 to 2003 Annual Report on
Form&nbsp;<FONT style="white-space: nowrap">20-F/A.</FONT>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Medium-Term Notes&nbsp;Issuance Agreement</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
See Item&nbsp;5. &#147;Operating and Financial Review and
Prospects&nbsp;&#151; B. Liquidity and Capital
Resources&nbsp;&#151;
<FONT style="white-space: nowrap">Medium-Term</FONT> Notes&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
See Exhibit&nbsp;4.45 for an English summary of the terms and
conditions of the&nbsp;MTN.
</DIV>

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<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NEC-Siemens
Consortium</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On June&nbsp;10, 2005, TELKOM entered into a partnership
agreement with NEC-Siemens Consortium, a consortium consisting
of NEC Corporation and PT&nbsp;Siemens Indonesia for the
procurement and installation of Ring JASUKA Backbone amounting
to US$46.9&nbsp;million and Rp.169.6&nbsp;billion. The scope of
work under this agreement covers the procurement and
installation of Ring JASUKA Backbone, which is the optical cable
transmission system consisting of
(i)&nbsp;<FONT style="white-space: nowrap">Ring-I</FONT> (Link
Jakarta-Tanjung
Pandan-Pontianak-Batam-Dumai-Pekanbaru-Palembang-Jakarta); and
(ii)&nbsp;Ring-II (Link Medan-Padang-Pekanbaru-Medan).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In July 2005, TELKOM entered into a supply contract with NEC
Corporation for the Tanjung Pandan-Pontianak capacity expansion
amounting to US$4,636,493.96, excluding 10% VAT. The scope of
work under this agreement includes the procurement and
installation of Ring JASUKA Backbone, which expands the capacity
of the existing undersea optical cable transmission system.
</DIV>

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<B>D.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exchange controls</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Foreign Equity Ownership Restrictions</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Prior to September 1997, foreign investors were only permitted
to purchase up to 49% of shares offered in a public offering and
up to 49% of the publicly listed shares of any Indonesian listed
company regardless of the nature of their activities. On
September&nbsp;4, 1997, such restrictions were removed for most
Indonesian companies, including TELKOM.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Foreign Exchange</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Foreign exchange controls were abolished in 1971 and Indonesia
now maintains a liberal foreign exchange system that permits the
free flow of foreign exchange. Capital transactions, including
remittances of capital, profits, dividends and interest, are
free of exchange controls. A&nbsp;number of regulations,
however, have an impact on the exchange system. For example,
only banks are authorized to deal in foreign exchange and
execute exchange transactions related to the import and export
of goods. In&nbsp;addition, Indonesian banks (including branches
of foreign banks in Indonesia) are required to report to Bank
Indonesia (the Indonesian Central Bank) any fund transfers
exceeding US$10,000.
As&nbsp;a&nbsp;<FONT style="white-space: nowrap">state-owned</FONT>
company, TELKOM, based on the decree of the Head of Foreign
Commercial Loan Coordinating Team (&#147;PKLN&#148;), is
required to obtain an approval from PKLN prior to acquiring
foreign commercial loans and must submit periodical reports to
PKLN during the term of the&nbsp;loans.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Bank Indonesia holds the authority to issue Rupiah currency and
has responsibility for maintaining the stability of the Rupiah.
Prior to August&nbsp;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 offer prices announced by Bank Indonesia on a
daily basis. On August&nbsp;14, 1997, Bank Indonesia terminated
the trading band policy, effectively free floating the Rupiah
against other currencies. Since that date, the Rupiah has
depreciated significantly against world currencies.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During the past 25&nbsp;years, the Rupiah has been devalued
three times against the U.S.&nbsp;Dollar. These downward
adjustments occurred in November 1978, when the exchange rate
was realigned from Rp.415 to Rp.623 to the U.S.&nbsp;Dollar; in
March 1983, when the rate went from Rp.703 to Rp.970 to the
U.S.&nbsp;Dollar; and in September 1986, when the rate fell from
Rp.1,134 to Rp.1,644 to the U.S.&nbsp;Dollar. Between the time
of the 1986 devaluation and August&nbsp;14, 1997 the value of
the Rupiah has gradually adjusted downward against the
U.S.&nbsp;Dollar by about 4% annually. Since the free-floating
regime was implemented in August 1997, the Rupiah fluctuation
has been significant. During 2005, the average rate of Rupiah to
the U.S.&nbsp;Dollar was Rp.9,710, with the highest and lowest
rates being Rp.10,800 and Rp.9,133 respectively.
</DIV>

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<B>E.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Taxation</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
THE FOLLOWING SUMMARY OF INDONESIAN AND UNITED STATES FEDERAL
INCOME TAX MATTERS CONTAINS A DESCRIPTION OF THE PRINCIPAL
INDONESIAN AND U.S.&nbsp;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.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Indonesian Taxation</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following is a summary of the principal Indonesian tax
consequences of the ownership and disposition of Common Stock or
ADSs to a <FONT style="white-space: nowrap">non-resident</FONT>
individual or
<FONT style="white-space: nowrap">non-resident</FONT> entity
that holds Common Stock or ADSs (a&nbsp;&#147;Non-Indonesian
Holder&#148;). As used in the preceding sentence, a
<FONT style="white-space: nowrap">&#147;non-resident</FONT>
individual&#148; is a foreign national individual who is not
physically present in Indonesia for 183&nbsp;days or more during
any twelve month period or present for any period with the
intent to reside in Indonesia, during which period such
<FONT style="white-space: nowrap">non-resident</FONT> individual
receives income in respect of the ownership or disposition of
Common Stock or ADSs and a
<FONT style="white-space: nowrap">&#147;non-resident</FONT>
entity&#148; is a corporation or a
<FONT style="white-space: nowrap">non-corporate</FONT> body that
is established, domiciled or organized under the laws of a
jurisdiction other than Indonesia and does not have a fixed
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
<FONT style="white-space: nowrap">non-Indonesian</FONT> entity
receives income in respect of the ownership or disposition of
Common Stock or ADSs. In&nbsp;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&nbsp;party.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividends</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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, which,
as of the date of this Annual Report is at the rate of 20%, on
the amount of the distribution (in&nbsp;the case of cash
dividends) or on the stockholders&#146; proportional share of
the value of the distribution. A&nbsp;lower rate provided under
double taxation treaties may be applicable provided the
recipient is the beneficial owner of the dividend and has
provided to the Company (with a copy to the Indonesian Office of
Tax Services where the Company is registered) a Certificate of
Tax Residence issued by the competent authority, or its
designee, of the jurisdiction where the Non-Indonesian Holder is
domiciled (the &#147;Certificate of Residence&#148;). 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&nbsp;Kingdom and the
United&nbsp;States of America. Under the
<FONT style="white-space: nowrap">U.S.-Indonesia</FONT> double
taxation treaty, the withholding tax on dividends is generally,
in the absence of a 25% voting interest, reduced to&nbsp;15%.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capital Gains</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The sale or transfer of Common Stock through an Indonesian stock
exchange is subject to a final 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 of
founder shares or the sale or transfer of founder shares through
an Indonesian stock exchange may, under current Indonesian tax
regulations, be subject to additional 0.5% final income&nbsp;tax.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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&nbsp;4
paragraph&nbsp;(2) of the Indonesian income tax law) may be
subject to Indonesian withholding tax at the rate of 20%.
In&nbsp;1999,
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
the Ministry of Finance issued a Decision that stipulates the
estimated net income for the sale of shares in a
<FONT style="white-space: nowrap">non-public</FONT> company to
be 25% of the sale price, resulting in an effective withholding
tax rate of 5% of the sales price. This is a final withholding
tax and the obligation to pay lies with the buyer (if&nbsp;it is
an Indonesian taxpayer) or the Company (if&nbsp;the buyer is a
non-resident taxpayer). Exemption from withholding tax on income
from the sale of shares in a
<FONT style="white-space: nowrap">non-public</FONT> company may
be available to
<FONT style="white-space: nowrap">non-resident</FONT> sellers of
shares depending on the provisions of the relevant double
taxation treaties. In order to benefit from the exemption under
the relevant double taxation treaty, the non-resident seller
must provide the Certificate of Tax Residence to the buyer or
the Company and to the Indonesian Tax Office that has
jurisdiction over the buyer or the Company (if&nbsp;the buyer is
a <FONT style="white-space: nowrap">non-resident</FONT>
taxpayer).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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, except for the sale or transfer of shares in a
non-public company, the current Indonesian tax regulations do
not provide specific procedures for removing the
purchaser&#146;s or Indonesian broker&#146;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 Office by making a
specific application accompanied by a Certificate of Residence
issued by the competent tax authority, or its designee; of the
jurisdiction in which the Non-Indonesian Holder is domiciled.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stamp Duty</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Any documents that are prepared in the transactions in common
stock in Indonesia, which documents will be used as evidence in
Indonesia, are subject to stamp duty of Rp.6,000. Generally, the
stamp duty is due at the time the document is executed.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>United States Federal Income Taxation</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following is a general description of the principal
United&nbsp;States federal income tax consequences to a
U.S.&nbsp;Holder, as defined below, 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&nbsp;&#147;Code&#148;), Treasury regulations
promulgated thereunder, and judicial and administrative
interpretations thereof, all as in effect 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, financial institutions, persons subject to the
alternative minimum tax, broker-dealers, persons that have a
&#147;functional currency&#148; other than the U.S.&nbsp;Dollar
and persons owning, directly or indirectly, 10% or more of the
voting shares of the Company) may be subject to special rules
not discussed below. The following summary is limited to
U.S.&nbsp;Holders, as defined below, who will hold the ADSs or
shares of Common Stock as &#147;capital assets&#148; within the
meaning of Section&nbsp;1221 of the Code and not as part of a
&#147;hedge,&#148; &#147;straddle&#148; or &#147;conversion
transaction&#148; within the meaning of Sections&nbsp;1221, 1092
and 1258 of the Code and the regulations thereunder. The
discussion below also does not address the effect of any
United&nbsp;States state, local or foreign tax law or any
United&nbsp;States federal estate, gift or alternative minimum
tax law on a holder of the ADSs or shares of Common&nbsp;Stock.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As used herein, the term &#147;U.S.&nbsp;Holder&#148; means a
holder of ADSs or shares of Common Stock who is (i)&nbsp;a
citizen or resident of the United&nbsp;States for
United&nbsp;States federal income tax purposes; (ii)&nbsp;a
corporation, or other entity treated as a corporation, created
or organized under the laws of the United&nbsp;States or any
political subdivision thereof; (iii)&nbsp;an estate the income
of which is subject to United&nbsp;States federal income tax
without regard to its source; or (iv)&nbsp;a trust if a court
within the United&nbsp;States is able to exercise primary
supervision over the administration of the trust and one or more
United&nbsp;States persons have the authority to control all
substantial decisions of the&nbsp;trust.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If a partnership (including any entity treated as a partnership
for United&nbsp;States federal income tax purposes) holds ADSs
or shares of Common Stock, the tax treatment of a partner in
such partnership will depend upon the status of the partner and
the activities of the partnership. Partners in such a
partnership should consult their tax advisors as to the
particular United States federal income tax consequences
applicable to&nbsp;them.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Holders of ADSs 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&#146;s proportionate interest in
the shares of Common Stock, a holder&#146;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.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
You are urged to consult your tax advisor concerning the
particular United&nbsp;States federal, state, local and foreign
income and other tax considerations regarding the ownership and
disposition of the ADSs or shares of Common Stock.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Taxation of Distributions</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Subject to the passive foreign investment company
(&#147;PFIC&#148;) rules discussed below, the gross amount of a
distribution with respect to ADSs or shares of Common Stock
(other than certain pro rata distributions of ADSs or shares of
Common Stock or rights to subscribe for ADSs or shares of Common
Stock), without reduction for Indonesian taxes withheld, will be
treated as a dividend subject to tax as ordinary income on the
date of receipt by the Depositary or the holder of such ADSs or
shares of Common Stock, respectively, to the extent of the
Company&#146;s current and accumulated earnings and profits as
determined for U.S.&nbsp;federal income tax purposes. A
non-corporate recipient of dividend income will generally be
subject to tax on such dividend income at a maximum
U.S.&nbsp;federal rate of 15% rather than the marginal tax rates
generally applicable to ordinary income provided certain
requirements are met. Dividends received from &#147;qualified
foreign corporations&#148; generally qualify for the reduced
rate. A&nbsp;non-U.S.&nbsp;corporation (other than a PFIC) will
generally be considered to be a qualified foreign corporation
(i)&nbsp;if it is eligible for the benefits of a comprehensive
tax treaty with the United States which the Secretary of
Treasury determines is satisfactory for purposes of this
provision and which includes an exchange of information program;
or (ii)&nbsp;with respect to any dividend it pays on stock which
is readily tradable on an established securities market in the
United&nbsp;States. The Treasury Department has determined that
the income tax treaty between Indonesia and the United States as
in effect as of the date of this Annual Report meets the
requirements described in clause&nbsp;(i) above and the Company
believes that it would be eligible for the benefits of such
treaty. In&nbsp;addition, because the ADSs are listed on the
New&nbsp;York Stock Exchange, an established securities market
in the United&nbsp;States, they would under Treasury Department
guidelines be considered to be readily tradeable on that
exchange. Distributions, if any, in excess of current and
accumulated earnings and profits will constitute a return of
capital and will be applied against and reduce such
holder&#146;s tax basis in such ADSs or shares of Common Stock.
To the extent that the remaining portion of the distribution is
in excess of such basis, that amount will constitute capital
gain as discussed below. U.S.&nbsp;corporate holders will
generally not be eligible for the dividends received deduction
otherwise allowed under Section&nbsp;243 of the Code for
distributions to domestic corporations in respect of
distributions on ADSs or shares of Common Stock.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If a distribution is paid with respect to ADSs or shares of
Common Stock in Rupiah, the amount of the distribution will
generally equal the U.S.&nbsp;Dollar value of the Rupiah
distribution, including the amount of any Indonesian tax
withheld, calculated by reference to the exchange rate in effect
on the date the distribution is actually or constructively
received by the Depositary or the holder of such shares of
Common Stock, respectively, regardless of whether the payment is
in fact converted into U.S.&nbsp;Dollars on that date. Any
subsequent gain or loss in respect of such Rupiah arising from
exchange rate fluctuations will be ordinary income or loss. This
exchange gain or loss will generally be treated as United States
source income for United States foreign tax credit limitation
purposes. If the Depositary
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
converts the Rupiah to U.S.&nbsp;Dollars on the date it receives
such Rupiah, U.S.&nbsp;Holders will not recognize any such gain
or loss.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Subject to the limitations and conditions set forth in the Code,
U.S.&nbsp;Holders 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. 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.
U.S.&nbsp;Holders that do not elect or are not permitted to
claim foreign tax credits may instead claim a deduction for
Indonesian tax withheld.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Taxation of Capital
Gains</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Subject to the PFIC rules discussed below, the sale or other
disposition of ADSs or shares of Common Stock by a
U.S.&nbsp;Holder will generally result in the recognition of
U.S.&nbsp;source gain or loss in an amount equal to the
difference between the amount realized on the sale or other
disposition and the holder&#146;s adjusted basis in such ADSs or
shares of Common Stock. This will result in a
<FONT style="white-space: nowrap">long-term</FONT> or
<FONT style="white-space: nowrap">short-term</FONT> capital gain
or loss, depending on whether the ADSs or shares of Common Stock
have been held for more than one year. As of the date of this
Annual Report,
<FONT style="white-space: nowrap">long-term</FONT> capital gain
of a <FONT style="white-space: nowrap">non-corporate</FONT>
holder is subject to a maximum tax rate of 15% in respect of
property with a holding period of more than one year. The
deductibility of a capital loss is subject to limitations.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Passive Foreign Investment
Company Status</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Adverse United States federal income tax rules apply to holders
of equity interests in a corporation classified as a 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 the average value of its assets determined
quarterly for the taxable year consists of passive assets.
Passive assets are defined as assets that give rise, or that
reasonably could give rise during the reasonably foreseeable
future, to passive income.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Based on the Company&#146;s existing and anticipated future
operations, the Company believes that it is not a PFIC. If the
Company is not operated in the manner anticipated as of the date
of this Annual Report, however, the Company may be considered a
PFIC for the current or for a subsequent year depending upon the
composition of the Company&#146;s income or assets.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If the Company is or becomes a PFIC, any gain upon sale or other
disposition or certain distributions realized by a
U.S.&nbsp;Holder with respect to its ADSs or shares of Common
Stock would be allocated ratably over the entire period during
which the U.S.&nbsp;Holder held such ADSs or shares of Common
Stock and would be subject to the highest ordinary income tax
rate for each taxable year (other than the amounts allocable to
the current year of the U.S.&nbsp;Holder) in which the items
were treated as having been earned, regardless of the rate
otherwise applicable to the U.S.&nbsp;Holder. Such
U.S.&nbsp;Holder would also be liable for an additional tax
equal to an interest charge on the tax liability attributable to
income that is treated as allocated to prior years as if such
liability had actually been due in each such prior year.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If the Company is classified as a PFIC, a U.S.&nbsp;Holder would
not be eligible for a reduced tax rate on dividends paid on, and
on gain realized with respect to dispositions of, ADSs or shares
of Common Stock. See &#147;Taxation of Distributions&#148; above.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>F.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividends and paying
agents</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Not applicable.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>G.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Statement by experts</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Not applicable.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>H.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Documents on display</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM files reports, including annual reports on
Form&nbsp;<FONT style="white-space: nowrap">20-F</FONT> and
other information with the SEC pursuant to the rules and
regulations of the SEC that apply to foreign private issuers.
You may read and copy any materials filed with the SEC at the
Public Reference Room at 450 Fifth Street, N.W.,
Washington,&nbsp;D.C. 20459. You may obtain information on the
operation of the Public Reference Room by calling the SEC at
<FONT style="white-space: nowrap">1-800-SEC-0330.</FONT> Subject
to some exceptions, TELKOM is required to file its periodic
reports electronically through the SEC&#146;s EDGAR system. Any
filings TELKOM makes electronically will be available to the
public over the Internet at the SEC&#146;s Website at
http://www.sec.gov.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>I.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subsidiary Information</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Not applicable.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='115'></A>
</DIV>

<!-- link1 "ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK" -->

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    <TD><B>ITEM 11.</B></TD>
    <TD>
    <B>QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK</B></TD>
</TR>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Disclosure About Market
Risk</B>
</DIV>

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<B>General</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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
<FONT style="white-space: nowrap">long-term</FONT> investments.
The Company does not generally hedge its
<FONT style="white-space: nowrap">long-term</FONT> foreign
currency liabilities as it believes that the expenses associated
with fully hedging such liabilities are not justified. Instead
the Company hedges its obligations for the current year. As of
December&nbsp;31, 2005, foreign currency time deposits provided
approximately 32.25% coverage against foreign currency
denominated current liabilities. The Company&#146;s exposure to
interest rate risk is managed through maintaining a mix of fixed
and variable rate liabilities and assets, including
<FONT style="white-space: nowrap">short-term</FONT> fixed rate
assets, the rates for which are reset periodically. The
Company&#146;s exposure to such market risks fluctuated
significantly during 2003, 2004 and 2005 as the Indonesian
economy has been affected by a significant fluctuation of the
Rupiah and interest rates. The Company is not able to predict
whether such conditions will continue during the remainder of
2006 or thereafter.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest Rate Risk</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s exposure to interest rate fluctuations
results primarily from floating rate
<FONT style="white-space: nowrap">long-term</FONT> debt pursuant
to loans under the Government
<FONT style="white-space: nowrap">on-lending</FONT> program
which have been used to finance the Company&#146;s capital
expenditures which bear interest at rates for the Rupiah portion
based on the average for the preceding six months for three
month certificates issued by Bank Indonesia plus 1% or based on
floating interest rates offered by the lenders plus 5.25% and
for the <FONT style="white-space: nowrap">non-Rupiah</FONT>
portion based on floating interest rate offered by the lenders
plus 0.5%. See Note&nbsp;22 to the Company&#146;s consolidated
financial statements. To the extent interest rates in Indonesia
fluctuate significantly, the Company&#146;s interest obligations
under its <FONT style="white-space: nowrap">long-term</FONT>
debt could increase.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The table below provides information about the Company&#146;s
material financial instruments, some of which are sensitive to
changes in interest rates. For debt obligations and time
deposits, the table presents principal cash flows and related
weighted average interest rates by expected maturity dates. The
information is presented in Rupiah equivalents, which is the
Company&#146;s reporting currency. The
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
instrument&#146;s actual cash flows are denominated in Rupiah,
U.S.&nbsp;Dollar, Euro 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)&nbsp;fixed interest rates on Rupiah time deposits are based
on average interest rates offered in effect as of
December&nbsp;31, 2005 by the banks where such deposits were
located; (ii)&nbsp;variable interest rates on Rupiah denominated
<FONT style="white-space: nowrap">long-term</FONT> liabilities
are calculated as of December&nbsp;31, 2005 and are based on
contractual terms setting interest rates based on average rates
for the preceding six months on three month certificates issued
by Bank Indonesia or based on the average
<FONT style="white-space: nowrap">3-month</FONT> deposit rate
offered by the lenders; (iii)&nbsp;variable interest rates on
U.S.&nbsp;Dollar deposits are based on interest rates offered by
the various lending institutions to the Republic of Indonesia as
of December&nbsp;31, 2005; and (iv)&nbsp;the value of marketable
securities is based on the value of such securities at
December&nbsp;31, 2005. 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
influenced by a number of factors, including changes in interest
rates in Indonesia and other monetary and macro economic factors
affecting Indonesia. Such assumptions are different from the
rates used in the Company&#146;s consolidated financial
statements and accordingly amounts shown in the table may vary
from amounts shown in the Company&#146;s consolidated financial
statements.
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<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Outstanding Balance as at</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="27">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>December&nbsp;31, 2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap><B>Expected Maturity Date</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Foreign</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp.</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2011-</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Fair</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Currency</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Equivalent</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rate</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2006</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2007</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2008</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2009</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2010</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2025</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Value</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
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    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
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    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(in</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Rp. in</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Rp. in</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>million)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>million)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center"><B>(%)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>million)</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap><B>(Rp. in million)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>ASSETS</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
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    <TD align="left" valign="bottom">&nbsp;</TD>
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    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
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    <TD align="left" valign="bottom">&nbsp;</TD>
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    <TD>&nbsp;</TD>
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    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
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    <TD align="left" valign="bottom">&nbsp;</TD>
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    <TD>&nbsp;</TD>
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    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Fixed Rate</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Cash and cash equivalents</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Time deposit</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rupiah</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Principal</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,642,172</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,642,172</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,642,172</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.95</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Principal</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>72.32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>710,497</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>710,497</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>710,497</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Euro</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Principal</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>56.55</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>659,372</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>659,372</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>659,372</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Temporary Investments-Available-for- Sale Securities</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rupiah</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,064</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,064</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,064</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>LIABILITIES</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Short-term bank loans</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Variable Rate</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rupiah</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Principal</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>170,000.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>170,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>170,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>170,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,951</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Fixed Rate</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rupiah</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Principal</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,800.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,800</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">180

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 8.0pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="26%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Outstanding Balance as at</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="27">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>December&nbsp;31, 2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap><B>Expected Maturity Date</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Foreign</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp.</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="19">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2011-</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Fair</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Currency</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Equivalent</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rate</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2006</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2007</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2008</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2009</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2010</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2025</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Value</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(in</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Rp. in</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Rp. in</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>million)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>million)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center"><B>(%)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>million)</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap><B>(Rp. in million)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Long-term
    debts<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Variable Rate</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rupiah</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Principal</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,955,132.87</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,955,133</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>301,631</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>249,265</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>189,326</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>190,831</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>167,431</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>856,649</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,619,930</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>158,346</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>128,874</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>111,129</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>94,978</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>79,037</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>343,408</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Principal</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>198.21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,949,211</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>336,020</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>336,020</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>278,994</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>142,597</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>142,597</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>712,983</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,894,189</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>90,611</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>74,967</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>59,356</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>48,591</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41,020</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>91,603</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Euro</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Principal</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>36.68</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>427,718</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>171,087</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>171,087</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>85,544</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>422,954</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,226</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,640</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,184</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Fixed Rate</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rupiah</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Principal</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,880,065.08</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,880,065</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>178,921</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,480,643</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28,301</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35,090</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>43,060</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>114,083</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,948,814</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>282,853</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>174,127</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>48,090</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>40,766</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31,615</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28,724</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Principal</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>614.61</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,044,691</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,143,380</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,074,262</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,111,291</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,072,564</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,050,847</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>592,347</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,034,323</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>339,866</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>273,480</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>205,022</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>133,489</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>63,707</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>102,450</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Japanese Yen</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Principal</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,527.59</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,302,575</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>95,876</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>95,876</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>80,147</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>64,417</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>64,417</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>901,841</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,432,071</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38,364</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>36,508</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,588</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31,282</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,285</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>200,474</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Long-term debts consist of loans which are subject to interest;
    namely two-step loans, notes and bonds, liabilities of business
    acquisitions and long-term bank loans, in each case including
    their current maturities.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exchange Rate Risk</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s exposure to exchange rate fluctuations
results primarily from long-term debt obligations and accounts
receivable and payable, which are primarily paid for through
draw downs under the Government on-lending program and are
expressed in U.S.&nbsp;Dollar, Japanese Yen, Euro, Singapore
Dollar and Great Britain Pound Sterling. For a description of
the Company&#146;s foreign currency assets and liabilities, see
Note&nbsp;52 to the Company&#146;s consolidated financial
statements. Part of these obligations might be offset 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&nbsp;rates.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The table below provides information about the Company&#146;s
financial instruments by functional currency and presents such
information in Rupiah equivalents, which is the Company&#146;s
reporting currency. The information on instruments and
transactions that are sensitive to foreign exchange rates,
including U.S.&nbsp;Dollar, Euro, Singapore Dollar, Great
Britain Pound Sterling and Japanese Yen debt obligations and
term deposits and the Company&#146;s accounts payable and
receivable. The table presents principal cash flows by expected
maturity dates. The information presented in the table has been
determined based on assumptions for the exchange rates for
U.S.&nbsp;Dollar as well as other currencies, which are based on
the selling and buying rates quoted by Reuters on
December&nbsp;31, 2005, applied respectively to monetary assets
and liabilities. The buying and selling rates as of
December&nbsp;31, 2005 were Rp.9,825 and Rp.9,835 to US$1.00,
respectively. Telkomsel applied the Bank Indonesia middle buy
and sell rate for its monetary asset and liabilities which was
Rp.9,830 to US$1.00 as of December&nbsp;31, 2005. However, no
assurance can be given that such assumptions will be correct for
future periods.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">181

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
Such assumptions and the information described in the table may
be influenced by a number of factors, including a fluctuation
and/or depreciation of the Rupiah in future periods.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 8.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="26%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Outstanding Balance</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>as at</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="27">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>December&nbsp;31, 2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap><B>Expected Maturity Date</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Foreign</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp.</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="19">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2011-</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Fair</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Currency</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Equivalent</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2006</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2007</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2008</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2009</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2010</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2024</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Value</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(in</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Rp. in</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="27">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>millions)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>million)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap><B>(Rp. in million)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>ASSETS</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Cash and cash equivalents</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>81.96</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>805,489</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>805,489</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>805,489</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Japanese Yen</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Euro</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>59.14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>689,472</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>689,472</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>689,472</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Trade accounts receivable</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>207,311</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>207,311</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>207,311</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Other accounts receivable</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,910</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,910</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,910</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Euro</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>88</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>88</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>88</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Other current assets</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.63</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>133,926</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>133,926</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>133,926</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Advances and other non- current assets</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,162</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,162</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,162</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Escrow accounts</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12.89</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>126,128</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>126,128</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>126,128</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>LIABILITIES</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Trade accounts payable</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Related parties</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.09</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>148,423</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>148,423</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>148,423</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Third parties</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>125.40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,223,050</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,223,050</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,233,050</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Euro</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>68.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>796,343</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>796,343</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>796,343</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Great Britain Pound Sterling</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Japanese Yen</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>66.03</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,508</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,508</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,508</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Singapore Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Accrued expenses</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>206,639</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>206,639</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>206,639</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Japanese Yen</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>52.85</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,433</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,433</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,433</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Singapore Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.42</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,497</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,497</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,497</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Euro</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.79</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>102,509</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>102,509</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>102,509</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Advances from customers and suppliers</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,474</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,474</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,474</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Long-term
    debts<SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>812.82</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,993,902</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,479,401</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,410,282</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,390,285</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,215,160</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,193,444</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,305,330</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,928,512</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Japanese Yen</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,527.59</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,302,575</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>95,876</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>95,876</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>80,147</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>64,417</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>64,417</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>901,841</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,432,071</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Euro</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>36.68</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>427,718</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>171,087</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>171,087</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>85,544</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>422,954</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Long-term debts for the purpose of this table consist of loans
    denominated in foreign currencies namely,
    <FONT style="white-space: nowrap">two-step</FONT> loans,
    liabilities of business acquisitions,
    <FONT style="white-space: nowrap">long-term</FONT> bank loans,
    notes and bonds, in each case including their current maturities.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">182

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity Price Risk</I></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;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 financial performance of such
companies may be affected by the fluctuation of macro economic
and social conditions such as the level of economic activity,
Rupiah exchange rates against other currencies, inflation and
interest rates.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='116'></A>
</DIV>

<!-- link1 "ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES" -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="10%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top">
    <TD><B>ITEM 12.</B></TD>
    <TD>
    <B>DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Not applicable.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='117'></A>
</DIV>

<!-- link1 "PART II" -->

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>PART&nbsp;II</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='118'></A>
</DIV>

<!-- link1 "ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES" -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="10%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top">
    <TD><B>ITEM 13.</B></TD>
    <TD>
    <B>DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
There are no defaults, dividend arrearages or delinquencies to
which this Item applies. But see Item&nbsp;5. &#147;Operating
and Financial Review and Prospects&nbsp;&#151; B. Liquidity and
Capital Resources&nbsp;&#151; Indebtedness&#148; for information
on covenant defaults for which waivers have been obtained.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='119'></A>
</DIV>

<!-- link1 "ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS" -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="10%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top">
    <TD><B>ITEM 14.</B></TD>
    <TD>
    <B>MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND
    USE OF PROCEEDS</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Not applicable.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='120'></A>
</DIV>

<!-- link1 "ITEM 15. CONTROL AND PROCEDURES" -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="10%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top">
    <TD><B>ITEM 15.</B></TD>
    <TD>
    <B>CONTROL AND PROCEDURES</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Disclosure Controls and Procedures</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM has a disclosure committee comprised of 14 senior members
from various departments and chaired by the Director of Finance.
The disclosure committee&#146;s role is to support TELKOM&#146;s
management in designing and evaluating TELKOM&#146;s disclosure
controls and procedures and participating in the disclosure
process. TELKOM formally established its disclosure committee on
February&nbsp;18, 2005. Since its formal establishment, the
disclosure committee has established internal work procedures
relating to the preparation of various disclosure materials for
quarterly and annual reporting, including TELKOM&#146;s annual
report on
Form&nbsp;<FONT style="white-space: nowrap">20-F.</FONT> The
establishment of the disclosure committee formalized the
previous disclosure process where designated senior employees
from various departments were responsible for assisting with the
necessary disclosures, while the department heads were
responsible for reviewing of such disclosure materials.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM&#146;s principal executive officer and principal
financial officer carried out an evaluation of the effectiveness
of TELKOM&#146;s disclosure controls and procedures (as defined
in Rules&nbsp;<FONT style="white-space: nowrap">13a-15(e)</FONT>
and <FONT style="white-space: nowrap">15d-15(e)</FONT> of the
Exchange Act) as of December&nbsp;31, 2005. TELKOM&#146;s
principal executive officer and principal financial officer
concluded, based on their evaluation, as of December&nbsp;31,
2005, that the design and operation of TELKOM&#146;s disclosure
controls and procedures were not effective to ensure that
information required to be disclosed in the reports TELKOM files
and submits under the Exchange Act is recorded, processed,
summarized and reported as and when required, and is accumulated
and communicated to TELKOM&#146;s management, including
TELKOM&#146;s President Director and Director of Finance, to
allow timely decisions regarding required disclosure.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Internal Controls over Financial Reporting</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In connection with the audit of our financial statements,
reportable conditions (as defined under standards established by
the American Institute of Certified Public Accountants) relating
to TELKOM&#146;s internal control over financial reporting (as
defined in
Rules&nbsp;<FONT style="white-space: nowrap">13a-15(f)</FONT>
and <FONT style="white-space: nowrap">15d-15(f)</FONT> of the
Exchange Act) were identified and communicated by PwC in their
report dated January&nbsp;9, 2004 and delivered to
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
TELKOM on January&nbsp;12, 2004, and discussed by PwC with the
Board of Directors on January&nbsp;14, 2004 and with the Board
of Commissioners and the Audit Committee on January&nbsp;16,
2004, in connection with its audit of the consolidated financial
statements as of and for the year ended December&nbsp;31, 2002.
Reportable conditions were also identified and communicated by
KPMG to TELKOM and its Audit Committee on June&nbsp;29, 2004,
July 2005 and May 2006 in connection with its audit of the
consolidated financial statements as of and for the years ended
December&nbsp;31, 2003, 2004 and 2005, respectively. Both PwC
and KPMG identified the same material weaknesses based on their
respective audits of TELKOM. Both PwC and KPMG informed TELKOM
that they were unable to determine when such material weaknesses
first arose, as such material weaknesses appeared to exist prior
to the commencement of their respective audit periods. Both PwC
and KPMG informed the Audit Committee that they had identified
&#147;reportable conditions&#148; each of which constituted a
&#147;material weakness&#148; (as&nbsp;each such term is defined
under standards established by the American Institute of
Certified Public Accountants) in TELKOM&#146;s internal control
over financial reporting with respect to: (1)&nbsp;inadequate
personnel resources with sufficient knowledge and experience in
the application of Indonesian GAAP and US GAAP accounting
principles because TELKOM did not have sufficient personnel in
its accounting department with expertise in applying Indonesian
GAAP to complicated accounting issues or in identifying and
applying differences in accounting treatments under Indonesian
GAAP and U.S.&nbsp;GAAP; (2)&nbsp;deficiencies in the
organizational structure of the accounting department, including
the oversight function for accounting and financial reporting
because there was inadequate management, supervision and review
for the accounting functions; (3)&nbsp;inadequate internal
processes for the assessment of critical, significant and
judgmental accounting areas; accordingly, when a set of facts
gave rise to critical or significant accounting issues or raised
significant issues of judgment, such issues were not always
properly identified, or, even if properly identified, the
appropriate experts were not always consulted and issues of
judgment were not always elevated to the appropriate level of
management or the Audit Committee; and (4)&nbsp;insufficient
written policies and procedures for the accounting and financial
reporting function, insufficient knowledge of and compliance
with, existing policies and procedures among relevant personnel
and insufficient emphasis by the internal audit function on the
foregoing; in particular, accounting and financial reporting
personnel did not have objective written policies and procedures
to follow when addressing significant accounting and financial
reporting issues and so such issues were not always dealt with
in a consistent manner, and the internal audit function did not
focus on identifying or identify this issue as well as the other
reportable conditions identified herein.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In response to the matters identified by TELKOM&#146;s external
auditors, under the supervision of the Audit Committee, in
January 2004 TELKOM&#146;s senior management directed that
TELKOM dedicate resources and take steps to strengthen control
processes and procedures in order to prevent a recurrence of the
circumstances that resulted in the need to restate TELKOM&#146;s
consolidated financial statements which include among others:
(i)&nbsp;an assessment of the organizational structure of the
finance department, including to determine additional resources
which need to be dedicated to it; (ii)&nbsp;the enhancement of
all finance-related policies and procedures covering accounting
and financial reporting; (iii)&nbsp;the improvement of standard
documentations requirements for the assessment of critical,
significant and judgmental accounting areas; (iv)&nbsp;the
improvement of understanding of relevant Indonesian GAAP and
U.S.&nbsp;GAAP accounting principles and financial reporting
responsibilities across all business units through intensive and
continuing education and training and proactive consultations
with advisors on technical matters as they relate to
TELKOM&#146;s financial reporting; and (v)&nbsp;modification of
the mandate of TELKOM&#146;s internal audit function to place
greater emphasis on the adequacy of, and compliance with,
procedures relating to internal control over financial reporting.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Since 2004, TELKOM has taken a number of steps specifically
aimed at addressing the senior management&#146;s directions on
the foregoing. Such steps include:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (1)&nbsp;TELKOM carried out a recruitment exercise for
    accountancy graduates and provided regular training programs on
    accounting and financial reporting issues with emphasis on
    Indonesian and U.S.&nbsp;GAAP. Since May 2004, TELKOM has
    provided additional information, resources</TD>
</TR>

</TABLE>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    and databases to its accounting staff by subscribing to various
    printed or <FONT style="white-space: nowrap">on-line</FONT>
    accounting publications.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (2)&nbsp;TELKOM over hauled its organization structure in
    respect of internal control over financial reporting to achieve
    the separation of each financial reporting function and also to
    bring qualified, knowledgeable employees to implement
    TELKOM&#146;s improved financial reporting policies and
    procedures. In connection with the improvement of the oversight
    function, TELKOM&#146;s senior management directed the addition
    of a new oversight function to its accounting organization
    structure to improve the assessment of critical, significant and
    judgmental accounting issues by establishing a new unit
    dedicated to the on-going review and monitoring of TELKOM&#146;s
    internal control over financial reporting. As part of such
    efforts, TELKOM established its &#147;Finance Center&#148; on
    January&nbsp;6, 2006. The Finance Center is a unit which
    directly reports to Finance Director and acts as a centralized
    decision making and execution body in relation to TELKOM&#146;s
    financial reporting for all the business units. The unit is also
    responsible for supporting all the business units of TELKOM in
    all relevant financial areas, including its accounting function.
    Since the establishment of the Finance Center, the Accounting
    Department, which also directly reports to Finance Director and
    is a unit independent from Finance Center, focuses on reviewing
    financial statements produced by all the business units of
    TELKOM to ensure that the financial statements are prepared in
    accordance with generally accepted accounting principles.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (3)&nbsp;On April&nbsp;13, 2006, TELKOM formally approved and
    issued revised accounting and financial reporting policies and
    related supplements, which take effect retroactively from
    January&nbsp;1, 2006. Following the issuance of the revised
    accounting and financial reporting policies and the supplements,
    TELKOM is updating its accounting manuals and work procedures as
    operating guidelines for implementation of the new policies.
    Such revised accounting manuals and work procedures are expected
    to be finalized in the third quarter of&nbsp;2006.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (4)&nbsp;To improve its internal control over financial
    reporting at the entity level and to incorporate the best
    corporate governance practices, TELKOM restructured its
    corporate organization and separated the Risk Management unit
    and Legal Compliance unit, each reporting directly to the CEO.
    Each of these units is responsible for ensuring TELKOM&#146;s
    compliance with various internal and external rules and
    regulations in respect of financial reporting and minimizing
    TELKOM&#146;s regulatory and business risks which may arise in
    conducting its accounting and financial reporting functions.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (5)&nbsp;Since 2004, in preparation for the compliance with
    Section&nbsp;404 of Sarbanes-Oxley Act of 2002, TELKOM, in
    conjunction with Ernst &#38; Young, has designed an internal
    control framework and protocol for all of its business
    processes. Since then, TELKOM has gradually adopted and
    implemented such new internal control system in its daily
    operations. Since December 2004, TELKOM has conducted
    walkthroughs and test-runs with respect to the implementation of
    the new internal controls, has made adjustments and also taken
    remedial steps where appropriate to evaluate and monitor the
    implementation of the Directors&#146; Decree on Internal
    Control. TELKOM plans to implement these regular tests and
    remedy problems identified through such tests on a regular
    basis. In addition, TELKOM, also in conjunction with
    Ernst&nbsp;&#38; Young, reviewed the implementation of its
    information technology-related general controls. Such review was
    completed on July&nbsp;15,&nbsp;2005.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (6)&nbsp;Since December 2004, TELKOM has modified the mandate of
    its internal audit function to place greater emphasis on the
    adequacy of, and compliance with, procedures relating to
    internal control over financial reporting. Since April 2005,
    with the assistance of Ernst &#38; Young, TELKOM has also been
    assessing the roles and functions of its Internal Audit Unit to
    ensure compliance with the Sarbanes-Oxley Act of&nbsp;2002.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">185

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='121'></A>
</DIV>

<!-- link1 "ITEM 16. RESERVED" -->

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>ITEM 16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RESERVED</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<A name='122'></A>
</DIV>

<!-- link1 "ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT" -->

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>ITEM 16A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;AUDIT COMMITTEE
FINANCIAL EXPERT</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Board of Commissioners has determined that Mr.&nbsp;Sahat
Pardede, a member of TELKOM&#146;s Audit Committee, qualifies as
an Audit Committee Financial Expert in accordance with the
requirements of Item&nbsp;16A of Form&nbsp;20-F.
Mr.&nbsp;Pardede has been a member of TELKOM&#146;s Audit
Committee since February&nbsp;17, 2004. Prior to his appointment
as a member of TELKOM&#146;s Audit Committee, Mr.&nbsp;Pardede
practiced, and is currently practicing, as a Certified Public
Accountant in Indonesia and provided auditing services and other
financial services to numerous private companies and public
institutions. Mr.&nbsp;Pardede graduated with a degree in
accounting from the State College of Accountancy, Jakarta and
holds a master degree in business administration from Saint
Mary&#146;s University, Canada. He is a Certified Public
Accountant and is also a member of the Indonesian Institute of
Accountants.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='123'></A>
</DIV>

<!-- link1 "ITEM 16B. CODE OF ETHICS" -->

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>ITEM 16B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CODE OF ETHICS</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have adopted a code of ethics in accordance with the
provisions of Section&nbsp;406 of the Sarbanes-Oxley Act of
2002. Our code of ethics applies to our President Director,
Finance Director (being our officers in equivalent positions to
a Chief Executive Officer and a Chief Financial Officer) and
persons performing similar functions as well as to our
Commissioners, Directors and other officers and employees. Our
code of ethics may be viewed on our company web site at
www.telkom-indonesia.com/hubunganinvestor/corporategovernance/&#150;etikabisnis&#150;2005.pdf.
If we amend the provisions of our code of ethics that applies to
our President Director, Finance Director and persons performing
similar functions, or if we grant any waiver of such provisions,
we will disclose such amendment or waiver on our company web
site at the same address.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='124'></A>
</DIV>

<!-- link1 "ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES" -->

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>ITEM 16C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PRINCIPAL ACCOUNTANT
FEES AND SERVICES</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table summarizes the aggregate fees billed to us
by KPMG, during the fiscal years ended December&nbsp;31, 2004
and 2005:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 9pt; ">

<TR style="font-size: 1pt;">
    <TD width="75%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Year Ended</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>(in Rp. million)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Audit Fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,274.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>42,390.3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Audit-Related Fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Tax Fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    All Other Fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Audit Fees</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Audit fees in the above table are the aggregate fees billed by
KPMG in 2004 and 2005, in each case in connection with the audit
of our annual consolidated financial statements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT style="white-space: nowrap">Audit-Related</FONT>
Fees</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
None.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tax Fees</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
KPMG did not perform any tax compliance, tax advisory or tax
planning services for TELKOM during the fiscal years ended
December&nbsp;31, 2004 and 2005.
</DIV>

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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>D.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All Other Fees</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
KPMG did not perform any other services for TELKOM during the
fiscal years ended December&nbsp;31, 2004 and 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>E.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Audit Committee
<FONT style="white-space: nowrap">Pre-Approval</FONT> Policies
and Procedures</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM has adopted
<FONT style="white-space: nowrap">pre-approval</FONT> policies
and procedures under which all
<FONT style="white-space: nowrap">non-audit</FONT> services
provided by its independent public accounting firm must be
<FONT style="white-space: nowrap">pre-approved</FONT> by
TELKOM&#146;s audit committee as set forth in the audit
committee&#146;s charter. Pursuant to the charter, permissible
<FONT style="white-space: nowrap">non-audit</FONT> services may
be performed by TELKOM&#146;s independent registered public
accounting firm provided that: (a)&nbsp;TELKOM&#146;s Board of
Directors must deliver to the Audit Committee (through the Board
of Commissioners) a detailed description of the
<FONT style="white-space: nowrap">non-audit</FONT> service that
is to be performed by the independent public accounting firm;
and (b)&nbsp;the Audit Committee will determine whether the
proposed <FONT style="white-space: nowrap">non-audit</FONT>
service will affect the independence of TELKOM&#146;s
independent public accounting firm or would give rise to any
conflict of interest.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Consistent with Section&nbsp;10(i)(1)(B) of the Exchange Act and
paragraph&nbsp;(c)(7)(i)(C) of
Rule&nbsp;<FONT style="white-space: nowrap">2-01</FONT> of
Regulation&nbsp;<FONT style="white-space: nowrap">S-X</FONT>
issued thereunder, the charter of TELKOM&#146;s audit committee
waives the <FONT style="white-space: nowrap">pre-approval</FONT>
requirement for permissible
<FONT style="white-space: nowrap">non-audit</FONT> services
(x)&nbsp;where the aggregate amount of the fees for such
<FONT style="white-space: nowrap">non-audit</FONT> services
constitutes no more than five percent of the total amount of
fees paid by TELKOM to its independent registered public
accounting firm during the fiscal year in which the services are
provided or (y)&nbsp;the proposed services are not regarded as
<FONT style="white-space: nowrap">non-audit</FONT> services at
the time the contract to perform the same is signed. In either
case, the performance of such
<FONT style="white-space: nowrap">non-audit</FONT> services must
subsequently be approved either by a member of the Audit
Committee who has been delegated
<FONT style="white-space: nowrap">pre-approval</FONT> authority
by the full Audit Committee or by the full Audit Committee
itself. Notwithstanding the foregoing, none of TELKOM&#146;s
independent public accounting firms performed
<FONT style="white-space: nowrap">non-audit</FONT> services for
TELKOM during the fiscal years ended December&nbsp;31, 2004 and
2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='125'></A>
</DIV>

<!-- link1 "ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES" -->

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>ITEM 16D.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EXEMPTIONS FROM THE
LISTING STANDARDS FOR AUDIT COMMITTEES</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In accordance with Indonesian law, the Company has a
<FONT style="white-space: nowrap">two-tier</FONT> board
structure, consisting of a Board of Commissioners and a Board of
Directors. The executive management functions are carried out by
the Board of Directors, while the principal statutory duties of
the Board of Commissioners are to supervise the policies of the
Board of Directors in the operation and management of the
Company and to give advice to the Board of Directors.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Jakarta Stock Exchange rules (the &#147;JSX Audit
Committee Rule&#148;), TELKOM&#146;s audit committee must
consist of at least three members, one of whom must be an
Independent Commissioner of TELKOM and concurrently the chairman
of the audit committee, while the other two members must be
external independent parties of whom at least one such party
shall have accounting and/or finance expertise. TELKOM&#146;s
audit committee is composed of seven members and is chaired by
an Independent Commissioner. Members of Telkom&#146;s audit
committee are appointed and dismissed by the Board of
Commissioners.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM relies on the general exemption under
Rule&nbsp;<FONT style="white-space: nowrap">10A-3(c)(3)</FONT>
of the Securities Exchange Act of 1934 with respect to the
composition of its audit committee. For further information on
the
Rule&nbsp;<FONT style="white-space: nowrap">10A-3(c)(3)</FONT>
exemption, see Item&nbsp;6. &#147;Directors, Senior Management
and Employees&nbsp;&#151; A.&nbsp;Directors and Senior
Management&nbsp;&#151; Board of Commissioners&#146;
Committees&#148; and Item&nbsp;10. &#147;Additional
Information&nbsp;&#151; B. Memorandum and articles of
association&nbsp;&#151; Committees&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TELKOM believes that its reliance on the exemption would not
materially adversely affect the ability of the audit committee
to act independently. TELKOM believes that the intent of the
provision in requiring that each member of the audit committee
to be a member of the board of directors or commissioners, as
applicable, and to be otherwise independent, is to ensure that
the audit committee is independent from influence by management
and would provide a forum separate from management in
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">187

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
which auditors and other interested parties can candidly discuss
concerns. The JSX Audit Committee Rule requires that each member
of the audit committee be independent. The JSX Audit Committee
Rule goes on to require that at least two of the members, the
external independent members, in effect be independent not only
of the management but also of the Board of Commissioners and
Board of Directors and the Company as a whole. TELKOM therefore
believes that the standard established by the JSX Audit
Committee Rule is at least equally effective in ensuring the
ability of the audit committee to act independently.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='126'></A>
</DIV>

<!-- link1 "ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS" -->

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="11%"></TD>
    <TD width="89%"></TD>
</TR>

<TR valign="top">
    <TD><B>ITEM 16E.</B></TD>
    <TD>
    <B>PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
    PURCHASERS</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Not applicable.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='127'></A>
</DIV>

<!-- link1 "PART III" -->

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>PART&nbsp;III</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='128'></A>
</DIV>

<!-- link1 "ITEM 17. CONSOLIDATED FINANCIAL STATEMENTS" -->

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>ITEM 17.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CONSOLIDATED FINANCIAL
STATEMENTS</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Not applicable.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='129'></A>
</DIV>

<!-- link1 "ITEM 18. CONSOLIDATED FINANCIAL STATEMENTS" -->

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>ITEM 18.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CONSOLIDATED FINANCIAL
STATEMENTS</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
See pages&nbsp;<FONT style="white-space: nowrap">F-1</FONT>
through <FONT style="white-space: nowrap">F-147.</FONT>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<A name='130'></A>
</DIV>

<!-- link1 "ITEM 19. EXHIBITS" -->

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>ITEM 19.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EXHIBITS</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Exhibit&nbsp;1&nbsp;&#151; The Articles of Incorporation of
TELKOM, amended as of July&nbsp;30, 2004, together with an
English translation thereof.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Exhibit&nbsp;2&nbsp;&#151; Not applicable.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Exhibit&nbsp;3&nbsp;&#151; Not applicable.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Exhibit&nbsp;4&nbsp;&#151; Material Contracts Exhibits:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="12%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="85%">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.1*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Settlement Agreement between TELKOM and the shareholders of
    AriaWest, dated July&nbsp;31, 2003.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.2*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Credit Agreement between TELKOM and the AriaWest lenders, dated
    July&nbsp;31, 2003.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.3*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    First Amendment to the Conditional Sale and Purchase Agreement
    between TELKOM and the shareholders of AriaWest, dated
    July&nbsp;31, 2003.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.4*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Conditional Sale and Purchase Agreement between TELKOM and the
    shareholders of AriaWest, dated May&nbsp;8, 2002.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.5*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Conditional Sale and Purchase Agreement between TELKOM and the
    shareholders of Pramindo, dated April&nbsp;19, 2002.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.6*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Cooperation Agreement on the Interconnection between
    TELKOM&#146;s Fixed Network and Indosat&#146;s Local Fixed
    Network and the Settlement of the Interconnection Financial
    Rights and Obligations between TELKOM and Indosat, dated
    September&nbsp;3, 2002, including an English translation thereof.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.7**</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Kontrak Pengadaan Satelit TELKOM-2 (Contract on Procurement of
    TELKOM-2 Satellite) between TELKOM and Orbital Sciences
    Corporation, dated October&nbsp;24, 2002.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.8+</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    First Amendment to Contract on Procurement of TELKOM-2 Satellite
    between TELKOM and Orbital Sciences Corporation, dated
    December&nbsp;15, 2003.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.9**</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Kontrak Jasa Peluncur Satelit TELKOM-2 (Agreement on Launch
    Services of TELKOM-2 Satellite) between TELKOM and Arianespace
    S.A., dated November&nbsp;8, 2002.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.10*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Master Procurement Partnership Agreement between TELKOM and a
    consortium led by Samsung Electronics, dated December&nbsp;23,
    2003.</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">188

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; ">

<TR style="font-size: 1pt;">
    <TD width="12%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="85%">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.11*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Amendment No.&nbsp;1 to the Master Procurement Partnership
    Agreement between TELKOM and a consortium led by Samsung
    Electronics, dated December&nbsp;31, 2003.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.12*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Service Level Agreement between TELKOM and a consortium led by
    Samsung Electronics, dated December&nbsp;23, 2002.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.13*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Loan Agreement between TELKOM and The Export-Import Bank of
    Korea, dated August&nbsp;27, 2003.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.14*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Master Procurement Partnership Agreement between TELKOM and a
    consortium led by Ericsson, dated December&nbsp;23, 2002.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.15*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Service Level Agreement between TELKOM and a consortium led by
    Ericsson, dated December&nbsp;23, 2002.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.16*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Master Procurement Partnership Agreement between TELKOM and
    PT&nbsp;Industri Telekomunikasi Indonesia (Persero), dated
    August&nbsp;26, 2003, including an English translation thereof.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.17*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Service Level Agreement between TELKOM and PT&nbsp;Industri
    Telekomunikasi Indonesia Tbk., dated August&nbsp;26, 2003.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.18*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Partnership Agreement for the Procurement and Construction of
    Backbone Transmission Network between TELKOM and a consortium
    led by Siemens AG, dated September&nbsp;24, 2003.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.19**</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Development Contract PSTN Excellence Regional Junction Divre-II
    between TELKOM and the Olex-Lucent-Brimbun consortium, dated
    February&nbsp;8, 2002.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.20+</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Co-Operation Agreement on Fixed Wireless CDMA Facilities
    Construction in KSO Divre VII Area between TELKOM and
    PT&nbsp;Bukaka SingTel International, dated January&nbsp;14,
    2003.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.21*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Amendment No.&nbsp;1 to the Development Contract PSTN Excellence
    Regional Junction Divre-II between TELKOM and the
    Olex-Lucent-Brimbun consortium, dated August&nbsp;22, 2002.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.22*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Amendment No.&nbsp;2 to the Development Contract PSTN Excellence
    Regional Junction Divre-II between TELKOM and the
    Olex-Lucent-Brimbun consortium, dated October&nbsp;25, 2002.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.23*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Amendment No.&nbsp;3 to the Development Contract PSTN Excellence
    Regional Junction Divre-II between TELKOM and the
    Olex-Lucent-Brimbun consortium, dated December&nbsp;20, 2002.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.24*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Amendment No.&nbsp;4 to the Development Contract PSTN Excellence
    Regional Junction Divre-II between TELKOM and the
    Olex-Lucent-Brimbun consortium, dated March&nbsp;20, 2003.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.25*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Amendment No.&nbsp;5 to the Development Contract PSTN Excellence
    Regional Junction Divre-II between TELKOM and the
    Olex-Lucent-Brimbun consortium, dated June&nbsp;26, 2003.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.26+</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Amendment No.&nbsp;6 to the Development Contract PSTN Excellence
    Regional Junction Divre-II between TELKOM and the
    Olex-Lucent-Brimbun consortium, dated October&nbsp;9, 2003.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.27+</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Amendment No.&nbsp;7 to the Development Contract PSTN Excellence
    Regional Junction Divre-II between TELKOM and the
    Olex-Lucent-Brimbun consortium, dated December&nbsp;4, 2003.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.28*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Master Procurement Partnership Agreement between TELKOM and
    Motorola, Inc., dated March&nbsp;24, 2003.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.29*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Partnership Agreement for Procurement and Construction of
    Regional Metro Junction and Optic Access Network for Regional
    Division III between TELKOM and PT&nbsp;Industri Telekomunikasi
    Indonesia (Persero), dated November&nbsp;12, 2003, including an
    English translation thereof.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.30*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Contract Agreement in connection with the Softswitch System
    Class-4 Procurement Program Through Buy or Return Scheme between
    TELKOM and the Santera-Olex consortium, dated December&nbsp;18,
    2003.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.31*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Side Letter to the Partnership Agreement for the Construction
    and Provision of the High Performance Backbone in Sumatera,
    dated June&nbsp;12, 2003.</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">189

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<P><HR noshade><P>
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<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; ">

<TR style="font-size: 1pt;">
    <TD width="12%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="85%">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.32*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Amendment No.&nbsp;1 to the Partnership Agreement for the
    Development of a PSTN Regional Junction for Regional Division V
    (East Java), dated September&nbsp;27, 2002.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.33*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Amendment No.&nbsp;2 to the Partnership Agreement for the
    Development of a PSTN Regional Junction for Regional Division V
    (East Java), dated December&nbsp;30, 2002.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.34+</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Amendment No.&nbsp;3 to the Partnership Agreement for the
    Development of a PSTN Regional Junction for Regional Division V
    (East Java), dated December&nbsp;11, 2003.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.35*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Supply Contract among TELKOM, NEC Corporation, the Communication
    Authority of Thailand and Singapore Telecommunications Limited,
    dated November&nbsp;27, 2002.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.36*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Amended and Restated KSO Agreement between TELKOM and
    PT&nbsp;Mitra Global Telekomunikasi Indonesia, dated
    January&nbsp;20, 2004.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.37*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Service Level Agreement between TELKOM and Motorola, Inc., dated
    March&nbsp;24, 2003.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.38*</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Indemnity Agreement between TELKOM and KAP Hans Tuanakotta
    Mustofa &#38; Halim (formerly KAP Hans Tuanakotta &#38;
    Mustofa), dated February&nbsp;9, 2004.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.39+</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Supply Contract for the Procurement and Installation of
    Dumai-Melaka Cable System among TELKOM, Telekom Malaysia Berhad
    and NEC Corporation, dated May&nbsp;14, 2004.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.40+</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Loan Agreement and Acknowledgement of Indebtedness between
    TELKOM and ABN AMRO Bank N.V. Jakarta Branch, dated
    January&nbsp;28, 2004.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.41+</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Letter Agreement between Indosat and TELKOM, dated
    December&nbsp;11, 2003 (with regard to the merger of
    PT&nbsp;Indonesian Satellite Corporation Tbk with
    PT&nbsp;Indosat Multi Media Mobile, PT&nbsp;Satelit Palapa
    Indonesia and PT&nbsp;Bimagraha Telekomindo), including an
    English translation thereof.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.42+</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Indemnity Agreement between TELKOM and KAP Hans Tuanakotta
    Mustofa &#38; Halim (formerly KAP Hans Tuanakotta &#38;
    Mustofa), dated June&nbsp;29, 2004.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.43++</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Medium Term Notes Issuance Agreement dated December&nbsp;13,
    2004 (English summary).</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.44++</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Indemnity Agreement between TELKOM and KAP Hans Tuanakotta
    Mustofa &#38; Halim (formerly KAP Hans Tuanakotta &#38;
    Mustofa), dated April&nbsp;25, 2005.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.45</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Supply Contract For The Procurement and Installation of Ring
    JASUKA Backbone between TELKOM and NEC-SIEMENS CONSORTIUM, dated
    June&nbsp;10, 2005.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.46</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Supply Contract For Capacity Expansion of Submarine Cable System
    Tanjung Pandan-Pontianak between TELKOM and NEC Corporation,
    dated July&nbsp;2005.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    *</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Filed with Amendment No.&nbsp;2 to the Annual Report of
    Form&nbsp;20-F/ A for the year ended December&nbsp;31, 2002
    filed February&nbsp;9, 2004 and incorporated herein by reference.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    **</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Filed with original Annual Report on Form&nbsp;20-F for the year
    ended December&nbsp;31, 2002 filed April&nbsp;17, 2003 and
    incorporated herein by reference.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    +</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Filed with original Annual Report on Form&nbsp;20-F for the year
    ended December&nbsp;31, 2003 filed June&nbsp;30, 2004 and
    incorporated herein by reference.</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    ++</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Filed with original Annual Report on Form&nbsp;20-F for the year
    ended December&nbsp;31, 2004 filed July&nbsp;15, 2005 and
    incorporated herein by reference.</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Exhibit&nbsp;5&nbsp;&#151; Not applicable.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Exhibit&nbsp;6&nbsp;&#151; Earnings per share is computed by
dividing net income by the weighted average number of shares
outstanding during the year, totaling 20,159,999,280 shares in
2003, 2004 and 2005. TELKOM does not have potentially dilutive
ordinary shares.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Exhibit&nbsp;7&nbsp;&#151; Not applicable.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">190
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<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Exhibit&nbsp;8&nbsp;&#151; List of subsidiaries as of
December&nbsp;31, 2005:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="50%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="27%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Name Under Which</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Subsidiary Conducts</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Name of Subsidiary</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Jurisdiction of Incorporation</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>its Business</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT&nbsp;AriaWest International</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Indonesia</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap><div align="left">AriaWest</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT&nbsp;Multimedia Nusantara</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Indonesia</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap><div align="left">Metra</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT&nbsp;Graha Sarana Duta</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Indonesia</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap><div align="left">GSD</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT&nbsp;Indonusa Telemedia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Indonesia</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap><div align="left">Indonusa</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT&nbsp;Dayamitra Telekomunikasi</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Indonesia</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap><div align="left">Mitratel</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT&nbsp;Telekomunikasi Selular</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Indonesia</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap><div align="left">Telkomsel</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT&nbsp;Napsindo Primatel Internasional</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Indonesia</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap><div align="left">Napsindo</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT&nbsp;Infomedia Nusantara</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Indonesia</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap><div align="left">Infomedia</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT&nbsp;Pramindo Ikat Nusantara</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Indonesia</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap><div align="left">Pramindo</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Exhibit&nbsp;9&nbsp;&#151; Not applicable.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Exhibit&nbsp;10&nbsp;&#151; Not applicable.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Exhibit&nbsp;11&nbsp;&#151; Not applicable. TELKOM intends to
comply with its obligation to disclose its code of ethics by
posting a copy of the code of ethics on its company web site at
<FONT style="white-space: nowrap">www.telkom-indonesia.com/english/hubunganinvestor/index.asp</FONT>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Exhibit&nbsp;12&nbsp;&#151; See Exhibits&nbsp;12.1 and 12.2
attached hereto.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Exhibit&nbsp;13&nbsp;&#151; See Exhibits&nbsp;13.1 and 13.2
attached hereto.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Exhibit&nbsp;14&nbsp;&#151; Not applicable.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">191
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<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>SIGNATURES</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to the requirements of Section&nbsp;12 of the
Securities Exchange Act of 1934, as amended, the Registrant
hereby certifies that it meets all of the requirements for
filing on Form&nbsp;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 23rd&nbsp;day of June, 2006.
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="38%"></TD>
    <TD width="62%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    PERUSAHAAN PERSEROAN (PERSERO)</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 48pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="38%"></TD>
    <TD width="2%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>By:&nbsp;</TD>
    <TD align="left">
    /s/ Arwin Rasyid</TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 3.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="38%"></TD>
    <TD width="62%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <DIV style="border-top: 1pt solid black; font-size: 1pt; margin-top: 2pt" align="left">&nbsp;</DIV></TD>
</TR>

<TR valign="top"  style="font-size: 10.0pt;color: #000000; background: #ffffff;">
    <TD>&nbsp;</TD>
    <TD align="left">
    ARWIN RASYID</TD>
</TR>

<TR valign="top"  style="font-size: 10.0pt;color: #000000; background: #ffffff;">
    <TD>&nbsp;</TD>
    <TD align="left">
    President Director</TD>
</TR>

<TR>
    <TD style="font-size: 12.0pt">&nbsp;</TD>
</TR>

<TR valign="top"  style="font-size: 10.0pt;color: #000000; background: #ffffff;">
    <TD>&nbsp;</TD>
    <TD align="left">
    Date: June&nbsp;23, 2006</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">192
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<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>TABLE OF CONTENTS</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="86%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Page</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Report of Independent Registered Public Accounting Firm</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>F-2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consolidated Financial Statements</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1. Consolidated Balance Sheets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>F-5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2. Consolidated Statements of Income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>F-7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    3. Consolidated Statements of Changes in Stockholders&#146;
    Equity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>F-8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4. Consolidated Statements of Cash Flows</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>F-11</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    5. Notes to Consolidated Financial Statements</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>F-13</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-1
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Report of Independent Registered Public Accounting Firm</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B><U>No.&nbsp;L.05&nbsp;&#151; 3737&nbsp;&#151; 06/US</U></B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>The Shareholders, Board of Commissioners and Board of
Directors</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia
Tbk.:</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
We have audited the consolidated balance sheets of Perusahaan
Perseroan (Persero) PT Telekomunikasi Indonesia Tbk. and
subsidiaries (the &#147;Company&#148;) as of December&nbsp;31,
2004 and 2005, and the related consolidated statements of
income, changes in stockholders&#146; equity, and cash flows for
each of the years in the three-year period ended
December&nbsp;31, 2005. These consolidated financial statements
are the responsibility of the Company&#146;s management. Our
responsibility is to express an opinion on these consolidated
financial statements based on our audits. We did not audit the
financial statements of PT Telekomunikasi Selular
(&#147;Telkomsel&#148;), a 65 percent-owned subsidiary, for the
year ended December 31, 2003, which financial statements reflect
total revenues constituting 40&nbsp;percent of the related
consolidated total. Those financial statements, which were
prepared on the basis of accounting principles generally
accepted in Indonesia, were audited by other auditors whose
report has been furnished to us, and our opinion, insofar as it
relates to the 2003 amounts included for Telkomsel, including
information relating to the nature and effect of differences
between accounting principles generally accepted in Indonesia
and accounting principles generally accepted in the United
States of America, is based solely on the report of the other
auditors.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States) and
auditing standards generally accepted in Indonesia. Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits and the
report of other auditors provide a reasonable basis for our
opinion.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
In our opinion, based on our audits and the report of other
auditors, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of Perusahaan Perseroan (Persero) PT Telekomunikasi
Indonesia Tbk. and subsidiaries as of December&nbsp;31, 2004 and
2005, and the results of their operations and their cash flows
for each of the years in the three-year period ended
December&nbsp;31, 2005, in conformity with accounting principles
generally accepted in Indonesia.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
As discussed in Note&nbsp;4 to the consolidated financial
statements, the Company adopted the provisions of PSAK No. 24
(Revised 2004), &#147;Employee Benefits,&#148; and PSAK
No.&nbsp;38 (Revised 2004), &#147;Accounting for Restructuring
Transactions between Entities under Common Control,&#148; in
2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
The consolidated financial statements as of and for the year
ended December&nbsp;31, 2004, have been restated to reflect the
adoption of PSAK No.&nbsp;24 (Revised 2004).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Accounting principles generally accepted in Indonesia vary in
certain significant respects from accounting principles
generally accepted in the United States of America. Information
relating to the nature and effect of such differences is
presented in Note 54 to the consolidated financial statements.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-2
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
The accompanying consolidated financial statements as of and for
the year ended December&nbsp;31, 2005, have been translated into
United States Dollars solely for the convenience of the reader.
We have audited the translation and, in our opinion, the
consolidated financial statements expressed in Indonesian Rupiah
have been translated into dollars on the basis as set forth in
Note&nbsp;3 to the consolidated financial statements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 30pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Kantor Akuntan Publik Siddharta Siddharta &#38; Widjaja <BR>
 Member Firm of KPMG International <BR>
 License No.: KEP-232/KM.6/2002 <BR>
 <BR>
 Lucas Kurniawan, BAP <BR>
 <I>Public Accountant License No.&nbsp;04.1.0934 <BR>
 </I>Jakarta-Indonesia, June&nbsp;8, 2006, except for
Note&nbsp;54, as to which the date is June&nbsp;16, 2006. <BR>
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-3
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<IMG src="u92750u9275001.gif" alt="(HARYANTO SAHARI &#38; REKAN LETTERHEAD)">
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>TO THE STOCKHOLDERS OF</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>PT&nbsp;TELEKOMUNIKASI SELULAR AND SUBSIDIARY</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
We have audited the accompanying consolidated statements of
income, changes in stockholders&#146; equity and cash flows of
PT&nbsp;Telekomunikasi Selular (the &#147;Company&#148;) and its
subsidiary (collectively the &#147;Group&#148;) for the year
ended December&nbsp;31, 2003. These consolidated financial
statements are the responsibility of the Group&#146;s
management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audit.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
We conducted our audit in accordance with auditing standards
established by the Indonesian Institute of Accountants and the
standards of the Public Company Accounting Oversight Board
(United States). These standards require that we plan and
perform the audit to obtain reasonable assurance that the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by the management, as well as
evaluating the overall presentation of the financial statements.
We believe that our audit provide a reasonable basis for our
opinion.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the
consolidated results of their operations, and consolidated cash
flows of the Group for the year ended December&nbsp;31, 2003, in
conformity with generally accepted accounting principles in
Indonesia.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Accounting principles generally accepted in Indonesia vary in
certain significant respects from accounting principles
generally accepted in the United States of America. Information
relating to the nature and effect of such differences is
presented in Notes&nbsp;34 and 35 to the consolidated financial
statements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
JAKARTA
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
April&nbsp;8, 2004
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 48pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>Drs. Irhoan Tanudiredja BAP</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
License of Public Accountant No. 99.1.0683
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-4
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>CONSOLIDATED BALANCE SHEETS</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>AS OF DECEMBER&nbsp;31, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah and
thousands of United States Dollars)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>ASSETS</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9.6pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="38%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Notes</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>US$ (Note&nbsp;3)</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(As restated)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    CURRENT ASSETS</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash and cash equivalents</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2c,2f,6,45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,856,123</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,374,684</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>546,763</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Temporary investments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2c,2g,45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,949</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,064</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,245</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Trade accounts receivable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2c,2h,7,45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Related parties&nbsp;&#151; net of allowance for doubtful
    accounts of Rp64,928&nbsp;million in 2004 and
    Rp84,275&nbsp;million in 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>419,104</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>530,370</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>53,954</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third parties&nbsp;&#151; net of allowance for doubtful accounts
    of Rp457,138&nbsp;million in 2004 and Rp601,393&nbsp;million in
    2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,899,999</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,047,539</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>310,024</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other accounts receivable&nbsp;&#151; net of allowance for
    doubtful accounts of Rp9,236&nbsp;million in 2004 and
    Rp4,402&nbsp;million in 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2c,2h,45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>55,769</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>153,247</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,589</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Inventories&nbsp;&#151; net of allowance for obsolescence of
    Rp54,733&nbsp;million in 2004 and Rp48,347&nbsp;million in 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2i,8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>203,085</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>220,327</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,413</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Prepaid expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2c,2j,9,45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>628,069</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>777,869</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>79,132</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Prepaid taxes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39a</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>77,228</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,913</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,924</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other current assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2c,10,45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44,608</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>159,537</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,230</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Current Assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,203,934</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,304,550</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,048,274</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="20">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    NON-CURRENT ASSETS</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term investments&nbsp;&#151; net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2g,11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82,613</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>101,400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,315</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Property, plant and equipment&nbsp;&#151; net of accumulated
    depreciation of Rp29,297,163&nbsp;million in 2004 and
    Rp37,092,663&nbsp;million in 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2k,2l,12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39,572,099</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>45,643,243</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,643,260</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Property, plant and equipment under revenue-sharing
    arrangements&nbsp;&#151; net of accumulated depreciation of
    Rp694,570&nbsp;million in 2004 and Rp458,234&nbsp;million in 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2m,13,48</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>499,127</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>549,405</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>55,891</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Prepaid pension benefit costs</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2q,42</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,362</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>640</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>65</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Advances and other non-current assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2c,14,45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,372,351</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>946,037</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>96,240</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Goodwill and other intangible assets&nbsp;&#151; net of
    accumulated amortization of Rp1,846,034&nbsp;million in 2004 and
    Rp2,764,187&nbsp;million in 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1c,2d,15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,411,425</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,493,272</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>457,098</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Escrow accounts</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>36,281</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>132,497</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,479</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Non-current Assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46,975,258</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>51,866,494</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,276,348</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    TOTAL ASSETS</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>56,179,192</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>62,171,044</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,324,622</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
See accompanying notes to consolidated financial statements,
which form an integral part of the consolidated financial
statements.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-5

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>CONSOLIDATED BALANCE SHEETS&nbsp;&#151; (Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>AS OF DECEMBER&nbsp;31, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah and
thousands of United States Dollars)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 10pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>LIABILITIES AND STOCKHOLDERS&#146; EQUITY</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="42%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Notes</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>US$ (Note&nbsp;3)</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(As restated)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    CURRENT LIABILITIES</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Trade accounts payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2c,17,45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Related parties</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>643,094</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,014,389</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>103,193</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third parties</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,611,456</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,281,285</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>435,533</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other accounts payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,073</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,677</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>679</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Taxes payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2r,39b</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,592,479</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,469,765</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>251,248</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dividends payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>62,689</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,276</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>333</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2c,18,45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,051,366</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,521,247</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>154,756</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unearned income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,030,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,592,718</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>162,026</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Advances from customers and suppliers</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>278,430</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>223,086</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,694</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Short-term bank loans</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2c,20,45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,101,633</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>173,800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,681</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current maturities of long-term liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2c,21,45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,300,822</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,226,925</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>226,544</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Current Liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,677,042</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,513,168</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,374,687</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    NON-CURRENT LIABILITIES</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred tax liabilities&nbsp;&#151; net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2r,39e</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,927,567</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,391,810</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>243,317</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unearned income on revenue-sharing arrangements</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2m,13,48</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>360,332</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>425,484</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>43,284</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unearned initial investor payments under joint operation scheme</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2n,47</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,453</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,311</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>744</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued long service awards</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2c,2q,43,45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>449,841</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>524,524</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>53,360</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued post-retirement health care benefits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2c,2q,44,45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,983,707</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,048,021</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>310,073</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued pension and other post-retirement benefit costs</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>42</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,479,918</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,330,664</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>135,368</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term liabilities&nbsp;&#151; net of current maturities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Two-step loans&nbsp;&#151; related party</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2c,22,45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,363,283</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,760,199</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>484,252</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Notes and bonds</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,331,465</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,456,669</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>148,186</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank loans</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2c,24,45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,775,799</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,752,104</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>178,240</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Liabilities of business acquisitions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,743,317</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,127,959</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>318,205</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Obligations under capital leases</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2l,12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>235,537</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23,961</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Non-current Liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,435,682</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,060,282</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,938,990</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    MINORITY INTEREST</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,938,432</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,305,193</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>641,423</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    STOCKHOLDERS&#146; EQUITY</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capital stock&nbsp;&#151; Rp250&nbsp;par value per Series&nbsp;A</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dwiwarna share and Series&nbsp;B share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Authorized&nbsp;&#151; one Series&nbsp;A Dwiwarna share and
    79,999,999,999 Series&nbsp;B shares</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Issued and fully paid&nbsp;&#151; one Series&nbsp;A Dwiwarna
    share and 20,159,999,279 Series&nbsp;B shares</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1b,27</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,040,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,040,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>512,716</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Additional paid-in capital</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,073,333</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,073,333</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>109,190</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Difference in value of restructuring transactions between
    entities under common control</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,288,271</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>90,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,156</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Difference due to change of equity in associated companies</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2g</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>385,595</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>385,595</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39,226</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unrealized holding gain (loss) on available-for-sale securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2g</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>884</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(748</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(76</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Translation adjustment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2g</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>229,595</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>233,253</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23,729</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Retained earnings</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Appropriated</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,680,813</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,803,397</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>183,458</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unappropriated</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,006,087</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,667,571</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,492,123</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Stockholders&#146; Equity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,128,036</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23,292,401</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,369,522</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    TOTAL LIABILITIES AND STOCKHOLDERS&#146; EQUITY</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>56,179,192</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>62,171,044</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,324,622</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
See accompanying notes to consolidated financial statements,
which form an integral part of the consolidated financial
statements.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-6

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>CONSOLIDATED STATEMENTS OF INCOME</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>FOR THE YEARS ENDED DECEMBER&nbsp;31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah and
thousands of United States Dollars, except per share and per ADS
data)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Notes</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>US$ (Note&nbsp;3)</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(As restated)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    OPERATING REVENUES</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Telephone</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2p,30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fixed lines</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,896,865</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,645,021</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,781,252</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,096,770</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cellular</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,458,830</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,421,298</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,570,958</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,482,295</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interconnection</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2p,31,45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,162,148</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,187,981</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,742,084</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>787,598</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Joint operation schemes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2n,32,47</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,486,307</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>656,614</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>588,647</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>59,883</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Data and Internet</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,108,562</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,808,742</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,934,324</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>705,425</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Network</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>517,865</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>654,309</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>586,636</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>59,678</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenue-sharing arrangements</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2m,35,48</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>258,464</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>280,576</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>302,282</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30,751</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other telecommunications services</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>226,882</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>293,225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>301,001</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30,620</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Operating Revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27,115,923</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,947,766</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41,807,184</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,253,020</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    OPERATING EXPENSES</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Personnel</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>36</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,440,096</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,909,965</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,563,047</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>667,655</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2k,2l,2m,12,13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,779,520</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,438,557</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,570,739</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>770,167</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Write-down of assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2k,12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>616,768</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>62,743</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss on procurement commitments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>79,359</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,073</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operations, maintenance and telecommunication services</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,338,693</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,529,587</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,916,341</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>601,866</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    General and administrative</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,078,777</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,599,847</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,763,951</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>281,175</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Marketing</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>502,898</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>881,930</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,126,229</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>114,571</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Operating Expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,139,984</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,359,886</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,636,434</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,506,250</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    OPERATING INCOME</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,975,939</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,587,880</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,170,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,746,770</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    OTHER INCOME (EXPENSES)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>366,024</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>317,941</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>344,686</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35,065</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,383,446</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,270,136</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,177,268</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(119,763</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Gain (loss) on foreign exchange&nbsp;&#151; net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2e</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>126,121</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,220,760</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(516,807</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(52,574</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity in net income of associated companies</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2g,11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,819</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,420</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,879</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,107</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Others&nbsp;&#151; net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>364,338</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>331,050</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>409,184</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41,626</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other income (expenses)&nbsp;&#151; net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(524,144</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,838,485</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(929,326</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(94,539</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    INCOME BEFORE TAX</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,451,795</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,749,395</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,241,424</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,652,231</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    TAX EXPENSE</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2r,39c</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current tax</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,791,280</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,267,111</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,719,644</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(581,856</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred tax</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(69,810</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>88,585</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>535,757</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>54,502</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4"><FONT style="font-size: 9pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,861,090</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,178,526</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,183,887</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(527,354</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    INCOME BEFORE MINORITY INTEREST IN NET INCOME OF SUBSIDIARIES</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,590,705</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,570,869</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,057,537</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,124,877</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    MINORITY INTEREST IN NET INCOME OF SUBSIDIARIES, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,503,478</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,956,301</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,063,971</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(311,696</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    NET INCOME</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,087,227</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,614,568</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,993,566</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>813,181</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    BASIC EARNINGS PER SHARE</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2s,40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income per share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>301.95</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>328.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>396.51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.04</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    Net income per ADS<BR>
    (40 Series&nbsp;B shares per ADS)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,077.83</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,124.14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,860.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.61</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
See accompanying notes to consolidated financial statements,
which form an integral part of the consolidated financial
statements.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-7

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS&#146;
EQUITY</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>FOR THE YEARS ENDED DECEMBER&nbsp;31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah and
thousands of United States Dollars)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Difference in</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Value of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Restructuring</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Difference</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Transactions</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Due to Change</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Additional</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Between Entities</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>of Equity in</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Retained Earnings</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Capital</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Paid-in</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Under Common</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Associated</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Translation</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Stockholders&#146;</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2" align="left" nowrap><B>Description</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Notes</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Stock</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Capital</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Control</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Companies</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Adjustment</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Appropriated</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Unappropriated</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Equity</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Balance as of January&nbsp;1, 2003</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,040,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,073,333</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,288,271</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>424,020</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>235,665</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>745,404</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,383,466</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,613,617</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Reclassification to the statement of income as a result of
    disposal of investment in Metrosel</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(38,425</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(38,425</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign currency translation of CSM</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2g</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11,433</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11,433</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Resolved during the Annual General Meeting of the Stockholders
    on May&nbsp;9, 2003<BR>
    Declaration of cash dividends</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,338,109</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,338,109</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Appropriation for general reserve</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>813,664</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(813,664</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income for the year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,087,227</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,087,227</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Balance as of December&nbsp;31, 2003</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,040,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,073,333</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,288,271</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>385,595</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>224,232</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,559,068</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,318,920</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,312,877</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
See accompanying notes to consolidated financial statements,
which form an integral part of the consolidated financial
statements.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-8

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS&#146;
EQUITY&nbsp;&#151; (Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>FOR THE YEARS ENDED DECEMBER&nbsp;31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah and
thousands of United States Dollars)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Difference in</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Value of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Restructuring</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Difference</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Transactions</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Due to Change</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Unrealized</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Additional</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Between Entities</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>of Equity in</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Holding Gain on</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Retained Earnings</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Capital</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Paid-in</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Under Common</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Associated</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Available-for-Sale</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Translation</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Stockholders&#146;</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2" align="left" nowrap><B>Description</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Notes</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Stock</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Capital</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Control</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Companies</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Securities</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Adjustment</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Appropriated</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Unappropriated</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Equity</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Balance as of January&nbsp;1, 2004</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,040,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,073,333</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,288,271</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>385,595</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>224,232</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,559,068</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,318,920</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,312,877</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cumulative effect due to change in method of accounting for
    employee benefits, net of tax effect of Rp600,059&nbsp;million</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2q,4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,618,665</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,618,665</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Balance as of January&nbsp;1, 2004, as restated</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,040,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,073,333</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,288,271</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>385,595</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>224,232</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,559,068</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,700,255</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,694,212</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unrealized holding gain on available- for-sale securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2g</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>884</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>884</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign currency translation of CSM</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2g,11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,363</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,363</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Resolved during the Annual General Meeting of the Stockholders
    on July&nbsp;30, 2004 Declaration of cash dividends</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,043,614</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,043,614</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Appropriation for general reserve</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>121,745</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(121,745</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Declaration of interim cash dividends</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(143,377</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(143,377</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income for the year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,614,568</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,614,568</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Balance as of December&nbsp;31, 2004, as restated</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,040,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,073,333</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,288,271</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>385,595</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>884</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>229,595</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,680,813</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,006,087</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,128,036</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
See accompanying notes to consolidated financial statements,
which form an integral part of the consolidated financial
statements.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-9

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS&#146;
EQUITY&nbsp;&#151; (Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>FOR THE YEARS ENDED DECEMBER&nbsp;31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah and
thousands of United States Dollars)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="-1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Difference in</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Value of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Restructuring</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Difference</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Unrealized</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Transactions</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Due to</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Holding Gain</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Between Entities</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Change of Equity</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Loss) on</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Retained Earnings</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Capital</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Additional</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Under Common</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>in Associated</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Available-for-Sale</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Translation</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Stockholders&#146;</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2" align="left" nowrap><B>Description</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Notes</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Stock</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Paid-in Capital</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Control</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Companies</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Securities</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Adjustment</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Appropriated</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Unappropriated</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Equity</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Balance as of January&nbsp;1, 2005, as restated</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,040,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,073,333</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,288,271</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>385,595</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>884</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>229,595</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,680,813</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,006,087</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,128,036</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Change in method of accounting for restructuring transactions
    between entities under common control</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,288,271</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,288,271</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unrealized holding loss on available- for-sale securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2g</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,632</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,632</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign currency translation of CSM</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2g,11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,658</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,658</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Compensation for early termination of exclusive rights</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>90,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>90,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Resolved during the Annual General Meeting of the Stockholders
    on June&nbsp;24, 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Declaration of cash dividends</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,921,227</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,921,227</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Appropriation for general reserve</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>122,584</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(122,584</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income for the year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,993,566</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,993,566</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Balance as of December&nbsp;31, 2005</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,040,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,073,333</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>90,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>385,595</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(748</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>233,253</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,803,397</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,667,571</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23,292,401</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
See accompanying notes to consolidated financial statements,
which form an integral part of the consolidated financial
statements.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-10

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>CONSOLIDATED STATEMENTS OF CASH FLOWS</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>FOR THE YEARS ENDED DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah and
thousands of United States Dollars)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9.5pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="39%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 7.0pt;">
    <TD colspan="5">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="5">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="5">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>US$ (Note 3)</B></TD><TD></TD>
</TR>


<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="5" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    CASH FLOWS FROM OPERATING ACTIVITIES</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash receipts from operating revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Telephone</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fixed lines</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,201,928</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,084,558</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,668,915</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,085,342</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cellular</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,925,503</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,497,763</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,825,437</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,508,183</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interconnection&nbsp;&#151; net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,203,802</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,766,444</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,403,322</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>753,136</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Joint operation schemes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,195,563</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>547,487</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>614,652</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>62,528</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Data and Internet</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,213,391</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,973,559</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,952,323</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>707,256</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other services</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,718,693</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,689,941</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,445,668</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>147,067</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="5">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total cash receipts from operating revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,458,880</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,559,752</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41,910,317</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,263,512</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash payments for operating expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,861,797</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(12,270,643</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(14,954,742</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,521,337</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="5">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="5" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash generated from operations</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,597,083</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,289,109</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,955,575</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,742,175</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="5">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest received</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>369,982</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>321,677</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>341,848</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,776</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income tax paid</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,905,317</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,132,359</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,938,916</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(502,433</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest paid</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,178,332</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,348,919</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,200,484</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(122,125</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash refund to customers and advances</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(30,884</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(78,028</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(55,343</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,630</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="5">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="5" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net Cash Provided by Operating Activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,852,532</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,051,480</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,102,680</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,146,763</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="5">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="5" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    CASH FLOWS FROM INVESTING ACTIVITIES</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Proceeds from sale of temporary investments and maturity of time
    deposits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,895,199</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>285,264</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>227,633</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23,157</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Purchase of temporary investments and placements in time deposits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(679,500</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(404,268</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(226,054</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(22,996</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Proceeds from sale of property, plant and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>255,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>67,196</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>84,621</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,608</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Proceeds from insurance claim</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27,580</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,806</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Acquisition of property, plant and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(9,007,186</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,568,862</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(12,106,930</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,231,631</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Payment of advances for the purchase of property,plant and
    equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,063,382</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(212,187</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(21,586</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Decrease in advances and others</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>96,830</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>123,026</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>874</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>89</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Acquisition of businesses, net of cash acquired</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>141,985</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(27,797</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,000</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(407</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Payments of advances for investments in shares of stock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(14,338</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Acquisition of long-term investments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(9,290</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,250</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(432</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Sale of long-term investments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,398</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="5">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="5" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net Cash Used in Investing Activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,305,862</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(9,598,113</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(12,212,713</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,242,392</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="5">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="5" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    CASH FLOWS FROM FINANCING ACTIVITIES</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash dividends paid</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,336,582</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,129,225</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,980,640</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(303,219</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash dividends paid to minority shareholders of subsidiaries</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(402,004</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(682,366</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,694,261</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(172,356</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Increase in escrow accounts</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,497,462</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,341,546</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(96,216</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(9,788</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Proceeds from (repayments of) short-term borrowings</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(39,205</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,062,183</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(994,709</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(101,191</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Payments for debt issuance cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,394</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Proceeds from Medium-term Notes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,080,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Repayments of Medium-term Notes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(470,000</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(47,813</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Redemption of Telkomsel&#146;s notes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(160,509</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(504,101</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(780,565</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(79,406</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Proceeds from long-term borrowings</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>720,591</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,386,748</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>569,995</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>57,985</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Repayments of long-term borrowings</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,222,424</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,734,156</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,723,126</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(175,293</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Repayments of promissory notes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(239,821</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(40,008</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(164,186</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(16,703</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Repayments of obligations under capital leases</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,643</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(574</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="5">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="5" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net Cash Used in Financing Activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,177,416</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,904,865</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,339,351</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(848,358</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="5">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-11

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>CONSOLIDATED STATEMENTS OF CASH FLOWS&nbsp;&#151;
(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>FOR THE YEARS ENDED DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah and
thousands of United States Dollars)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9.5pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>US$ (Note 3)</B></TD><TD></TD>
</TR>


<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    NET (DECREASE)&nbsp;INCREASE IN CASH AND CASH EQUIVALENTS</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(630,746</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(451,498</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>550,616</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>56,013</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,148</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>213,149</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(32,055</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,261</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,699,070</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,094,472</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,856,123</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>494,011</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    CASH AND CASH EQUIVALENTS AT END OF YEAR</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,094,472</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,856,123</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,374,684</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>546,763</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>SUPPLEMENTAL CASH FLOW INFORMATION</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Noncash investing and financing activities:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Increase in property under construction through the incurrence
    of long-term debt</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>536,248</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Payment of insurance premium through the incurrence of long-term
    debt</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>81,186</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,658</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Conversion of receivables to long-term investments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Acquisition of subsidiary through the issuance of Promissory
    Notes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>927,273</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Acquisition of minority interest through the issuance of
    Promissory Notes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>126,692</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Acquisition of business through the incurrence of long-term
    liability</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,257,566</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Acquisition of property, plant and equipment through capital
    leases</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>257,380</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,183</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 21pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
See accompanying notes to consolidated financial statements,
which form an integral part of the consolidated financial
statements.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-12

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>1.&nbsp;</B></TD>
    <TD>
    <B>GENERAL</B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>a.&nbsp;<U>Establishment and General Information</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Perusahaan Perseroan (Persero) P.T.&nbsp;Telekomunikasi
Indonesia Tbk (the &#147;Company&#148;) was originally part of
&#147;Post en Telegraafdienst&#148;, which was established in
1884 under the framework of Decree No.&nbsp;7 dated
March&nbsp;27, 1884 of the Governor General of the Dutch Indies
and published in State Gazette No.&nbsp;52 dated April&nbsp;3,
1884.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 1991, based on Government
Regulation&nbsp;No.&nbsp;25&nbsp;year 1991, the status of the
Company was changed into a state-owned limited liability
corporation (&#147;Persero&#148;). The Company was established
based on notarial deed No.&nbsp;128 dated September&nbsp;24,
1991 of Imas Fatimah, S.H. The deed of establishment was
approved by the Minister of Justice of the Republic of Indonesia
in his decision letter No.&nbsp;C2-6870.HT.01.01.Th.1991 dated
November&nbsp;19, 1991, and was published in State Gazette of
the Republic of Indonesia No.&nbsp;210 dated January&nbsp;17,
1992, Supplement No.&nbsp;5. The articles of association have
been amended several times, the most recent amendment was made
through deed No.&nbsp;4 dated April&nbsp;6, 2006, of Notary A.
Partomuan Pohan, S.H., LLM., among others, to amend the
directors&#146; authorities and responsibilities.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In accordance with article 3 of its articles of association, the
scope of the Company&#146;s activities is as follows:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    1.&nbsp;The Company&#146;s objective is to provide
    telecommunications and information facilities and services, in
    accordance with prevailing regulations.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    2.&nbsp;To achieve the above objective, the Company is involved
    in the following activities:</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    i.&nbsp;Planning, building, providing, developing, operating,
    marketing or selling, leasing and maintaining telecommunications
    and information networks in accordance with prevailing
    regulations.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    ii.&nbsp;Planning, developing, providing, marketing or selling
    and improving telecommunications and information services in
    accordance with prevailing regulations.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    iii.&nbsp;Performing activities and other undertakings in
    connection with the utilization and development of the
    Company&#146;s resources and optimizing the utilization of the
    Company&#146;s property, plant and equipment, information
    systems, education and training, and repairs and maintenance
    facilities.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;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,
in 1995, the Company entered into agreements with investors to
develop, manage and operate telecommunications facilities in
five of the Company&#146;s seven regional divisions under Joint
Operation Schemes (known as &#147;Kerja Sama Operasi&#148; or
&#147;KSO&#148;).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s head office is located at Jalan Japati
No.&nbsp;1, Bandung, West Java.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to Law No.&nbsp;3/1989 on Telecommunications which took
effect on April&nbsp;1, 1989, Indonesian legal entities are
allowed to provide basic telecommunications services in
cooperation with
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-13

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
the Company as the domestic telecommunications organizing body
(or &#147;badan penyelenggara&#148;). Government
Regulation&nbsp;No.&nbsp;8/1993, concerning the provision of
telecommunications services, further regulates that cooperation
to provide basic telecommunications services can be in the form
of joint venture, joint operation or contract management and
that the entities cooperating with the domestic
telecommunications organizing body must use the organizing
body&#146;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.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Minister of Tourism, Post and Telecommunications of the
Republic of Indonesia (&#147;MTPT&#148;), through two decision
letters both dated August&nbsp;14, 1995, reaffirmed the status
of the Company as the organizing body for the provision of
domestic telecommunications services.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Further, effective from January&nbsp;1, 1996, the Company was
granted the exclusive right to provide local wireline and fixed
wireless services for a minimum period of 15&nbsp;years and the
exclusive right to provide domestic long-distance
telecommunications services for a minimum period of
10&nbsp;years. The exclusive rights also apply to
telecommunications services provided for and on behalf of the
Company through a KSO. This grant of rights does not affect the
Company&#146;s right to provide other domestic
telecommunications services.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Law No.&nbsp;36/1999 on Telecommunications, which took
effect from September 2000, telecommunications activities cover:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    i.&nbsp;Telecommunications networks</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    ii.&nbsp;Telecommunications services</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    iii.&nbsp;Special telecommunications</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
National state-owned companies, regional state-owned companies,
privately-owned companies and cooperatives are allowed to
provide telecommunications networks and services. Special
telecommunications can be provided by individuals, government
agencies and legal entities other than telecommunications
networks and service providers.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Law No.&nbsp;36/1999, activities that result in
monopolistic practices and unfair competition are prohibited. In
connection with this law, Government
Regulation&nbsp;No.&nbsp;52/2000 was issued, which provides that
interconnection fees shall be charged to originating
telecommunications network operators where telecommunications
service is provided by two or more telecommunications network
operators.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Based on press release No.&nbsp;05/ HMS/ JP/ VIII/2000 dated
August&nbsp;1, 2000 from the Director General of Post and
Telecommunications and the correction thereto No.&nbsp;1718/ UM/
VIII/2000 dated August&nbsp;2, 2000, the period of exclusive
rights granted to the Company to provide local and domestic
long-distance fixed-line telecommunications services, which
initially would expire in December 2010 and December 2005,
respectively, was shortened to expire in August 2002 and August
2003, respectively. In return, the Government is required to pay
compensation to the Company (Note&nbsp;29).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Based on a press release from the Coordinating Minister of
Economics dated July&nbsp;31, 2002, the Government decided to
terminate the Company&#146;s exclusive rights as a network
provider for local and long-distance services with effect from
August&nbsp;1, 2002. On August&nbsp;1, 2002, PT Indonesian
Satellite
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-14

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Corporation Tbk (&#147;Indosat&#148;) was granted a license to
provide local and long-distance telecommunications services.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On May&nbsp;13, 2004, pursuant to the Ministry of Communications
Decree No. KP. 162/2004, the Company was granted a commercial
license to provide International Direct Dialing
(IDD)&nbsp;services.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Based on the resolution of the Extraordinary General Meeting of
Stockholders, the minutes of which have been notarized by deed
No.&nbsp;4 dated March&nbsp;10, 2004 of A. Partomuan Pohan,
S.H., LLM., the composition of the Company&#146;s Board of
Commissioners and Board of Directors as of December&nbsp;31,
2004 was as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="65%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="24%">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    President Commissioner</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>:</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Tanri Abeng</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Commissioner</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>:</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Anggito Abimanyu</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Commissioner</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>:</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Gatot Trihargo</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Independent Commissioner</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>:</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Arif Arryman</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Independent Commissioner</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>:</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Petrus Sartono</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    President Director</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>:</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Kristiono</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Director of Finance</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>:</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Rinaldi Firmansyah</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Director of Telecommunications Service Business</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>:</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Suryatin Setiawan</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Director of Human Resources and Support Business</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>:</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Woeryanto Soeradji</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Director of Telecommunications Network Business</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>:</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Abdul Haris</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Based on the resolution of the Annual General Meeting of
Stockholders, the minutes of which have been summarized by deed
No.&nbsp;36 dated June&nbsp;24, 2005 of A. Partomuan Pohan,
S.H., LLM., the composition of the Company&#146;s Board of
Commissioners and Board of Directors as of December&nbsp;31,
2005 was as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="65%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="24%">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    President Commissioner</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>:</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Tanri Abeng</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Commissioner</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>:</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Anggito Abimanyu</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Commissioner</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>:</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Gatot Trihargo</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Independent Commissioner</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>:</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Arif Arryman</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Independent Commissioner</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>:</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Petrus Sartono</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    President Director</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>:</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Arwin Rasyid</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Vice President Director/ Chief Operating Officer</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>:</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Garuda Sugardo</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Director of Finance</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>:</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Rinaldi Firmansyah</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Director of Network and Solution</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>:</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Abdul Haris</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Director of Enterprise and Wholesale</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>:</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Arief Yahya</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Director of Human Resources</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>:</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    John Welly</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Director of Consumer</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>:</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Guntur Siregar</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2004 and 2005, the Company had 29,375
employees and 28,179 employees, respectively, while the
subsidiaries had 5,282 employees and 5,825 employees,
respectively.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>b. <U>Public offering of shares of the Company</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s total number of shares immediately prior to
its initial public offering was 8,400,000,000, which consisted
of 8,399,999,999 Series&nbsp;B shares and 1 Series&nbsp;A
Dwiwarna share, all of which were owned by the Government of the
Republic of Indonesia (the &#147;Government&#148;). On
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-15

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
November&nbsp;14, 1995, the Government sold the Company&#146;s
shares through an initial public offering on the Jakarta Stock
Exchange and Surabaya Stock Exchange. The shares offered
consisted of 933,333,000 new Series&nbsp;B shares and
233,334,000 Series&nbsp;B shares owned by the Government. A
share offering was also conducted on the New York Stock Exchange
and London Stock Exchange for 700,000,000 Series&nbsp;B shares
owned by the Government, which were converted into 35,000,000
American Depositary Shares (ADS). Each ADS represented 20
Series&nbsp;B shares at that time.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In December 1996, the Government completed a block sale of
388,000,000 Series&nbsp;B shares, and later in 1997, distributed
2,670,300 Series&nbsp;B shares as an incentive to stockholders
who did not sell their shares within one year from the date of
the initial public offering. In May 1999, the Government sold
898,000,000 Series&nbsp;B shares.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Law No.&nbsp;1/1995 on Limited Liability Companies, the
minimum total par value of the Company&#146;s issued shares of
capital stock must be at least 25% of the total par value of the
Company&#146;s authorized capital stock, or in the
Company&#146;s case Rp5,000,000&nbsp;million. To comply with the
Law, it was resolved at the Annual General Meeting of
Stockholders on April&nbsp;16, 1999 to increase the issued share
capital by way of capitalization of certain additional paid-in
capital. The bonus shares were distributed to the then existing
stockholders in August 1999.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In December 2001, the Government conducted another block sale of
1,200,000,000&nbsp;shares or 11.9% of the total outstanding
Series&nbsp;B shares. In July 2002, the Government sold
312,000,000&nbsp;shares or 3.1% of the total outstanding
Series&nbsp;B shares.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On July&nbsp;30, 2004, the Annual General Meeting of
Stockholders, the minutes of which were notarized by deed
No.&nbsp;26 dated July&nbsp;30, 2004 of A. Partomuan Pohan,
S.H., LLM., resolved to decrease the par value of the
Company&#146;s shares from Rp500 to Rp250 by means of a
<FONT style="white-space: nowrap">2-for-1</FONT> stock split.
The Series&nbsp;A Dwiwarna share with par value of Rp500 was
split to one Series&nbsp;A Dwiwarna share with par value of
Rp250 and one Series&nbsp;B share with par value of Rp250. As a
result of the stock split, the Company&#146;s authorized capital
stock increased from one Series&nbsp;A Dwiwarna share and
39,999,999,999 Series&nbsp;B shares to one Series&nbsp;A
Dwiwarna share and 79,999,999,999 Series&nbsp;B shares, and the
Company&#146;s issued capital stock increased from one
Series&nbsp;A Dwiwarna share and 10,079,999,639 Series&nbsp;B
shares to one Series&nbsp;A Dwiwarna share and 20,159,999,279
Series&nbsp;B shares. After the stock split, each ADS
represented 40 Series&nbsp;B shares.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Based on the resolution of the Extraordinary General Meeting of
Stockholders on December&nbsp;21, 2005, the Stockholders
authorized the plan to repurchase up to a maximum of 5% of the
Company&#146;s issued and outstanding Series&nbsp;B shares for a
total repurchase amount not exceeding Rp5,250,000&nbsp;million.
As of June&nbsp;2, 2006, the Company has repurchased
8,373,500&nbsp;shares of the Company&#146;s issued and
outstanding Series&nbsp;B shares, representing less than 0.05%
of the Company&#146;s issued and outstanding Series&nbsp;B
shares, for a total repurchase amount of Rp61,4&nbsp;billion
(US$6.2&nbsp;million).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, all of the Company&#146;s
Series&nbsp;B shares were listed on the Jakarta Stock Exchange
and Surabaya Stock Exchange and 37,414,543 ADS shares were
outstanding on either the New York Stock Exchange or London
Stock Exchange.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-16

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.&nbsp;<U>Subsidiaries</U></I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company consolidates the following subsidiaries as a result
of majority ownership or its right to control operations.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="24%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="19%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Percentage of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Total Assets Before</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Ownership</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Start of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Eliminations</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Commercial</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD align="left" nowrap><B>Subsidiaries</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Domicile</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Nature of Business</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Operations</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT Pramindo Ikat Nusantara</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>Medan</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Telecommunications</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1995</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,604,405</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,356,634</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    construction&nbsp;&#38; services</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT AriaWest International</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>Bandung</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Telecommunications</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1995</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,416,225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,127,772</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT Multimedia Nusantara</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>Jakarta</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Pay TV</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1998</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,116</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>53,738</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT Graha Sarana Duta</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>Jakarta</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Real estate, construction</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1982</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>69,227</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>101,910</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    and services</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT Dayamitra Telekomunikasi</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>Balikpapan</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Telecommunications</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1995</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>641,249</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>622,662</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT Indonusa Telemedia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>Jakarta</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Multimedia</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>96</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1997</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>72,080</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>66,445</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT Telekomunikasi Selular</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>Jakarta</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Telecommunications</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1995</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,557,557</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,754,321</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT Napsindo Primatel Internasional</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>Jakarta</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Telecommunications</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1999</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28,974</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,884</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT Infomedia Nusantara</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>Jakarta</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Data and information</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1984</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>333,738</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>376,160</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    service</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT Pro Infokom Indonesia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>Jakarta</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    System information</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,261</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    network</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has indirect investments through its subsidiaries in
the following companies:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="31%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Ownership</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Percentage</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Start of</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Nature of</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Commercial</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Indirect Subsidiaries</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Stockholders</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Domicile</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Business</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Operations</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Telekomunikasi Selular Finance Limited</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    PT Telekomunikasi</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Mauritius</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Fund raising</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2002</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Selular</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Telkomsel Finance B.V</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    PT Telekomunikasi</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Netherlands</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Finance</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2005</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Selular</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Aria West International Finance B.V</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    PT AriaWest</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Netherlands</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Finance</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1996</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    International</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT Balebat Dedikasi Prima</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    PT Infomedia</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Bogor</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Printing</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Nusantara</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-17

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>PT Pramindo Ikat Nusantara (&#147;Pramindo&#148;)</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pramindo is the investor in KSO&nbsp;I, the joint operating
scheme that provides telecommunications services in Sumatra. On
April&nbsp;19, 2002, the Company entered into a Conditional Sale
and Purchase Agreement (&#147;CSPA&#148;) (as amended on
August&nbsp;1, 2002) to acquire 100% of the issued and
<FONT style="white-space: nowrap">paid-up</FONT> share capital
of Pramindo. The Company acquired control of Pramindo on
August&nbsp;15, 2002, the date when the Company entered into a
Stockholders Voting Agreement pursuant to which the Company
obtained the right to vote all Pramindo&#146;s shares and the
right to nominate all the members of the Board of Directors and
Board of Commissioners of Pramindo (Note&nbsp;5b).
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>PT AriaWest International (&#147;AWI&#148;)</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
AWI is the investor in KSO&nbsp;III, the joint operating scheme
that provides telecommunication services in West Java. On
May&nbsp;8, 2002, the Company entered into a Conditional Sale
and Purchase Agreement (&#147;CSPA&#148;) to acquire 100% of the
issued and <FONT style="white-space: nowrap">paid-up</FONT>
capital of AWI. The acquisition was effective on July&nbsp;31,
2003, the date when the Company entered into the First Amendment
to the Conditional Sale and Purchase Agreement with the
stockholders of AWI in which both parties agreed to the
Company&#146;s acquisition of AWI (Note&nbsp;5c).
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>PT Multimedia Nusantara (&#147;Metra&#148;)</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Metra is engaged in providing pay television and multimedia
telecommunications services.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On July&nbsp;21, 2005, the annual general meeting of
stockholders of Metra resolved to issue additional share capital
totaling Rp26,000&nbsp;million to the Company. The Company paid
the entire amount on October&nbsp;21, 2005.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>PT Graha Sarana Duta (&#147;GSD&#148;)</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
GSD is currently engaged primarily in leasing of offices as well
as providing building management and maintenance services.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On April&nbsp;6, 2001, the Company acquired a 100% ownership
interest in GSD from Koperasi Mitra Duta and Dana Pensiun Bank
Duta, for a purchase consideration of Rp119,000&nbsp;million.
This acquisition resulted in goodwill of Rp106,348&nbsp;million
which is being amortized over a period of five years
(Note&nbsp;15).
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>PT Dayamitra Telekomunikasi (&#147;Dayamitra&#148;)</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Dayamitra is the investor in KSO VI, the joint operating scheme
that provides telecommunications services in Kalimantan. The
Company&#146;s acquisition of a 90.32% ownership interest in
Dayamitra was effective on May&nbsp;17, 2001, the date when the
Deed of Share Transfer was signed. The Company also entered into
an Option Agreement to acquire the remaining 9.68% interest from
the selling stockholders. On December&nbsp;14, 2004, the Company
exercised the option to acquire the remaining
9.68%&nbsp;outstanding shares of Dayamitra by entering into a
Sale and Purchase Agreement with TM Communications
(HK)&nbsp;Ltd. (Note&nbsp;5a).
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-18

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>PT Indonusa Telemedia (&#147;Indonusa&#148;)</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Indonusa is engaged in providing multimedia telecommunications
services.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On August&nbsp;8, 2003, the Company increased its investment in
Indonusa from 57.5% to 88.08% through a share-swap agreement
with PT Centralindo Pancasakti Cellular (&#147;CPSC&#148;)
(Note&nbsp;11).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to the extraordinary meeting of stockholders of
Indonusa on October&nbsp;29, 2003, Indonusa agreed to convert
its payable to the Company amounting to Rp13,500&nbsp;million to
1,350,000&nbsp;shares of Indonusa. Following such conversion,
the Company&#146;s ownership in Indonusa increased from 88.08%
to 90.39%.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company purchased 5.29% of Indonusa&#146;s shares from PT
Megacell Media for Rp4,000&nbsp;million, thereby increasing the
Company&#146;s ownership interest from 90.39% to 95.68% after
the settlement of payment on November&nbsp;22, 2005.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>PT Telekomunikasi Selular (&#147;Telkomsel&#148;)</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telkomsel is engaged in providing telecommunications facilities
and mobile cellular services using Global System for Mobile
Communication (&#147;GSM&#148;) technology on a nationwide basis.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s cross-ownership transaction with Indosat in
2001 increased the Company&#146;s ownership interest in
Telkomsel to 77.72%.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On April&nbsp;3, 2002, the Company entered into a Conditional
Sale and Purchase Agreement (&#147;CSPA&#148;) with Singapore
Telecom Mobile Pte. Ltd. (&#147;Singtel&#148;). Pursuant to the
agreement, the Company sold 23,223 ordinary registered shares of
Telkomsel, representing 12.72% of the issued and
<FONT style="white-space: nowrap">paid-up</FONT> capital of
Telkomsel for a total consideration of US$429.0&nbsp;million
(equivalent to Rp3,948,945&nbsp;million). This transaction
reduced the Company&#146;s ownership in Telkomsel from 77.72% to
65%.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>PT Napsindo Primatel Internasional
    (&#147;Napsindo&#148;)</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Napsindo is engaged in providing &#147;Network Access
Point&#148; (NAP), &#147;Voice Over Data&#148; (VOD)&nbsp;and
other related services.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Based on the notarial deed No.&nbsp;47 dated December&nbsp;30,
2002 of Notary H. Yunardi, S.H., the Company purchased 28% of
Napsindo&#146;s shares from PT Info Asia Sukses Makmur Mandiri
for US$4.9&nbsp;million (equivalent to Rp43,620&nbsp;million),
thereby increasing the Company&#146;s ownership interest from
32% to 60% after the settlement of payment on January&nbsp;28,
2003.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>PT Infomedia Nusantara (&#147;Infomedia&#148;)</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Infomedia is engaged in providing telecommunications information
services and other information services in the form of print and
electronic media. In 2002, Infomedia established a new line of
business to provide call center services.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>PT Pro Infokom Indonesia (&#147;PII&#148;)</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On January&nbsp;29, 2003, the Company together with PT Indonesia
Comnets Plus, a subsidiary of Perusahaan Perseroan (Persero) PT
Perusahaan Listrik Negara (&#147;PLN&#148;), and PT Prima
Infokom Indonesia established PT Pro Infokom Indonesia
(&#147;PII&#148;). The establishment was notarized by deed of
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-19

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
A. Partomuan Pohan, S.H., LLM., notary in Jakarta, under Article
of Association No.&nbsp;24, dated January&nbsp;29, 2003.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
PII was established to develop a national information network
system as the back-bone for the development of the Indonesian
<FONT style="white-space: nowrap">e-Government.</FONT> PII was
intended to maximize the utilization of both the Company&#146;s
and PLN&#146;s existing infrastructures.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On January&nbsp;20, 2005, the Company sold its entire 51% equity
interest in PII to PT Prima Infokom Indonesia for
Rp471&nbsp;million. The revenues and expenses of PII as well as
the related loss on the sale of the subsidiary were not
significant to the consolidated statement of income.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Telekomunikasi Selular Finance Limited
    (&#147;TSFL&#148;)</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telkomsel has 100% direct ownership interest in TSFL, a company
established in Mauritius on April&nbsp;22, 2002. TSFL&#146;s
objective is to raise funds for the development of
Telkomsel&#146;s business through the issuance of debenture
stock, bonds, mortgages or any other securities.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Telkomsel Finance B.V. (&#147;TFBV&#148;)</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TFBV, a wholly owned subsidiary of Telkomsel, was established in
Amsterdam (the Netherlands) on February&nbsp;7, 2005, for the
purpose of borrowing, lending and raising funds, including
issuance of bonds, promissory notes or debt instruments.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Aria West International Finance B.V. (&#147;AWI
    BV&#148;)</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
AWI BV, a company established in the Netherlands, is a wholly
owned subsidiary of AWI. AWI BV is engaged in rendering services
in the field of trade and finance.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>PT Balebat Dedikasi Prima (&#147;Balebat&#148;)</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Infomedia has 51.33% direct ownership interest in Balebat, a
company engaged in the printing business, domiciled in Bogor.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>d.&nbsp;<U>Authorization of the financial statements</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The consolidated financial statements were authorized for issue
by the Board of Directors on June&nbsp;8, 2006.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>2.&nbsp;</B></TD>
    <TD>
    <B>SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The consolidated financial statements of the Company and
subsidiaries have been prepared in accordance with accounting
principles generally accepted in Indonesia (&#147;Indonesian
GAAP&#148;). Indonesian GAAP varies in certain significant
respects from accounting principles generally accepted in the
United States of America (U.S.&nbsp;GAAP). Information relating
to the nature and effect of such differences is presented in
Note&nbsp;54.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-20

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>a.&nbsp;<U>Basis for preparation of financial
    statements</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The consolidated financial statements, except for the statements
of cash flows, are prepared on the accrual basis of accounting.
The measurement basis used is historical cost, except for
certain accounts recorded on the basis described in the related
accounting policies.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The consolidated statements of cash flows are prepared using the
direct method and present the changes in cash and cash
equivalents from operating, investing and financing activities.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Figures in the consolidated financial statements are rounded to
and presented in millions of Indonesian Rupiah (&#147;Rp&#148;),
unless otherwise stated.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>b.&nbsp;<U>Principles of consolidation</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The consolidated financial statements include the financial
statements of the Company and its subsidiaries in which the
Company directly or indirectly has ownership of more than 50%,
or the Company has the ability to control the entity, even
though the ownership is less than or equal to 50%. Subsidiaries
are consolidated from the date on which effective control is
obtained and are no longer consolidated from the date of
disposal.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All significant inter-company balances and transactions have
been eliminated in consolidation.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>c.&nbsp;<U>Transactions with related parties</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company and subsidiaries have transactions with related
parties. The definition of related parties used is in accordance
with Indonesian Statement of Financial Accounting Standards
(&#147;PSAK&#148;) No.&nbsp;7, &#147;Related Party
Disclosures.&#148;
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>d.&nbsp;<U>Acquisitions of subsidiaries</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The acquisition of a subsidiary from a third party is accounted
for using the purchase method of accounting. Intangible assets
acquired in a purchase business combination are amortized over
their respective contractual lives. The excess of the
acquisition cost over the Company&#146;s interest in the fair
value of identifiable assets acquired and liabilities assumed is
recorded as goodwill and amortized using the straight-line
method over a period of not more than five years.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company continually assesses whether events or changes in
circumstances have occurred that would require revision of the
remaining estimated useful life of intangible assets and
goodwill, or whether there is any indication of impairment. If
any indication of impairment exists, the recoverable amount of
intangible assets and goodwill is estimated based on the
expected future cash flows which are discounted to their present
value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to
the asset.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The acquisition transaction with entities under common control
is accounted for in a manner similar to that in pooling of
interests accounting (carryover basis). The difference between
the consideration paid or received and the related historical
carrying amount, after considering income tax effects, is
recognized directly in equity and reported as &#147;Difference
in value of restructuring transactions between entities under
common control&#148; in the stockholders&#146; equity
section&nbsp;(See Note&nbsp;4).
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-21

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>e.&nbsp;<U>Foreign currency translation</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The functional currency of the Company and its subsidiaries is
the Indonesian Rupiah and the books of accounts of the Company
and its subsidiaries are maintained in Indonesian Rupiah.
Transactions in foreign currencies are translated into
Indonesian Rupiah at the rates of exchange prevailing at
transaction date. At the balance sheet date, monetary assets and
monetary liability balances denominated in foreign currencies
are translated into Indonesian Rupiah based on the buy and sell
rates quoted by Reuters prevailing at the balance sheet date.
The Reuters buy and sell rates, applied respectively to
translate monetary assets and monetary liability balances, were
Rp9,280 and Rp9,300 to US$1 as of December&nbsp;31, 2004, and
Rp9,825 and Rp9,835 to US$1 as of December&nbsp;31, 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The resulting foreign exchange gains or losses, realized and
unrealized, are credited or charged to income of the current
year, except for foreign exchange differences incurred on
borrowings during the construction of qualifying assets which
are capitalized to the extent that the borrowings can be
attributed to the construction of those qualifying assets
(Note&nbsp;2k).
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>f.&nbsp;<U>Cash and cash equivalents</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Cash and cash equivalents consist of cash on hand and in banks
and all unrestricted time deposits with maturities of not more
than three months from the date of placement.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>g.&nbsp;<U>Investments</U></I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>i.&nbsp;<U>Time deposits</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Time deposits with maturities of more than three months are
presented as temporary investments.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>ii.&nbsp;<U>Investments in securities</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Investments in available-for-sale securities are stated at fair
value. Unrealized holding gains or losses on available-for-sale
securities are excluded from income of the current year and are
reported as a separate component in the stockholders&#146;
equity section until realized. Realized gains or losses from the
sale of available-for-sale securities are recognized in the
income of the current year, and are determined on a
specific-identification basis. A decline in the fair value of
any available-for-sale securities below cost that is deemed to
be other-than-temporary is charged to income of the current year.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>iii.&nbsp;<U>Investments in associated companies</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Investments in shares of stock in which the Company has 20% to
50% of the voting rights, and over which the Company exerts
significant influence, but not control, over the financial and
operating policies are accounted for using the equity method.
Under this method, the Company recognizes the Company&#146;s
proportionate share in the income or loss of the associated
company from the date that significant influence commences until
the date that significant influence ceases. When the
Company&#146;s share of loss exceeds the carrying amount of the
associated company, the carrying amount is reduced to nil and
recognition of further losses is discontinued except to the
extent that the Company has guaranteed obligations of the
associated company or committed to provide further financial
support to the associated company.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-22

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On a continuous basis, but no less frequently than at the end of
each year, the Company evaluates the carrying amount of its
ownership interests in investee companies for possible
impairment. Factors considered in assessing whether an
indication of other-than-temporary impairment exists include the
achievement of business plan objectives and milestones including
cash flow projections and the results of planned financing
activities, the financial condition and prospects of each
investee company, the fair value of the ownership interest
relative to the carrying amount of the investment, the period of
time the fair value of the ownership interest has been below the
carrying amount of the investment and other relevant factors.
Impairment to be recognized is measured based on the amount by
which the carrying amount of the investment exceeds the fair
value of the investment. Fair value is determined based on
quoted market prices (if any), projected discounted cash flows
or other valuation techniques as appropriate.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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
directly in equity and are reported as &#147;Difference due to
change of equity in associated companies&#148; in the
stockholders&#146; equity section. Differences previously
credited directly to equity as a result of equity transactions
in associated companies are released to the statement of income
upon the sale of an interest in the associate in proportion with
percentage of the interest sold.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The functional currency of PT Pasifik Satelit Nusantara and PT
Citra Sari Makmur is the U.S.&nbsp;Dollar. For the purpose of
reporting these investments using the equity method, the assets
and liabilities of these companies as of the balance sheet date
are translated into Indonesian Rupiah using the rates of
exchange prevailing at that date, while revenues and expenses
are translated into Indonesian Rupiah at the average rates of
exchange for the year. The resulting translation adjustments are
reported as part of &#147;Translation adjustment&#148; in the
stockholders&#146; equity section.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>iv.&nbsp;<U>Other investments</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Investments in shares of stock with ownership interests of less
than 20% that do not have readily determinable fair values and
are intended for long-term investments are carried at cost and
are adjusted only for other-than-temporary decline in the value
of individual investments. Any such write-down is charged
directly to income of the current year.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>h.&nbsp;<U>Trade and other accounts receivable</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Trade and other accounts receivable are recorded net of an
allowance for doubtful accounts, based upon a review of the
collectibility of the outstanding amounts at the end of the
year. Accounts are written off against the allowance during the
period in which they are determined to be not collectible.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Trade and other accounts receivable are recorded at the invoiced
amount. The allowance for doubtful accounts is the
Company&#146;s best estimate of the amount of probable credit
losses in the Company&#146;s existing accounts receivable. The
Company determines the allowance based on historical write-off
experience. The Company reviews its allowance for doubtful
accounts monthly. Past due balances over 90&nbsp;days for retail
customers are fully provided, and past due balance for
non-retail customers over a specified amount are reviewed
individually for collectibility. Account balances are charged
off against the allowance after all means of collection have
been exhausted and the potential for recovery is considered
remote. The Company does not have any off-balance sheet credit
exposure related to its customers.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-23

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>i.&nbsp;<U>Inventories</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Inventories, principally consist of components and modules,
which are transferred to Property, Plant and Equipment upon use.
Inventories also include Subscriber Identification Module
(&#147;SIM&#148;) card, Removable User Identity Module
(&#147;RUIM&#148;) card and prepaid voucher blanks.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Cost is determined using the weighted average method for
components, SIM card, RUIM card and prepaid voucher blanks, and
the specific-identification method for modules.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Allowance for obsolescence is primarily based on the estimated
forecast of future usage of these items.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>j.&nbsp;<U>Prepaid expenses</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Prepaid expenses are amortized over their beneficial periods
using the straight-line method.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>k.&nbsp;<U>Property, plant and equipment&nbsp;&#151; direct
    acquisitions</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Property, plant and equipment directly acquired are stated at
cost, except for certain revalued assets, less accumulated
depreciation and impairment losses.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Property, plant and equipment, except land, are depreciated
using the straight-line method, based on the estimated useful
lives of the assets as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="89%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Years</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Buildings</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    20</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Switching equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    5-15</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Telegraph, telex and data communication equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    5-15</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Transmission installation and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    5-20</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Satellite, earth station and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    3-15</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cable network</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    5-15</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Power supply</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    3-10</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Data processing equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    3-10</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other telecommunications peripherals</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    5</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Office equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    3-5</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Vehicles</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    5-8</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    5</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Land is stated at cost and is not depreciated.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 based upon the greater
of its net selling price or value in use.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The cost of maintenance and repairs is expensed as incurred.
Expenditures, which extend the useful life of the asset or
result in increased future economic benefits such as increase in
capacity or improvement in the quality of output or standard of
performance, are capitalized and depreciated based on the
applicable depreciation rates.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-24
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
When assets are retired or otherwise disposed of, their carrying
values and the related accumulated depreciation are eliminated
from the consolidated financial statements, and the resulting
gains or losses on the disposal or sale of property, plant and
equipment are recognized in the statement of income.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Computer software used for data processing is included in the
value of the associated hardware.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Property under construction is stated at cost until construction
is complete, at which time it is reclassified to the specific
property, plant and equipment account to which it relates.
During the construction period, borrowing costs, which include
interest expense and foreign exchange differences incurred to
finance the construction of the asset, are capitalized in
proportion to the average amount of accumulated expenditures
during the period. Capitalization of borrowing cost ceases when
the assets are ready for its intended use.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>l.&nbsp;<U>Property, plant and equipment under capital
    leases</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Property, plant and equipment acquired under capital leases are
stated at the present value of minimum lease payments. At
inception of the lease, a corresponding liability, which equals
to the present value of minimum lease payments, is also recorded
and subsequently reduced by the principal component of each
minimum lease payment. The interest component of each minimum
lease payment is recognized in the statement of income.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Leased assets are capitalized only if all of the following
criteria are met: (a)&nbsp;the lessee has an option to purchase
the leased asset at the end of the lease period at a price
agreed upon at the inception of the lease agreement, and
(b)&nbsp;the sum of periodic lease payments, plus the residual
value, will cover the acquisition price of the leased asset and
related interest, and (c)&nbsp;there is a minimum lease period
of at least 2&nbsp;years.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Leased assets are depreciated using the same method and over the
same estimated useful lives used for directly acquired property,
plant and equipment.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>m.&nbsp;<U>Revenue-sharing arrangements</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company records assets under revenue-sharing agreements as
&#147;Property, plant and equipment under revenue-sharing
arrangements&#148; (with a corresponding initial credit to
&#147;Unearned income on revenue-sharing arrangements&#148;
presented in the Liabilities section of the balance sheet) based
on the costs incurred by the investors as agreed upon in the
contracts entered into between the Company and the investors.
Property, plant and equipment are depreciated over their
estimated useful lives using the straight-line method.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At the end of the revenue-sharing period, the respective
property, plant and equipment under revenue-sharing arrangements
are reclassified to the &#147;Property, plant and
equipment&#148; account.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Revenue earned under revenue-sharing arrangements is recognized
on the basis of the Company&#146;s share as provided in the
agreement.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-25

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>n.&nbsp;<U>Joint operation schemes</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Revenues from joint operation schemes include amortization of
the investor&#146;s initial payments, Minimum Telkom Revenues
(&#147;MTR&#148;) and the Company&#146;s share of Distributable
KSO Revenues (&#147;DKSOR&#148;).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Unearned initial investor payments received as compensation from
the KSO Investors are presented net of all direct costs incurred
in connection with the KSO agreement and are amortized using the
straight-line method over the KSO period of 15&nbsp;years
starting from January&nbsp;1, 1996.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
MTR are recognized on a monthly basis, based upon the contracted
MTR amount for the current year, in accordance with the KSO
agreement.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s share of DKSOR is recognized on the basis of
the Company&#146;s percentage share of the KSO revenues, net of
MTR and operational expenses of the KSO Units, as provided in
the KSO agreements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under PSAK No.&nbsp;39, &#147;Accounting for Joint Operation
Schemes&#148;, which supersedes paragraph&nbsp;14 of PSAK
No.&nbsp;35, &#147;Accounting for Telecommunication Services
Revenue&#148;, the assets built by the KSO Investors under the
Joint Operation Schemes are recorded in the books of the KSO
Investors which operate the assets and are transferred to the
Company at the end of the KSO period or upon termination of the
KSO agreement.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>o.&nbsp;<U>Deferred charges for landrights</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Costs incurred to process and extend the landrights are deferred
and amortized using the straight-line method over the term of
the landrights.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>p.&nbsp;<U>Revenue and expense recognition</U></I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>i.&nbsp;<U>Fixed line telephone revenues</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Revenues from fixed line installations are recognized at the
time the installations are placed in service. Revenues from
usage charges are recognized as customers incur the charges.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>ii.&nbsp;<U>Cellular and fixed wireless telephone
    revenues</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Revenues from service connections (connection fees) are
recognized as income at the time the connections occur. Revenues
from airtime (for cellular) and monthly subscription charges are
recognized as accessed and as earned. Revenues from prepaid card
customers, which consist of the sale of starter packs, also
known as SIM cards in the case of cellular and RUIM in the case
of fixed wireless telephone, and pulse reload vouchers, are
recognized as follows:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    1.&nbsp;Sale of starter packs is recognized as revenue upon
    delivery of the starter packs to distributors, dealers or
    directly to customers.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    2.&nbsp;Sale of pulse reload vouchers is recognized initially as
    unearned income and recognized proportionately as revenue based
    on successful calls made by the subscribers or whenever the
    unused stored value of the voucher has expired.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-26

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>iii.&nbsp;<U>Interconnection revenues</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Revenues from network interconnection with other domestic and
international telecommunications carriers are recognized as
incurred and are presented net of interconnection expenses.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Expenses are recognized on an accrual basis.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>q.&nbsp;<U>Employee benefits</U></I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>i.&nbsp;<U>Pension and post-retirement health care benefit
    plans</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s net obligations in respect of the defined
pension benefit and post-retirement health care benefit plans
are calculated at the present value of estimated future benefits
that the employees have earned in return for their service in
the current and prior periods, deducted by any plan assets. The
calculation is performed by an independent actuary using the
projected unit credit method.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>ii.&nbsp;<U>Long service awards (&#147;LSA&#148;)</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s employees are entitled to receive certain
cash awards based on length of service requirement. The benefits
are either paid at the time the employee reaches certain
anniversary dates during employment, upon retirement or at the
time of termination.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s obligation with respect to LSA is calculated
by an independent actuary using the projected unit credit method.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>iii.&nbsp;<U>Early retirement benefits</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Early retirement benefits are accrued at the time the Company
makes a commitment to provide early retirement benefits as a
result of an offer made in order to encourage voluntary
redundancy. The Company is demonstrably committed to a
termination when, and only when, the Company has a detailed
formal plan for the early retirement and is without realistic
possibility of withdrawal.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>r.&nbsp;<U>Income tax</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company and subsidiaries apply the asset and liability
method of accounting for income tax. Under this method, deferred
tax assets and liabilities are recognized for temporary
differences between the financial and tax bases of assets and
liabilities at each reporting date. This method also requires
the recognition of future tax benefits, such as the benefit of
tax loss carryforwards, to the extent their realization is
probable. Deferred tax assets and liabilities are measured using
enacted tax rates at each reporting date which are expected to
apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Income tax is charged or credited in the statement of income,
except to the extent that it relates to items recognized
directly in equity, such as difference in value of restructuring
transactions between entities under common control
(Note&nbsp;2d) and effect of foreign currency translation
adjustment for certain investments in associated companies
(Note&nbsp;2g.iii), in which case income tax is also charged or
credited directly to equity.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-27

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>s.&nbsp;<U>Earnings per share and earnings per American
    Depositary Share (&#147;ADS&#148;)</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 40, the number of shares represented by
each ADS.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>t.&nbsp;<U>Segment information</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company and its subsidiaries&#146; segment information is
presented based upon identified business segments. A business
segment is a distinguishable unit that provides different
products and services and is managed separately. Business
segment information is consistent with operating information
routinely reported to the Company&#146;s chief operating
decision maker.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Segment information is prepared in conformity with the
accounting policies adopted for preparing and presenting the
consolidated financial statements.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>u.&nbsp;<U>Derivative instruments</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Derivative transactions are accounted for in accordance with
PSAK 55, &#147;Accounting for Derivative Instruments and Hedging
Activities&#148; which requires that all derivative instruments
be recognized in the financial statements at fair value. To
qualify for hedge accounting, PSAK 55 requires certain criteria
to be met, including documentation required to have been in
place at the inception of the hedge.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Changes in fair value of derivative instruments that do not
qualify for hedge accounting are recognized in the statement of
income. If a derivative instrument is designated and qualify for
hedge accounting, changes in fair value of derivative
instruments are recorded as adjustments to the assets or
liabilities being hedged in the income of the current year or in
the stockholders&#146; equity, depending on the type of hedge
transaction represented and the effectiveness of the hedge.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>v.&nbsp;<U>Use of estimates</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The preparation of the consolidated financial statements
requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of
the consolidated financial statements and the reported amounts
of revenues and expenses during the reporting period.
Significant items subject to such estimates and assumptions
include the carrying amount of property, plant and equipment and
intangible assets, valuation allowance for receivables and
obligations related to employee benefits. Actual results could
differ from those estimates.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>3.&nbsp;</B></TD>
    <TD>
    <B>TRANSLATION OF RUPIAH INTO UNITED STATES DOLLARS</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The consolidated financial statements are stated in Indonesian
Rupiah. The translations of Indonesian Rupiah amounts into
United States Dollars are included solely for the convenience of
the readers and have been made using the average of the market
buy and sell rates of Rp9,830 to US$1 published by Reuters on
December&nbsp;31, 2005. The convenience translations should not
be construed as representations that the Indonesian Rupiah
amounts have been, could have been, or could in the future be,
converted into United States Dollars at this or any other rate
of exchange.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-28

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>4.&nbsp;</B></TD>
    <TD>
    <B>CHANGES IN METHODS OF ACCOUNTING</B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>a.&nbsp;<U>Employee Benefits</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In June 2004, the Indonesian Financial Accounting Standards
Board issued PSAK No.&nbsp;24 (Revised 2004), &#147;Employee
Benefits&#148; (PSAK 24R), which is a revision of PSAK
No.&nbsp;24, &#147;Accounting for Pension Benefits.&#148; PSAK
24R changes, for the Company, the method of accounting for its
employee benefit plans by requiring the vested portion of prior
service cost be immediately recognized and that the cumulative
unrecognized actuarial gain or loss exceeding ten percent of the
greater of the present value of the projected benefit obligation
and the fair value of plan assets be amortized over the expected
average remaining working lives of the employees participating
in the plan.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
PSAK 24R requires the Company to adopt its provisions
retrospectively as of January&nbsp;1, 2004, (the
&#147;Transition Date&#148;) by way of the recognition of:
(i)&nbsp;a liability computed in accordance with the provisions
of PSAK 24R determined as of the Transition Date (the
&#147;Transition Liability&#148;) and (ii)&nbsp;the difference
between the Transition Liability and the liability previously
recognized for employee benefits as of the same date pursuant to
then in effect accounting standards, as a cumulative effect of a
change in method of accounting in stockholders&#146; equity.
Accordingly, the Company has restated its accompanying
consolidated balance sheet as of the Transition Date by
increasing its liability for employee benefits previously
reported by Rp3,218,724&nbsp;million with a corresponding
decrease in consolidated stockholders&#146; equity of
Rp2,618,665&nbsp;million, net of tax of Rp600,059&nbsp;million.
In addition, the adoption of PSAK 24R effective as of
January&nbsp;1, 2004, has resulted in an increase to previously
reported net income for the year ended December&nbsp;31, 2004 in
the amount of Rp485,359&nbsp;million, net of tax of
Rp175,454&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The effects of this restatement on previously reported
consolidated financial statements as of and for the year ended
December&nbsp;31, 2004 for the application of PSAK&nbsp;24R is
summarized below. This restatement had no net effect on
previously reported net cash provided by operating activities,
net cash used in investing activities and net cash used in
financing activities in the consolidated statements of cash
flows.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="64%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>As</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Previously</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Reported</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>As Restated</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance sheet:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Assets:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Prepaid pension benefit costs</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>91,262</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,362</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total non-current assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>47,065,158</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46,975,258</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>56,269,092</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>56,179,192</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Liabilities:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred income tax liabilities&nbsp;&#151; net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,352,171</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,927,567</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued long service awards</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>572,303</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>449,841</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued post-retirement health care benefits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,841,146</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,983,707</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued pension and other post-retirement benefits costs</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32,007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,479,918</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total non-current liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,392,276</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,435,682</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-29

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="64%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>As</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Previously</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Reported</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>As Restated</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stockholders&#146; equity:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Retained earnings&nbsp;&#151; unappropriated</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,139,393</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,006,087</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total stockholders&#146; equity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,261,342</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,128,036</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Statement of income:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating expenses&nbsp;&#151; personnel</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,570,778</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,909,965</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total operating expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,020,699</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,359,886</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,927,067</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,587,880</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income before tax</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,088,582</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,749,395</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Tax expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,003,072</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,178,526</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,129,209</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,614,568</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income per share&nbsp;&#151; in full Rupiah amount</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>304.03</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>328.10</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income per ADS&nbsp;&#151; in full Rupiah amount</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,161.13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,124.14</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>b.&nbsp;<U>Restructuring Transactions Between Entities Under
    Common Control</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In July 2004, the Indonesian Financial Accounting Standards
Board issued PSAK No.&nbsp;38 (Revised 2004), &#147;Accounting
for Restructuring Transactions between Entities under Common
Control,&#148; (&#147;PSAK 38R&#148;). PSAK&nbsp;38R changes the
Company&#146;s method of accounting for previously recorded
restructuring transactions between entities under common control
when certain conditions are met. The provisions of PSAK&nbsp;38R
were effective for the Company beginning January&nbsp;1, 2005,
the initial application date.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to a ruling issued by the Indonesian Capital Market and
Financial Institution Supervisory Agency (&#147;BAPEPAM&#148;)
regarding the initial application of PSAK&nbsp;38R by public
entities, the Company is required to reclassify the previously
recorded difference in value of restructuring transactions
between entities under common control as a direct adjustment to
retained earnings as of the initial application date when the
common control relationship between the transacting parties no
longer exists as of January&nbsp;1, 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As discussed in Note&nbsp;29, the difference in value of
restructuring transactions between entities under common control
as of January&nbsp;1, 2005 amounting to Rp7,288,271 million
arose from transactions between the Company and Indosat, which
at the time of the transactions was also controlled by the
Government and therefore was an entity under common control with
the Company. This common control relationship ceased to exist in
December 2002 when the Government sold its 41.94% ownership
interest in Indosat to STT Communications Ltd.
(&#147;STTC&#148;) and waived its special voting rights with
respect to the Series&nbsp;A Dwiwarna share. In accordance with
the BAPEPAM ruling, the Company has reclassified the difference
in value of restructuring transactions between entities under
common control resulting from the cross-ownership transactions
and acquisition of Pramindo as a charge to retained earnings as
of January&nbsp;1, 2005. This reclassification has no effect on
net consolidated stockholders&#146; equity.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-30

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>5.&nbsp;</B></TD>
    <TD>
    <B>ACQUISITION OF KSO INVESTORS AND KSO IV</B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>a.&nbsp;<U>Dayamitra</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In connection with the acquisition of 90.32% of the shares of
Dayamitra on May&nbsp;17, 2001, the Company also entered into
the following agreements:
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.&nbsp;Option Agreement
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company entered into an Option Agreement with TM
Communications (HK)&nbsp;Ltd (&#147;TMC&#148;), providing the
Company with an option to acquire the remaining 9.68% equity
interest in Dayamitra, referred to as the Option Share. Under
the agreement, TMC, the selling stockholder, granted the Company
an exclusive option to purchase full and legal title to the
Option Share (the &#147;Call Option&#148;), and the Company
granted the selling stockholder an exclusive option to sell to
the Company full legal title to those shares (the &#147;Put
Option&#148;).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In consideration for the grant of the options, the Company paid
to the selling stockholder the option purchase price of
US$6.3&nbsp;million plus US$1&nbsp;million as payment for
Dayamitra&#146;s adjusted working capital, or a total of
US$7.3&nbsp;million. The amount was payable in eight quarterly
installments of US$0.9&nbsp;million beginning on August&nbsp;17,
2001 and ending on May&nbsp;17, 2003. Payments were made through
an escrow account established under the Escrow Agreement
discussed below.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company was entitled to exercise the option any time after
Dayamitra satisfied all of its obligations under the JBIC
(formerly J-Exim) loan beginning on May&nbsp;17, 2003 and until
five business days prior to March&nbsp;26, 2006. The strike
price payable by the Company to the selling stockholder for the
Option Shares upon exercise of the option was
US$16.2&nbsp;million less certain amounts that are stipulated in
the Option Agreement.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Dayamitra repaid the JBIC loan and the JBIC loan agreement was
terminated on March&nbsp;25, 2003.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;14, 2004, the Company exercised the option by
entering into a Sale and Purchase Agreement to acquire
TMC&#146;s 9.68%&nbsp;outstanding shares in Dayamitra with the
strike price of US$16.2&nbsp;million which the payment will be
due on March&nbsp;26, 2006. Payment of the strike price will be
made through an escrow account established under the Escrow
Agreement discussed below. The Company is required to deposit
US$12.6&nbsp;million (representing the strike price of
US$16.2&nbsp;million less funds available in the escrow account
on November&nbsp;30, 2004 of US$2.4&nbsp;million and withholding
tax of US$1.2&nbsp;million) in sixteen monthly installments of
US$0.8&nbsp;million beginning on December&nbsp;26, 2004 through
March&nbsp;26, 2006.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The purchase price for 9.68%&nbsp;outstanding shares of
Dayamitra was US$22.1&nbsp;million or equivalent to
Rp203,028&nbsp;million which represents the present value of the
option strike price (US$16.2&nbsp;million) using a discount rate
of 7.5% at the acquisition date plus the option purchase price
(US$6.3&nbsp;million) and payment for Dayamitra&#146;s adjusted
working capital (US$1&nbsp;million). This additional acquisition
resulted in intangible assets of Rp231,477&nbsp;million. The
amount is being amortized over the then remaining term of the
KSO agreement of 6&nbsp;years (Note&nbsp;15). There was no
goodwill arising from this additional acquisition. Had this
acquisition taken place on January 1 of the previous year,
consolidated net income would not have been significantly
different from the reported amounts.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2004 and 2005, the remaining option
strike price to be paid to TMC, before unamortized discount,
amounted to US$15.0&nbsp;million (equivalent
Rp139,752&nbsp;million) and
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-31

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
US$15.0&nbsp;million (equivalent Rp147,791&nbsp;million) and is
presented as &#147;Liabilities of business acquisitions&#148;
(Note&nbsp;25). As of March&nbsp;27, 2006, the option strike
price has been fully repaid.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2.&nbsp;Escrow Agreement
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
An Escrow Agreement dated May&nbsp;17, 2001, was entered into by
and among the Company, Dayamitra, PT Intidaya Sistelindomitra
(&#147;Intidaya&#148;), Cable and Wireless plc (&#147;C&#38;W
plc&#148;), PT Mitracipta Sarananusa (&#147;Mitracipta&#148;),
TMC, Tomen Corporation (&#147;Tomen&#148;), Citibank N.A.
Singapore (the Singapore Escrow Agent) and Citibank N.A. Jakarta
(the Jakarta Escrow Agent), to establish an Escrow Account and
facilitate the payment (Note&nbsp;16).
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>b.&nbsp;<U>Pramindo</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On April&nbsp;19, 2002, the Company and the stockholders of
Pramindo, namely France Cables et Radio SA, PT Astratel
Nusantara, Indosat, Marubeni Corporation, International Finance
Corporation (&#147;IFC&#148;) and NMP Singapore Pte. Ltd.
(&#147;NMP Singapore&#148;) (collectively the &#147;Selling
Stockholders&#148;) entered into a Conditional Sale and Purchase
Agreement (&#147;CSPA&#148;) pursuant to which the Company
acquired all of Pramindo&#146;s shares. The Selling Stockholders
shares were transferred to an escrow account (hereafter referred
as &#147;escrow shares&#148;).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Legal title to the escrow shares was transferred to the Company
in three specific tranches on September&nbsp;15,
2002&nbsp;&#151; 30%, September&nbsp;30, 2003&nbsp;&#151; 15%
and on December&nbsp;31, 2004&nbsp;&#151; 55% upon payment of
the promissory notes issued to the Selling Stockholders as
payment for the acquisition of the shares. The escrow shares can
be accessed by the Selling Stockholders only upon default on
payment of the promissory notes by the Company, and no dividends
can be paid out until the arrangements between the parties are
completed or terminated in accordance with the terms of the
relevant agreements.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company and the Selling Stockholders also entered into a
Stockholders Voting Agreement (&#147;SVA&#148;) on
August&nbsp;15, 2002, pursuant to which each stockholder of
Pramindo delivered to the Company a Power of Attorney
(&#147;PoA&#148;) whereby the Company obtained the right to vote
the escrow shares. The Company thereby acquired the right to
nominate all of the members of the Board of Directors and Board
of Commissioners of Pramindo. The SVA is subject to certain
reserve matters which serve as protective rights to the Selling
Stockholders.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The aggregate purchase price amounted to US$390.3&nbsp;million
(Rp3,464,040&nbsp;million) plus Rp250,000&nbsp;million,
represented by an initial payment of approximately
US$9.3&nbsp;million (Rp82,218&nbsp;million), consultants&#146;
fees of US$5.9&nbsp;million (Rp52,818&nbsp;million), working
capital reimbursement of Rp250,000&nbsp;million, and the issue
by the Company of Promissory Notes (series&nbsp;I and
series&nbsp;II) with an aggregate face value of
US$375.1&nbsp;million, of which the present value at the
discount rate of 8.76% at the effective date of the acquisition
was estimated to be US$332.8&nbsp;million
(Rp2,953,617&nbsp;million). The series&nbsp;I promissory notes
are non-interest bearing and the series&nbsp;II promissory notes
carry a market interest rate. The Promissory Notes are to be
paid in 10 unequal quarterly installments beginning
September&nbsp;15, 2002 and are irrevocable, unconditional and
transferable.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The total purchase consideration was allocated first to the net
monetary assets and then the fixed assets acquired. An
intangible asset of Rp2,752,267&nbsp;million was identified
representing the right to operate the business in the KSO Area.
The amount is being amortized over the then remaining term of
the KSO agreement of 8.4&nbsp;years (Note&nbsp;15). There was no
goodwill arising from this acquisition.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-32

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, the portion that relates to Indosat&#146;s 13%
equity interest in Pramindo has been accounted for as a
restructuring of entities under common control (Note&nbsp;29).
On the acquisition date, the difference between the purchase
consideration and the historical amount of the net assets
acquired amounting to Rp296,038&nbsp;million was included as
&#147;Difference in value of restructuring transactions between
entities under common control&#148; in the stockholders&#146;
equity section (see Note&nbsp;29) and was calculated as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="85%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Purchase consideration&nbsp;&#151; net of discount on promissory
    notes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,338,653</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Historical amount of net assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,061,437</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Difference in value for 100% ownership</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,277,216</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Difference adjusted to stockholders&#146; equity for
    Indosat&#146;s 13% ownership in Pramindo</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>296,038</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company acquired control of Pramindo on August&nbsp;15, 2002
and has consequently consolidated Pramindo from August&nbsp;1,
2002 being the nearest convenient balance date.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The allocation of the acquisition cost was as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="79%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Purchase consideration&nbsp;&#151; net of discount on promissory
    notes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,338,653</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fair value of net assets acquired:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    - Cash and cash equivalents</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>141,475</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    - Distributable KSO revenue receivable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>187,468</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    - Other current assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,839</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    - Property, plant and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,807,338</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    - Intangible assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,752,267</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    - Other non-current assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>160,139</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    - Current liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(284,120</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    - Deferred tax liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,115,645</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    - Non-current liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(620,146</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fair value of net assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,042,615</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Difference adjusted to equity for 13% Indosat&#146;s ownership
    in Pramindo</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>296,038</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total purchase consideration</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,338,653</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Net cash outflow on the acquisition of Pramindo amounted to
Rp243,561&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On January&nbsp;28, 2004, the Company obtained a loan to finance
the payment of the outstanding promissory notes issued for the
acquisition of Pramindo (Note&nbsp;20b). On March&nbsp;15, 2004,
the Company repaid the remaining balance of these promissory
notes and legal title to all of Pramindo&#146;s shares has been
completely transferred to the Company.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-33

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>c.&nbsp;<U>AWI</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Effective on July&nbsp;31, 2003 (the &#147;closing date&#148;),
the Company acquired 100% of the outstanding common stock of
AWI, the investor in KSO&nbsp;III, for approximately
Rp1,141,752&nbsp;million plus the assumption of AWI&#146;s debts
of Rp2,577,926&nbsp;million. The purchase consideration included
non-interest bearing promissory notes with a face value of
US$109.1&nbsp;million (Rp927,272&nbsp;million), of which the
present value at the discount rate of 5.16% at the closing date
was estimated to be US$92.7&nbsp;million
(Rp788,322&nbsp;million). The promissory notes are to be paid in
10 equal semi-annual installments beginning July&nbsp;31, 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The acquisition of AWI has been accounted for using the purchase
method of accounting. There was no goodwill arising from this
acquisition. The following table summarizes the final purchase
price allocation of the acquired assets and assumed liabilities
based on estimates of their respective fair values at the
closing date:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="82%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Distributable KSO revenue receivable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>540,267</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Property, plant and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,556,269</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Intangible assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,982,564</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,372</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred tax liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(393,794</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fair value of net assets acquired</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,719,678</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Borrowings assumed</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,577,926</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amount of cash and promissory notes given up</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,141,752</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Intangible assets identified from this acquisition represent
right to operate the business in the KSO area and the amount is
being amortized over the then remaining term of the KSO
agreement of 7.4&nbsp;years (Note&nbsp;15).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s consolidated results of operations include
the operating results of AWI since July&nbsp;31, 2003, the date
of acquisition.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The outstanding promissory notes issued for the acquisition of
AWI are presented as &#147;Liabilities of business
acquisitions&#148; in the consolidated balance sheets as of
December&nbsp;31, 2004 and 2005 (Note&nbsp;25). As of
December&nbsp;31, 2004 and 2005, the outstanding promissory
notes, before unamortized discount, amounted to
US$98.2&nbsp;million (Rp913,091&nbsp;million) and
US$76.4&nbsp;million (Rp751,036&nbsp;million), respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The allocation of the acquisition cost described above was based
on an independent appraisal of fair values.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>d.&nbsp;<U>Amendment of the Joint Operation Scheme in
    Regional Division&nbsp;IV (&#147;KSO IV&#148;)</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On January&nbsp;20, 2004, the Company and PT Mitra Global
Telekomunikasi Indonesia (&#147;MGTI&#148;), the investor in KSO
IV, entered into an agreement to amend and restate their joint
operation agreement
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-34

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
(&#147;KSO agreement&#148;). The principal provisions in the
original KSO agreement that have been amended are:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="3%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    The rights to operate fixed-line telecommunications services are
    transferred to the Company, where KSO IV is operated under the
    management, supervision, control and responsibility of the
    Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    Responsibilities for funding construction of new
    telecommunication facilities and payments of operating expenses
    incurred in KSO IV are assigned to the Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    Risk of loss from damages or destruction of assets operated by
    KSO IV is transferred to the Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    At the end of the KSO period (December&nbsp;31, 2010), all
    rights, title and interest of MGTI in existing property, plant
    and equipment (including new additional installations) and
    inventories shall be transferred to the Company at no cost.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    The Company&#146;s rights to receive Minimum Telkom Revenues
    (&#147;MTR&#148;) and share in Distributable KSO Revenues
    (&#147;DKSOR&#148;) under the original KSO agreement were
    amended so that MGTI receives fixed monthly payments
    (&#147;Fixed Investor Revenues&#148;) beginning in February 2004
    through December 2010 totaling US$517.1&nbsp;million and the
    Company is entitled to the balance of KSO revenues net of
    operating expenses and payments to MGTI for Fixed Investor
    Revenues. In addition, payments for Fixed Investor Revenues must
    be made to MGTI before any payments can be made to the Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    In the event funds in KSO IV are insufficient to pay Fixed
    Investor Revenues to MGTI, the Company is required to pay the
    shortfall to MGTI.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a result of the amendment of the KSO agreement, the Company
obtained the legal right to control financial and operating
decisions of KSO IV. Accordingly, the Company has accounted for
this transaction as a business combination using the purchase
method of accounting.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The purchase price for this transaction was approximately
US$390.7&nbsp;million or equivalent to Rp3,285,362&nbsp;million
which represents the present value of fixed monthly payments
(totaling US$517.1&nbsp;million) to be paid to MGTI beginning in
February 2004 through December 2010 using a discount rate of
8.3% plus direct cost of the business combination. The
allocation of the acquisition cost was as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="85%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Property, plant and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,377,134</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Intangible assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>908,228</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total purchase consideration</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,285,362</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The allocation of the acquisition cost described above was based
on an independent appraisal of fair values. Intangible assets
identified from this acquisition represent right to operate the
business in the KSO area and the amount is being amortized over
the remaining term of the KSO agreement of 6.9&nbsp;years
(Note&nbsp;15). There was no goodwill arising from this
acquisition.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-35

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s consolidated results of operations include
the operating results of KSO IV since February&nbsp;1, 2004
being the nearest convenient balance date.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2004 and 2005, the remaining monthly
payments to be made to MGTI, before unamortized discount,
amounted to US$462.9&nbsp;million (Rp4,305,125&nbsp;million) and
US$393.3&nbsp;million (Rp3,868,433&nbsp;million) and is
presented as &#147;Liabilities of business acquisitions&#148;
(Note&nbsp;25).
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>e.&nbsp;<U>Pro forma operating results related to acquisition
    of KSO investors and KSO IV</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following unaudited pro forma financial information reflects
the consolidated results of operations of the Company as if the
acquisition of AWI and KSO IV had taken place on January&nbsp;1,
2003. The pro forma information includes adjustments for
amortization of intangible assets, depreciation expense on
property, plant and equipment based on the allocated purchase
price, interest expense on incremental borrowings and income
taxes. The pro forma financial information is not necessarily
indicative of the results of operations as it would have been
had the transactions been effected on the assumed dates or
indicative of future operations.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="71%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Unaudited</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28,343,447</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,020,663</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,687,955</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,916,465</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income before tax</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,399,321</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,071,780</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,509,255</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,117,619</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income per share&nbsp;&#151; in full Rupiah amount</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>322.88</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>303.45</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income per ADS&nbsp;&#151; in full Rupiah amount</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,915.19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,138.13</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>6.&nbsp;</B></TD>
    <TD>
    <B>CASH AND CASH EQUIVALENTS</B></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="68%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash on hand</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,631</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,070</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash in banks</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Related parties</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rupiah</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Mandiri</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>192,056</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>89,128</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Negara Indonesia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>158,519</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>54,590</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Rakyat Indonesia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,712</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,095</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Pos Nusantara</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,278</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>879</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>362,565</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>149,692</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-36

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="68%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign currencies</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Mandiri</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>98,951</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>55,797</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Negara Indonesia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,765</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,701</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Rakyat Indonesia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>612</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>657</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>101,328</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>59,155</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total&nbsp;&#151; related parties</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>463,893</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>208,847</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third parties</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rupiah</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    ABN AMRO Bank</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>81,184</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,453</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deutsche Bank</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,173</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,954</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Bukopin</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,190</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,800</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Central Asia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,906</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,398</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Citibank NA</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>362</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,595</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Lippo Bank</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,265</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,361</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Mega</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>689</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,321</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Buana Indonesia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,189</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Muamalat Indonesia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>601</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Niaga</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,884</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>498</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Danamon</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>114</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>324</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Bumi Putra Indonesia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>242</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Internasional Indonesia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>53</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>111,913</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>81,789</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign currencies</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    ABN AMRO Bank</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>95</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>54,575</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Citibank NA</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,416</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,737</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deutsche Bank</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>541</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,309</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Central Asia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>142</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Standard Chartered Bank</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>322</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>99</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Internasional Indonesia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    The Bank of Tokyo Mitsubishi</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,466</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>65,938</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total&nbsp;&#151; third parties</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>117,379</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>147,727</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total cash in banks</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>581,272</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>356,574</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-37

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 18pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="64%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Time deposits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Related parties</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rupiah</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Mandiri</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>794,371</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,510,009</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Negara Indonesia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>206,195</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>660,915</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Rakyat Indonesia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>231,805</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>246,415</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Tabungan Negara</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>75,960</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>132,455</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Syariah Mandiri</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,308,331</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,556,794</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign currencies</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Mandiri</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>293,115</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Negara Indonesia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>139,450</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>98</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Rakyat Indonesia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32,480</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>171,930</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>293,213</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total&nbsp;&#151; related parties</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,480,261</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,850,007</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third parties</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rupiah</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Citibank NA</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>310,100</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Standard Chartered Bank</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>698,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>177,800</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Niaga</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>102,787</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>109,565</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Mega</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>98,906</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>99,575</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Bukopin</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>98,710</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>89,255</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Jabar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>89,648</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>85,590</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Danamon</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>61,115</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>63,915</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank NISP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>53,650</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,680</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank BTPN</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>43,255</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Bumi Putra Indonesia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,303</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,643</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Syariah Mega Indonesia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Muamalat Indonesia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Yudha Bhakti</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Nusantara Parahyangan</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    ABN AMRO Bank</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,255,869</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,085,378</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-38

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="64%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign currencies</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deutsche Bank</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,051,839</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>873,772</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Citibank NA</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>202,883</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Standard Chartered Bank</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>225,208</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    The Hongkong and Shanghai Banking Corporation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>253,043</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,530,090</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,076,655</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total&nbsp;&#151; third parties</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,785,959</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,162,033</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total time deposits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,266,220</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,012,040</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total cash and cash equivalents</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,856,123</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,374,684</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Range of interest rates per annum for time deposits is as
follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="56%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="18%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rupiah</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.00%&#151;9.50%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.00%&#151;14.50%</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign currencies</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.55%&#151;1.95%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.60%&#151;&nbsp;3.70%</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The related parties which the Company places its funds are
Government-owned banks. The Company places a majority of its
cash and cash equivalents in these banks because they have the
most extensive branch network in Indonesia and are considered to
be financially sound banks as they are owned by the Government.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Refer to Note&nbsp;45 for details of related party transactions.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>7.&nbsp;</B></TD>
    <TD>
    <B>TRADE ACCOUNTS RECEIVABLE</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Trade accounts receivable from related parties and third parties
arise from services provided to both retail and non-retail
customers.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>a.&nbsp;<U>By Debtor</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Related parties:</I>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="75%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Government agencies</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>289,644</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>432,982</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    KSO Units</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>145,810</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>111,599</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT Citra Sari Makmur</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,127</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31,242</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT Patra Telekomunikasi Indonesia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,824</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,921</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT Aplikanusa Lintasarta</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,780</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>437</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Others</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,847</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35,464</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>484,032</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>614,645</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Allowance for doubtful accounts</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(64,928</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(84,275</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>419,104</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>530,370</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-39

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Trade accounts receivable from certain related parties are
presented net of the Company&#146;s liabilities to such parties
due to legal right of offset in accordance with agreements with
those parties.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Third parties:</I>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="73%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Residential and business subscribers</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,213,598</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,452,176</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Overseas international carriers</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>143,539</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>196,756</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,357,137</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,648,932</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Allowance for doubtful accounts</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(457,138</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(601,393</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,899,999</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,047,539</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>b.&nbsp;<U>By Age</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Related parties:</I>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="75%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Up to 6&nbsp;months</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>396,425</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>505,519</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    7 to 12&nbsp;months</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,947</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27,390</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    13 to 24&nbsp;months</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,659</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,574</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    More than 24&nbsp;months</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>53,001</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>56,162</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>484,032</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>614,645</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Allowance for doubtful accounts</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(64,928</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(84,275</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>419,104</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>530,370</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Third parties:</I>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="73%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Up to 3&nbsp;months</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,773,992</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,938,326</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    More than 3&nbsp;months</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>583,145</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>710,606</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,357,137</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,648,932</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Allowance for doubtful accounts</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(457,138</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(601,393</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,899,999</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,047,539</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-40

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>c.&nbsp;<U>By Currency</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Related parties</I>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="75%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rupiah</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>447,657</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>598,533</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    United States Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>36,375</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,112</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>484,032</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>614,645</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Allowance for doubtful accounts</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(64,928</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(84,275</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>419,104</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>530,370</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Third parties</I>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="73%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rupiah</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,198,875</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,444,914</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    United States Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>158,262</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>204,018</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,357,137</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,648,932</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Allowance for doubtful accounts</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(457,138</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(601,393</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,899,999</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,047,539</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>d.&nbsp;<U>Movements in the allowance for doubtful
    accounts</U></I></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="64%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Beginning balance</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>502,989</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>443,892</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>522,066</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Additions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>296,099</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>342,895</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>478,005</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bad debts write-off</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(355,196</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(264,721</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(314,403</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Ending balance</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>443,892</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>522,066</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>685,668</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Management believes that the allowance for doubtful receivables
is adequate to cover probable losses on uncollectible accounts.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Except for the amounts receivable from Government Agencies,
management believes that there are no significant concentrations
of credit risk on these receivables.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Refer to Note&nbsp;45 for details of related party transactions.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-41

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>8.&nbsp;</B></TD>
    <TD>
    <B>INVENTORIES</B></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="75%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Components</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>53,611</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,520</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Allowance for obsolescence</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(20,188</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,605</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,423</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41,915</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Modules</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>88,259</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>103,520</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Allowance for obsolescence</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(34,063</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(39,553</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>54,196</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>63,967</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SIM cards, RUIM cards and prepaid voucher blanks</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>115,948</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>114,634</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Allowance for obsolescence</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(482</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(189</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>115,466</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>114,445</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>203,085</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>220,327</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Movements in the allowance for obsolescence are as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="76%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Beginning balance</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>40,489</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>54,733</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Additions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,968</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Inventory write-off</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(556</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(17,354</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Ending balance</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>54,733</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>48,347</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Management believes that the allowance is adequate to cover
probable losses from decline in inventory value due to
obsolescence.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At December&nbsp;31, 2005, inventory held by a certain
subsidiary was insured against fire, theft and other specified
risks for US$0.6&nbsp;million. Management believes that the
insurance amount is adequate to cover such risks.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>9.&nbsp;</B></TD>
    <TD>
    <B>PREPAID EXPENSES</B></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="77%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rental</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>268,287</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>112,078</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Salary</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>218,329</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>289,632</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Frequency license</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>275,359</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Insurance</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>98,485</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>66,449</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Telephone directory issuance cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27,246</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,527</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,722</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,824</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>628,069</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>777,869</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-42

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>10.&nbsp;</B></TD>
    <TD>
    <B>OTHER CURRENT ASSETS</B></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="78%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Restricted time deposits&nbsp;&#151; Bank Mandiri</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44,608</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>159,537</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2004, the balance consists of the
Company&#146;s time deposits of US$4.6&nbsp;million
(Rp42,688&nbsp;million) pledged as collateral for credit
facility obtained by Napsindo (Note&nbsp;20c) and
Rp1,920&nbsp;million pledged as collateral for bank guarantees.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, the balance consists of the
Company&#146;s time deposits of US$13.6&nbsp;million
(Rp133,926&nbsp;million) and Rp25,611&nbsp;million pledged as
collateral for bank guarantees.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>11.&nbsp;</B></TD>
    <TD>
    <B>LONG-TERM INVESTMENTS</B></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="35%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>2004</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Percentage of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Opening</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Addition/</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Equity in</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Translation</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Ending</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Ownership</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Deduction)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Net Income</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Adjustment</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Equity method:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT Citra Sari Makmur</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>52,422</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,331</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,363</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>60,116</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT Patra Telekomunikasi Indonesia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,332</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,089</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,421</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT Pasifik Satelit Nusantara</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>43.69</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>63,754</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,420</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,363</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>72,537</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Cost method:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bridge Mobile Pte. Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,290</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,290</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT Batam Bintan Telekomunikasi</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>587</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>587</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT Pembangunan Telekomunikasi Indonesia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>199</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>199</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT Mandara Selular Indonesia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.63</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Medianusa Pte. Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>108</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(108</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>894</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,182</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,076</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>64,648</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,182</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,420</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,363</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82,613</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-43

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 24pt; ">

<TR style="font-size: 1pt;">
    <TD width="36%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Percentage of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Opening</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Equity in</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Translation</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Ending</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Ownership</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Addition</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Net Income</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Adjustment</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Balance</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Equity method:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT Citra Sari Makmur</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>60,116</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,480</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,658</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>66,254</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT Patra Telekomunikasi Indonesia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>40.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,421</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,399</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,070</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT Pasifik Satelit Nusantara</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>72,537</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,879</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,658</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>91,324</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Cost method:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bridge Mobile Pte. Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,290</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,290</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT Batam Bintan Telekomunikasi</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>587</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>587</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT Pembangunan Telekomunikasi Indonesia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>199</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>199</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT Mandara Selular Indonesia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.33</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,076</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,076</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82,613</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,879</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,658</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>101,400</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>a.&nbsp;<U>PT Citra Sari Makmur (&#147;CSM&#148;)</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
CSM is engaged in providing Very Small Aperture Terminal
(&#147;VSAT&#148;), network application services and consulting
services on telecommunications technology and related facilities.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2004 and 2005, the carrying amount of
investment in CSM was equal to the underlying equity in net
assets of CSM.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>b.&nbsp;<U>PT Patra Telekomunikasi Indonesia
    (&#147;Patrakom&#148;)</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Patrakom is engaged in providing satellite communication system
services and related services and facilities to companies in the
petroleum industry.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On August&nbsp;26, 2005, the Company purchased 10% of
Patrakom&#146;s outstanding shares from Indosat for
Rp4,250&nbsp;million, thereby increasing the Company&#146;s
ownership interest from 30% to 40%.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2004 and 2005, the carrying amount of
investment in Patrakom was approximate to the underlying equity
in net assets of Patrakom.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>c.&nbsp;<U>PT Pasifik Satelit Nusantara
    (&#147;PSN&#148;)</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
PSN is engaged in providing satellite transponder leasing and
satellite-based communication services in the Asia Pacific
region.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2001, the Company&#146;s share of losses
in PSN has exceeded the carrying amount of the investment.
Accordingly, the investment has been reduced to zero.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On August&nbsp;8, 2003, as a result of share-swap transaction
with CPSC, the Company&#146;s interest in PSN effectively
increased to 43.69%. The Company decided to increase its
ownership interest in PSN as
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-44

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
part of the share-swap transactions that was premised on the
Company&#146;s assessment that PSN&#146;s satellite services
will allow it to capitalize on a government program which calls
for the provision of telecommunication services to remote areas
of Indonesia.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2005, the Company&#146;s ownership interest was diluted to
35.5% as a result of debt to equity conversions consummated by
PSN.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>d.&nbsp;<U>Bridge Mobile Pte. Ltd</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On November&nbsp;3, 2004, Telkomsel together with six other
international mobile operators in Asia Pacific established
Bridge Mobile Pte. Ltd. (Singapore), a company that is engaged
in providing regional mobile services in the Asia Pacific region.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telkomsel contributed US$1.0&nbsp;million (Rp9,290&nbsp;million)
which represents a 14.286% ownership interest.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On April&nbsp;14, 2005, Telkomsel&#146;s ownership interest was
diluted to 12.50% following issuance of new shares by Bridge
Mobile Pte. Ltd to a new stockholder.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>e.&nbsp;<U>PT Batam Bintan Telekomunikasi
    (&#147;BBT&#148;)</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
BBT is engaged in providing fixed line telecommunication
services at Batamindo Industrial Park in Muka Kuning, Batam
Island and at Bintan Beach International Resort and Bintan
Industrial Estate in Bintan Island.
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>f.&nbsp;<U>PT Pembangunan Telekomunikasi Indonesia
    (&#147;Bangtelindo&#148;)</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Bangtelindo is primarily engaged in providing consultancy
services on the installation and maintenance of
telecommunications facilities.
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>g.&nbsp;<U>PT Mandara Selular Indonesia
    (&#147;Mobisel&#148;)</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mobisel is engaged in providing mobile cellular services and
related facilities. These services were previously provided by
the Company under a revenue-sharing arrangement with PT Rajasa
Hazanah Perkasa (&#147;RHP&#148;). The capital contribution made
by the Company of Rp10,398&nbsp;million represented a 25% equity
ownership in Mobisel.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2002, the value of investment has been
reduced to zero because the Company&#146;s share of loss
exceeded the carrying amount of investment in Mobisel.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In July 2003 and January 2004, Mobisel carried out a series of
debt to equity conversions resulting in dilution of the
Company&#146;s ownership interest to 6.4%.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;20, 2004, Mobisel&#146;s stockholders agreed to
issue 306,000,000 new Series&nbsp;B shares to a new stockholder
and an existing stockholder. The issuance of 306,000,000 new
Series&nbsp;B shares resulted in dilution of the Company&#146;s
interest in Mobisel to 3.63%
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On May&nbsp;27, 2005, the Company&#146;s ownership interest was
further diluted to 1.33% following the issuance of 1,179,418,253
new Series&nbsp;B shares by Mobisel.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-45

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On January&nbsp;13, 2006, the Company sold its entire ownership
interest in Mobisel to Twinwood Ventures Limited (third party)
for Rp22,561&nbsp;million (Note&nbsp;53). The resulting gain on
the sale was not significant to the consolidated statement of
income.
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>h.&nbsp;<U>Medianusa Pte. Ltd.</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Medianusa Pte. Ltd. is an associated company of Infomedia, which
is engaged as a sales agent, in search of advertisers for
telephone directories. On November&nbsp;30, 2004, Infomedia sold
its entire ownership in Medianusa Pte. Ltd. for
SGD0.024&nbsp;million (Rp135&nbsp;million). The results of
operations of Medianusa Pte. Ltd. and the gain on this sale was
not significant to the Company&#146;s consolidated statement of
income.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On August&nbsp;8, 2003, the Company and PT Centralindo
Pancasakti Cellular (&#147;CPSC&#148;) signed a share-swap
agreement (&#147;KMT-IP share-swap transaction&#148;) in which
the Company delivered its 14.20%&nbsp;outstanding shares in PT
Komunikasi Selular Indonesia (&#147;Komselindo&#148;), its
20.17%&nbsp;outstanding shares in PT Metro Selular Nusantara
(&#147;Metrosel&#148;), and its 100%&nbsp;outstanding shares in
PT Telekomindo Selular Raya (&#147;Telesera&#148;) to CPSC. In
return, CPSC delivered its 30.58%&nbsp;outstanding shares in PT
Indonusa Telemedia (&#147;Indonusa&#148;),
21.12%&nbsp;outstanding shares in PT Pasifik Satelit Nusantara
(&#147;PSN&#148;) and paid cash of Rp5,398&nbsp;million to the
Company.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
From the KMT&nbsp;&#151; IP share-swap transaction, the Company
recognized a loss of Rp47,307&nbsp;million being the difference
between the fair value of assets received and the carrying
amount of the Company&#146;s investments given to CPSC, and
reversal of difference due to change of equity in Metrosel
previously recognized directly in equity.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-46

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>12.&nbsp;</B></TD>
    <TD>
    <B>PROPERTY, PLANT AND EQUIPMENT</B></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="21%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>January&nbsp;1,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>KSO IV</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Acquisitions</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Additions</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Deductions</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Reclassifications</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>At cost or revalued amounts:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Direct acquisitions</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Land</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>298,964</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,212</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(156</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,681</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>327,339</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Buildings</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,819,095</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,021</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,722</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(14,448</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>328,665</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,170,055</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Switching equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,473,392</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>616,769</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>209,463</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(52,829</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(886,695</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,360,100</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Telegraph, telex and data communication equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>199,314</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,071</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(14</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,484</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>213,855</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Transmission installation and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,818,179</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>271,678</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>245,170</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(573,950</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,161,066</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,922,143</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Satellite, earth station and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,209,827</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30,998</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(165,130</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,720,892</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,354,803</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cable network</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,488,797</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,427,049</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>195,947</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(44,651</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>633,932</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,701,074</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Power supply</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,149,458</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,644</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,784</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,116</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,940</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,194,710</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Data processing equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,252,667</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32,012</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>469,470</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11,671</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44,263</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,786,741</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other telecommunications peripherals</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>735,188</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>62,550</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,872</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30,768</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>824,634</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Office equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>660,491</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>102</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32,513</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,470</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(22,970</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>661,666</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Vehicles</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>187,853</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,859</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,972</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(9,285</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>191,403</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>107,573</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,855</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(71</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,269</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>112,626</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Property under construction:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Buildings</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>54,888</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46,137</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(47,613</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>53,412</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Switching equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>158,056</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>57,033</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(215,089</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Transmission installation and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>93,907</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,067,293</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,986,069</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>175,131</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Satellite, earth station and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>607,172</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>234,354</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(64,627</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>776,899</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cable network</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,524</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,006,243</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,995,259</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,508</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Power supply</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>106</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,953</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(24,990</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>69</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Data processing equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,526</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30,065</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(23,910</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,681</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other telecommunications peripherals</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,483</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,594</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(27,077</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-47

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="24%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>January&nbsp;1,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>KSO IV</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Acquisitions</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Additions</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Deductions</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Reclassifications</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Leased assets</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Vehicles</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>239</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>163</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>413</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>58,356,699</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,377,134</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,820,410</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(890,663</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>205,682</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>68,869,262</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Accumulated depreciation:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Direct acquisitions</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Buildings</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>812,319</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>136,083</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11,209</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,445</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>952,638</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Switching equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,266,488</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>748,667</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(36,795</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(377,087</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,601,273</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Telegraph, telex and data communication equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>194,249</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>853</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(791</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,342</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>198,653</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Transmission installation and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,956,895</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,747,743</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(513,618</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,017,239</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,208,259</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Satellite, earth station and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,158,379</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>199,729</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(165,075</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(660,751</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,532,282</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cable network</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,613,281</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,560,387</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(33,777</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>95,770</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,235,661</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Power supply</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>797,925</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>108,436</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,642</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,061</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>904,780</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Data processing equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,469,816</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>680,399</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11,221</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(26,173</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,112,821</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other telecommunications peripherals</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>572,190</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>75,248</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,664</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>68,804</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>712,578</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Office equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>497,467</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>68,822</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,291</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,759</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>562,757</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Vehicles</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>173,134</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,730</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,224</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,224</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>180,864</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>69,302</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,469</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(71</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,827</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>94,527</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Leased assets</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Vehicles</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>114</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(77</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>70</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23,581,559</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,355,599</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(797,378</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>157,383</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,297,163</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net Book Value</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,775,140</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39,572,099</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-48

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 18pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>January&nbsp;1,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Write-down of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Additions</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Assets</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Deductions</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Reclassifications</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>At cost or revalued amounts:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Direct acquisitions</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Land</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>327,339</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30,444</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(22,104</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,232</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>334,447</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Buildings</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,170,055</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>65,622</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,553</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>336,435</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,567,559</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Switching equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,360,100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>324,748</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(13,547</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>158,580</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,829,881</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Telegraph, telex and data communication equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>213,855</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,410</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(120</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(353</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>215,792</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Transmission installation and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,922,143</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>846,944</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(28,747</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,813,794</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31,554,134</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Satellite, earth station and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,354,803</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>697,304</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(427,836</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,319,733</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,944,004</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cable network</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,701,074</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>868,823</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(20,853</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>148,456</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,697,500</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Power supply</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,194,710</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,492</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,198</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>51,391</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,312,395</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Data processing equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,786,741</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>261,442</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,132</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,800,322</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,842,373</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other telecommunications peripherals</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>824,634</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>69,469</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,675</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,723</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>904,151</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Office equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>661,666</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>69,501</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,772</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(79,457</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>649,938</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Vehicles</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>191,403</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>975</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,090</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(905</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>186,383</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>112,626</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,923</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>115,544</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Property under construction:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Buildings</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>53,412</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>235,354</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(266,991</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,775</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Switching equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,172</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,172</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Transmission installation and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>175,131</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,518,740</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,979,472</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>714,399</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Satellite, earth station and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>776,899</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(776,766</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>133</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cable network</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,508</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>213</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(21,950</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,771</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Power supply</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>69</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,711</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,719</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>61</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Data processing equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,681</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,167,465</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(616,886</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,567,260</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other telecommunications peripherals</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37,825</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(34,301</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,524</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-49

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="18%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>January&nbsp;1,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Write-down of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Additions</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Assets</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Deductions</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Reclassifications</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Leased assets</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Vehicles</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>413</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(83</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>330</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Transmission installation and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>257,380</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>257,380</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>68,869,262</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,552,957</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(543,627</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>857,314</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82,735,906</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Accumulated depreciation and impairment:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Direct acquisitions</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Buildings</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>952,638</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>143,894</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,789</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,095</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,109,838</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Switching equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,601,273</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>766,155</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(13,547</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>118,711</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,472,592</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Telegraph, telex and data communication equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>198,653</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(120</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(10</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>201,527</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Transmission installation and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,208,259</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,281,208</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>552,828</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(15,239</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(35,774</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,991,282</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Satellite, earth station and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,532,282</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>220,658</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(427,836</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(19,043</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,306,061</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cable network</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,235,661</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,019,324</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(21,012</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>97,771</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,331,744</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Power supply</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>904,780</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>84,438</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,198</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,170</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,032,190</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Data processing equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,112,821</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>796,921</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,132</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,521</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,938,131</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other telecommunications peripherals</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>712,578</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>76,882</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,675</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,198</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>793,983</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Office equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>562,757</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>43,274</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,562</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(61,331</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>543,138</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Vehicles</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>180,864</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,758</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,089</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(932</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>179,601</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>94,527</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,042</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>101,564</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Leased assets</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Vehicles</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(65</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>70</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Transmission installation and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27,002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>63,940</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>90,942</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,297,163</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,474,625</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>616,768</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(505,199</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>209,306</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37,092,663</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net Book Value</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39,572,099</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>45,643,243</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="78%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Proceeds from sale of property, plant and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>67,196</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>84,621</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net book value</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>93,285</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38,428</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    (Loss) gain on disposal</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(26,089</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46,193</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-50

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In accordance with the amended and restated KSO agreement with
MGTI (Note&nbsp;5d), ownership rights to the acquired property,
plant and equipment in KSO IV are legally retained by MGTI until
the end of the KSO period (December&nbsp;31, 2010). As of
December&nbsp;31, 2004 and 2005, the net book value of these
property, plant and equipment was Rp2,000,073&nbsp;million and
Rp1,469,700&nbsp;million, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2004 and 2005, the net book value of
property, plant and equipment included in the Company&#146;s
property, plant and equipment that are utilized by the KSO
amounted to Rp449,016&nbsp;million and Rp356,658&nbsp;million,
respectively. The legal ownership of these property, plant and
equipment are still retained by the Company.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the first quarter of 2005, the Government, in its efforts to
rearrange the frequency spectra utilized by the
telecommunications industry, issued a series of regulations
which resulted in the Company not being able to utilize certain
frequency spectra it currently uses to support its fixed
wireline cable network commencing at the end of 2006. As a
result of these regulations, certain of the Company&#146;s cable
network facilities within the fixed wireline segment, which
comprise primarily of Wireless Local Loop (&#147;WLL&#148;) and
Approach Link equipment operating in the affected frequency
spectra, can no longer be used commencing at the end of 2006.
Accordingly, the Company has shortened its estimate of the
remaining useful lives for WLL and Approach Link equipment in
the first quarter of 2005 and begun depreciating the then
remaining net book value of those assets through
December&nbsp;31, 2006. The effect of this change in estimate
increased depreciation expense by Rp471,187&nbsp;million
(Rp329,831&nbsp;million after tax) in 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Further, on August&nbsp;31, 2005, the Minister of Communication
and Information (&#147;MoCI&#148;) issued a press release which
announced that in order to conform with the international
standards and as recommended by the International
Telecommunications Union&nbsp;&#151; Radiocommunication Sector
<FONT style="white-space: nowrap">(&#147;ITU-R&#148;),</FONT>
the 1900&nbsp;MHz frequency spectrum would only be used for the
International Mobile Telecommunications-2000
(&#147;IMT-2000&#148; or &#147;3-G&#148;) network. The MoCI also
announced that the CDMA-based technology network which the
Company uses for its fixed wireless services can only operate in
the 800&nbsp;MHz frequency spectrum. At present, the Company
utilizes the 1900&nbsp;MHz frequency spectrum for its fixed
wireless network in Jakarta and West Java areas while for other
areas, the Company utilizes the 800&nbsp;MHz frequency spectrum.
As a result of the Government&#146;s decision, the
Company&#146;s Base Station System (&#147;BSS&#148;) equipment
in Jakarta and West Java areas which are part of transmission
installation and equipment for fixed wireless network can no
longer be used commencing at the end of 2007. Management expects
the BSS equipment will be completely replaced with BSS equipment
operating in 800&nbsp;MHz by the end of June 2007. On
January&nbsp;13, 2006, the MoCI issued MoCI
Regulation&nbsp;No.&nbsp;01/ PER/ M.KOMINFO/1/2006 which
reaffirmed the Government&#146;s decision that the
Company&#146;s fixed wireless network can only operate in the
800&nbsp;MHz frequency spectrum and that the 1900&nbsp;MHz is
allocated for 3-G network.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Following the Government&#146;s decisions, the Company reviewed
the recoverable amount of cash-generating unit to which the
affected fixed wireless asset belongs. The recoverable amount
was estimated using value in use which represents the present
value of estimated future cash flows from cash-generating unit
using a pretax discount rate of 16.89%, representing the
Company&#146;s weighted average cost of capital as of
December&nbsp;31, 2005. In determining cash-generating unit to
which an asset belongs, assets are grouped at the lowest level
that includes the asset and generates cash inflows that are
largely independent of the cash inflows from other assets or
group of assets. Based on this review, in 2005, the Company
recognized a write-down of Rp616,768&nbsp;million related to
transmission installa-
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-51

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
tion and equipment of fixed wireless assets and recorded this
amount as a component of operating expenses in the consolidated
statement of income. In addition, the Company recognized a loss
relating to non-cancelable contracts for procurement of the
1900&nbsp;MHz transmission installation and equipment in Jakarta
and West Java areas amounting to Rp79,359&nbsp;million. The loss
was included as a component of operating expenses in the
consolidated statement of income with a corresponding liability
included in &#147;Accrued Expenses&#148; in the consolidated
balance sheet. In addition, the Company changed its estimate of
the remaining useful lives for the Jakarta and West Java BSS
equipment and depreciates the remaining net book value of these
assets through June 30, 2007. The effect of this change in
estimate increased depreciation expense by
Rp159,042&nbsp;million (Rp111,329&nbsp;million after tax) in
2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On August&nbsp;18, 2005, the Company disposed of its Palapa B-4
satellite which had been fully depreciated as of July&nbsp;1,
1999. On November&nbsp;17, 2005, the Company&#146;s Telkom-2
satellite was launched, and on December&nbsp;20, 2005, the
Telkom-2 satellite passed the final acceptance test and was put
into service.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, the Company operated two
satellites which primarily provide backbone transmission links
for its network and earth station satellite up-linking and
down-linking services to domestic and international users. As of
December&nbsp;31, 2005, there were no events or changes in
circumstances that would indicate that the carrying amount of
the Company&#146;s satellites may not be recoverable.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Interest capitalized to property under construction amounted to
Rp22,925&nbsp;million, Rp57,690&nbsp;million and nil in 2003,
2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Foreign exchange losses capitalized as part of property under
construction amounted to nil, Rp74,283&nbsp;million and nil in
2003, 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company and its subsidiaries own several pieces of land
located throughout Indonesia with Building Use Rights (Hak Guna
Bangunan or HGB) for a period of 20-30&nbsp;years, which will
expire between 2006-2035 . Management believes that there will
be no difficulty in obtaining the extension of the landrights
when they expire.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Some of the Company&#146;s land, on which the Company was
granted the right to use by the Ministry of Communications of
the Republic of Indonesia (formerly Ministry of Tourism, Post
and Telecommunications), is still under the name of the Ministry
of Tourism, Post and Telecommunications and the Ministry of
Communications of the Republic of Indonesia. The transfer to the
Company of the legal title of ownership on those parcels of land
is still in progress.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, property, plant and equipment of
the Company and subsidiaries, except for land, were insured with
various insurance companies against fire, theft and other
specified risks for a coverage of Rp22,375,819&nbsp;million plus
US$2,988&nbsp;million. In addition, the Telkom-1 and Telkom-2
satellites are insured for US$48.2&nbsp;million and
US$143.3&nbsp;million, respectively. Management believes that
the insurance coverage is adequate.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;26, 2004, telecommunication facilities of the
Company and its subsidiaries in Banda Aceh and certain areas
nearby in Nanggroe Aceh Darussalam with net book value of
Rp54,863&nbsp;million were destroyed by earthquake and tsunami.
For the year ended December&nbsp;31, 2004, the Company has
recorded the loss in &#147;Other income (expenses)&#148; in the
consolidated statements of income. These telecommunication
facilities were covered by insurance. In 2005, the Company and
its subsidiaries have
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-52

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
received a portion of its insurance claims amounting to
Rp27,580&nbsp;million and recorded this amount in &#147;Other
income (expenses)&#148; in the consolidated statements of income.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Certain property, plant and equipment of the Company and
subsidiaries have been pledged as collateral for lending
agreements (Notes&nbsp;20 and 24).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, the Company has lease commitments
for certain transmission installation and equipment, and
vehicles with the option to purchase the leased assets at the
end of the lease terms. Future minimum lease payments for the
assets under capital leases as of December&nbsp;31, 2005 are as
follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="85%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Year</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rupiah</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2006</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,443</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2007</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,443</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2008</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,443</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2009</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,443</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2010</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,443</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Thereafter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>142,775</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total minimum lease payments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>509,990</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(258,252</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net present value of minimum lease payments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>251,738</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current maturities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(16,201</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term portion</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>235,537</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-53
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>13.&nbsp;</B></TD>
    <TD>
    <B>PROPERTY, PLANT AND EQUIPMENT UNDER REVENUE-SHARING
    ARRANGEMENTS</B></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="29%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>January&nbsp;1,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Additions</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Deductions</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Reclassifications</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>At cost:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Land</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,160</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>222</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,382</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Buildings</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,255</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,058</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,422</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Switching equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>537,890</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,473</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(132,226</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>418,137</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Transmission installation and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>93,028</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>200,251</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(34,160</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>259,119</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cable network</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>318,381</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>117,228</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(39,469</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>396,140</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other telecommunications peripherals</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>123,972</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>234</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(20,709</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>103,497</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,096,686</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>330,633</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(233,622</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,193,697</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Accumulated depreciation:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Land</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,449</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>152</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,601</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Buildings</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,804</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>802</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,529</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,077</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Switching equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>341,525</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,757</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(90,160</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>286,122</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Transmission installation and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>89,720</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,406</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(34,160</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>68,966</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cable network</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>225,175</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,817</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(31,475</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>227,517</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other telecommunications peripherals</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>123,972</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(20,709</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>103,287</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>791,645</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82,958</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(180,033</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>694,570</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Net Book Value</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>305,041</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>499,127</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-54

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 18pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="29%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>January&nbsp;1,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Additions</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Deductions</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Reclassifications</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>At cost:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Land</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,382</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,428</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Buildings</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,422</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>338</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,739</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,021</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Switching equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>418,137</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,419</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(168,521</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>275,035</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Transmission installation and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>259,119</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>36,214</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11,895</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>283,438</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cable network</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>396,140</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,629</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(141,356</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>268,413</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other telecommunications peripherals</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>103,497</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>126,187</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(60,380</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>169,304</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,193,697</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>201,833</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(387,891</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,007,639</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Accumulated depreciation:</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Land</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,601</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>170</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,771</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Buildings</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,077</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>480</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,191</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,366</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Switching equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>286,122</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,421</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(125,854</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>185,689</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Transmission installation and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>68,966</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,223</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11,895</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>83,294</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cable network</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>227,517</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,257</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(134,648</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>114,126</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other telecommunications peripherals</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>103,287</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,563</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(56,862</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>68,988</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>694,570</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>96,114</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(332,450</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>458,234</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Net Book Value</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>499,127</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>549,405</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In accordance with revenue-sharing arrangements agreements,
ownership 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.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The unearned income on revenue-sharing arrangements is as
follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="73%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Gross amount</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,193,697</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,007,639</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accumulated amortization:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Beginning balance</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(984,954</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(833,365</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Addition (Note&nbsp;35)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(82,033</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(136,681</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deduction</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>233,622</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>387,891</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Ending balance</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(833,365</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(582,155</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>360,332</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>425,484</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-55

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>14.&nbsp;</B></TD>
    <TD>
    <B>ADVANCES AND OTHER NON-CURRENT ASSETS</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Advances and other non-current assets consist of:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="75%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Prepaid rental, non-current portion</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>428,564</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Advances for purchase of property, plant and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,070,065</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>253,123</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Security deposits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28,345</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30,570</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Restricted cash</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>114,202</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>90,749</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred landrights charges</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>93,843</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>87,863</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Others</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>65,896</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>55,168</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,372,351</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>946,037</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2004<B>, </B>restricted cash represents
time deposits with original maturities of more than one year
held by the Company and its subsidiaries and are pledged as
collateral for bank guarantees.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, restricted cash represents cash
received from the Government relating to compensation for early
termination of exclusive rights (Note&nbsp;29) and time deposits
with original maturities of more than one year pledged as
collateral for bank guarantees.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Deferred landrights charges represent costs to extend the
contractual life of the landrights which are deferred and
amortized over the new contractual life.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>15.&nbsp;</B></TD>
    <TD>
    <B>GOODWILL AND OTHER INTANGIBLE ASSETS</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The changes in the carrying amount of goodwill and other
intangible assets for the years ended December&nbsp;31, 2004 and
2005 are as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="57%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Intangible</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Goodwill</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Assets</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Gross carrying amount:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance as of December&nbsp;31, 2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>106,348</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,011,406</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,117,754</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Addition&nbsp;&#151; acquisition of Dayamitra (Note&nbsp;5a)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>231,477</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>231,477</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Addition&nbsp;&#151; acquisition of KSO IV (Note&nbsp;5d)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>908,228</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>908,228</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance as of December&nbsp;31, 2004</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>106,348</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,151,111</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,257,459</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accumulated amortization:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance as of December&nbsp;31, 2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(54,951</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(918,753</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(973,704</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization expense for 2004</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(21,270</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(851,060</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(872,330</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance as of December&nbsp;31, 2004</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(76,221</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,769,813</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,846,034</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net book value</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30,127</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,381,298</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,411,425</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Weighted-average amortization period</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5&nbsp;years</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.97&nbsp;years</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-56

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 18pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="58%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Other</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Intangible</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Goodwill</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Assets</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Gross carrying amount as of December&nbsp;31, 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>106,348</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,151,111</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,257,459</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accumulated amortization:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance as of December&nbsp;31, 2004</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(76,221</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,769,813</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,846,034</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization expense for 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(21,270</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(896,883</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(918,153</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance as of December&nbsp;31, 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(97,491</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,666,696</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,764,187</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net book value</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,857</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,484,415</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,493,272</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Weighted-average amortization period</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5&nbsp;years</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.97&nbsp; years</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Other intangible assets resulted from the acquisitions of
Dayamitra, Pramindo, AWI and KSO IV, and represent the rights to
operate the business in the KSO areas (Note&nbsp;5). Goodwill
resulted from the acquisition of GSD (Note&nbsp;1c).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The estimated annual amortization expense relating to goodwill
for the year ending December&nbsp;31, 2006 is
Rp8,857&nbsp;million. The estimated annual amortization expense
relating to other intangible assets for each of the next five
years beginning from January&nbsp;1, 2006 is
Rp896,883&nbsp;million per year.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>16.&nbsp;</B></TD>
    <TD>
    <B>ESCROW ACCOUNTS</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Escrow accounts consist of the following:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="78%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Citibank N.A., Singapore</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30,059</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>126,128</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Mandiri</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,222</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,369</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>36,281</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>132,497</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>a.&nbsp;<U>Citibank N.A., Singapore</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This escrow account with Citibank N.A., Singapore
(&#147;Dayamitra Escrow Agent&#148;) was established to
facilitate the payment of the Company&#146;s obligations under
the Conditional Sale and Purchase Agreement and Option Agreement
entered into with the selling stockholders of Dayamitra
(Note&nbsp;5a).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2004, the Company has repaid the entire obligations under the
Conditional Sale and Purchase Agreement, and since then this
escrow account is used to facilitate the payment of the
Company&#146;s obligations under the Option Agreement with TMC.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The escrow account earns interest at LIBOR minus 0.75%&nbsp;per
annum, which is computed on a daily basis. The interest income
earned is included as part of the escrow funds. The remaining
funds available will be transferred to the Company after all of
the obligations related to the Dayamitra transaction are
satisfied.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-57

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>b.&nbsp;<U>Bank Mandiri</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The escrow account with Bank Mandiri was established by
Dayamitra in relation with the credit facilities from Bank
Mandiri (Note&nbsp;24e).
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>17.&nbsp;</B></TD>
    <TD>
    <B>TRADE ACCOUNTS PAYABLE</B></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="70%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Related parties</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Payables to other telecommunications carriers</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>196,127</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>99,980</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Concession fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>254,665</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>648,950</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Purchases of equipment, materials and services</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>192,302</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>265,459</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>643,094</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,014,389</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third parties</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Purchases of equipment, materials and services</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,366,320</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,011,444</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Payables related to revenue-sharing arrangements</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>220,158</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>106,195</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Payables to other telecommunication providers</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,978</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>163,646</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,611,456</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,281,285</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,254,550</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,295,674</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Trade accounts payable by currency are as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="73%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rupiah</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,613,715</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,112,303</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>638,861</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,381,473</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Euro</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>796,343</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Japanese Yen</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>715</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,508</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Great Britain Pound Sterling</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,092</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Singapore Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>147</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Myanmar KYAT</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,254,550</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,295,674</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Refer to Note&nbsp;45 for details of related party transactions.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-58

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>18.&nbsp;</B></TD>
    <TD>
    <B>ACCRUED EXPENSES</B></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="73%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Salaries and benefits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>321,237</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>452,413</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operations, maintenance and telecommunications services</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>324,329</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>411,075</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    General, administrative and marketing</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>242,597</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>444,101</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest and bank charges</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>163,203</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>134,299</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss on procurement commitments (Note&nbsp;12)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>79,359</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,051,366</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,521,247</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>19.&nbsp;</B></TD>
    <TD>
    <B>UNEARNED INCOME</B></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="73%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Prepaid pulse reload vouchers</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,017,530</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,582,762</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other telecommunication services</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,669</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,917</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,801</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,039</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,030,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,592,718</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>20.&nbsp;</B></TD>
    <TD>
    <B>SHORT-TERM BANK LOANS</B></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="75%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Central Asia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>455,700</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>170,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    ABN AMRO Bank</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>604,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Mandiri</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41,433</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Niaga</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,800</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,101,633</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>173,800</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>a.&nbsp;<U>Bank Central Asia</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;27, 2004, the Company entered into a loan
agreement with Bank Central Asia for a short-term loan with a
maximum facility of US$49.0&nbsp;million. The facility was
unsecured and bore interest at a rate equal to the
<FONT style="white-space: nowrap">1-month</FONT> LIBOR plus
2.85% (i.e. 5.27% as of December&nbsp;31, 2004). Principal
outstanding as of December&nbsp;31, 2004 amounted to
Rp455,700&nbsp;million (US$49.0&nbsp;million). On April&nbsp;15,
2005, the loan was repaid in full and the loan agreement was
terminated.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;3, 2004, Telkomsel entered into a loan
agreement with Deutsche Bank AG, Jakarta (as
&#147;Arranger&#148; and &#147;Agent&#148;) and Bank Central
Asia (as &#147;Lender&#148; and &#147;Transferor&#148;) with a
total facility of Rp170,000&nbsp;million. Under the agreement,
the Lender may transfer its rights, benefits and obligations to
any bank or financial institution by delivering the Transfer
Agreement to the Agent and notifying Telkomsel. The facility
bears interest at a rate equal to the
<FONT style="white-space: nowrap">3-month</FONT> Certificates of
Bank Indonesia plus 1% (i.e. 13.09% as of December&nbsp;31,
2005) payable in arrears. The loan is due on February&nbsp;1,
2006. As of December&nbsp;31, 2004 and 2005, the principal
outstanding amounted to nil and
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-59

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Rp170,000&nbsp;million, respectively. On February&nbsp;1, 2006,
Telkomsel repaid the entire loan balance and the loan agreement
was terminated.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>b.&nbsp;<U>ABN AMRO Bank</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On January&nbsp;28, 2004, the Company signed a short-term loan
agreement with ABN AMRO Bank N.V., Jakarta Branch for a facility
of US$129.7&nbsp;million. The loan was used to settle the
outstanding promissory notes at March&nbsp;15, 2004 which were
issued for the acquisition of Pramindo (Note&nbsp;5b). The
principal and interest were payable in 10&nbsp;monthly
installments from March 2004 to December 2004. The loan bore
interest at a rate equal to the LIBOR plus 2.75%. As of
December&nbsp;31, 2004, the loan was repaid in full and the loan
agreement was terminated on January&nbsp;6, 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;21, 2004, the Company entered into a loan
agreement with ABN AMRO Bank N.V. for a short-term loan with a
maximum facility of US$65.0&nbsp;million. The loan principal of
US$30.0&nbsp;million and US$35.0&nbsp;million was due on
March&nbsp;31, 2005 and June&nbsp;30, 2005, respectively. The
loan was unsecured and bore interest at a rate equal to the
<FONT style="white-space: nowrap">3-month</FONT>
U.S.&nbsp;Dollar LIBOR plus 2.5% (5.02% as of December&nbsp;31,
2004). Principal outstanding as of December&nbsp;31, 2004 was
Rp604,500&nbsp;million (US$65.0&nbsp;million). On March&nbsp;31,
2005 and June&nbsp;30, 2005, principal repayments of
US$30.0&nbsp;million and US$35.0&nbsp;million, respectively,
were made in accordance with the loan agreement. On
June&nbsp;30, 2005, the loan agreement was terminated.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>c.&nbsp;<U>Bank Mandiri</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On August&nbsp;28, 2001, Napsindo entered into a loan agreement
with Bank Mandiri for a facility of US$1.8&nbsp;million for a
one-year term. The loan is secured with the Company&#146;s time
deposits (Note&nbsp;10) with interest rate at 2% above the
pledged time deposits interest rate (2.65% as of
December&nbsp;31, 2004). The loan facility has been extended
several times, the most recent of which was on
September&nbsp;23, 2004 where the loan facility was extended for
another one-year term and expired on August&nbsp;28, 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On April&nbsp;24, 2003, Napsindo also entered into a loan
agreement with Bank Mandiri for a facility of
US$2.7&nbsp;million for a one-year term. On May&nbsp;4, 2004,
the facility was extended for another one year term and expired
on April&nbsp;24, 2005. The loan was secured by the
Company&#146;s time deposits (Note&nbsp;10) and bore interest at
2% above the pledged time deposits interest rate (2.65% as of
December&nbsp;31, 2004).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2004, principal outstanding under these
facilities amounted to US$4.5&nbsp;million
(Rp41,433&nbsp;million). On July&nbsp;29, 2005, the
Company&#146;s time deposits pledged for these facilities were
used to repay the principal outstanding and on August&nbsp;1,
2005, the loan agreements were terminated.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>d.&nbsp;<U>Bank Niaga</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On April&nbsp;25, 2005, Balebat entered into a loan agreement
with Bank Niaga for a total facility of Rp2,400&nbsp;million
comprising of revolving credit facility of Rp800&nbsp;million
which bears interest at 12%&nbsp;per annum and matured on
July&nbsp;25, 2005. This loan agreement also included an
investment credit facility of Rp1,600&nbsp;million which is
discussed in Note&nbsp;24f. On July&nbsp;26, 2005, the interest
rate and maturity date for revolving credit facility was amended
to 12.5%&nbsp;per annum and May&nbsp;30, 2006, respectively. The
total credit facility of Rp2,400&nbsp;million is secured by
Balebat&#146;s property located in West Java. As of
December&nbsp;31, 2005, the principal outstanding amounted to
Rp800&nbsp;million.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-60

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On October&nbsp;18, 2005, GSD entered into a loan agreement with
Bank Niaga for a maximum facility of Rp3,000&nbsp;million for a
one-year term. The loan facility is secured by certain
GSD&#146;s property, bears interest at 14.5%&nbsp;per annum and
will expire on October&nbsp;18, 2006. As of December&nbsp;31,
2005, the principal outstanding amounted to Rp3,000&nbsp;million.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>e.&nbsp;<U>The Hongkong and Shanghai Banking Corporation
    (&#147;HSBC&#148;)</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;20, 2004, the Company entered into a revolving
loan agreement with HSBC for a maximum facility of
Rp500,000&nbsp;million. The facility was available for
withdrawal until January&nbsp;20, 2005 and any amount drawn down
under this facility was payable within 6&nbsp;months from the
withdrawal date. The facility bore interest at a rate equal to
one-month Certificate of Bank Indonesia plus 1% on the amount
drawn down and was payable at the maturity date of the loan.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On March&nbsp;28, 2005, the maximum facility was amended to
provide principal of Rp100,000&nbsp;million with interest rate
at one-month Certificate of Bank Indonesia plus 1%, and
US$49.0&nbsp;million with interest rate at LIBOR plus 1.8%.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On January&nbsp;20, 2005 and April&nbsp;14, 2005, the Company
drew down Rp100,000&nbsp;million and US$49.0&nbsp;million,
respectively. As of October&nbsp;14, 2005, the loan has been
fully repaid and the loan agreement was terminated.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>21.&nbsp;</B></TD>
    <TD>
    <B>MATURITIES OF LONG-TERM LIABILITIES</B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>a.&nbsp;<U>Current maturities</U></I></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="66%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Notes</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Two-step loans</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>655,422</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>569,278</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Medium-term Notes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23b</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>468,976</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>144,510</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank loans</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>602,516</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>634,542</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Liabilities of business acquisitions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>573,908</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>862,394</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Obligations under capital leases</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,201</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,300,822</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,226,925</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>b.&nbsp;<U>Long-term portion</U></I></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="33%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>(In billions of Rupiah)</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Notes</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2007</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2008</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2009</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2010</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Thereafter</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Two-step loans</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,760.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>497.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>455.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>441.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>418.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,948.1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bonds</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23a</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>991.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>991.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Medium-term Notes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23b</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>464.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>464.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank loans</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,752.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>697.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>473.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>233.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>232.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>115.7</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Liabilities of business acquisitions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,128.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>735.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>818.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>797.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>776.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Obligations under capital leases</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>235.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>114.0</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,332.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,407.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,773.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,505.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,468.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,177.8</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-61
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>22.&nbsp;</B></TD>
    <TD>
    <B>TWO-STEP LOANS</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Two-step loans are loans, which were obtained by the Government
from overseas banks and a consortium of contractors, which are
then re-loaned to the Company. The loans entered into up to July
1994 were recorded and are payable in Rupiah based on the
exchange rate at the date of drawdown. 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.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;15, 2004, the Company repaid a portion of its
Rupiah denominated two-step loans totaling
Rp701,272&nbsp;million before its maturity. Further, on
December&nbsp;24, 2004, the Company repaid a portion of its
U.S.&nbsp;Dollar denominated two-step loans with principal
amount of US$48.8&nbsp;million and its entire Euro denominated
two-step loans with principal amount of EUR14.5&nbsp;million
before their maturities. These early repayments of two-step
loans have been approved by the Ministry of Finance of the
Republic of Indonesia - Directorate General of Treasury.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The details of the two-step loans are as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="38%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Interest Rate</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Outstanding</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Creditors</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Overseas banks</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>3.10%&nbsp;&#151; 13.25%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>3.10%&nbsp;&#151; 10.71%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,889,703</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,250,829</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consortium of contractors</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>3.20%&nbsp;&#151; 13.25%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.20%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>129,002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>78,648</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,018,705</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,329,477</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current maturities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(655,422</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(569,278</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term portion</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,363,283</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,760,199</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The details of two-step loans obtained from overseas banks as of
December&nbsp;31, 2004 and 2005 are as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="39%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Interest Rate</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Outstanding</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Currencies</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>4.00%&nbsp;&#151; 7.98%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>4.00%&nbsp;&#151; 6.81%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,397,437</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,232,752</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rupiah</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>8.30%&nbsp;&#151; 13.25%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>8.3%&nbsp;&#151; 10.71%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,098,948</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,794,149</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Japanese Yen</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.10%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.10%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,393,318</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,223,928</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,889,703</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,250,829</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The loans are intended for the development of telecommunications
infrastructure and supporting equipment. The loans are repayable
in semi-annual installments and are due on various dates
through&nbsp;2024.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-62

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Details of two-step loans obtained from a consortium of
contractors as of December&nbsp;31, 2004 and 2005 are as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="49%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Interest Rate</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Outstanding</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Currencies</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Japanese Yen</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.20%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.20%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>119,078</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>78,648</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rupiah</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>8.30%&nbsp;&#151; 13.25%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.30%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,924</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>129,002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>78,648</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The consortium of contractors consists of Sumitomo Corporation,
PT NEC Nusantara Communications and PT Humpuss Elektronika (SNH
Consortium). The loans were obtained to finance the second
digital telephone exchange project. The loans are repayable in
semi-annual installments and are due on various dates through
June&nbsp;15, 2008.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Two-step loans which are payable in Rupiah bear either a fixed
interest rate, a floating rate based upon the average interest
rate on <FONT style="white-space: nowrap">3-month</FONT>
Certificates of Bank Indonesia during the six-months preceding
the installment due date plus 1%, or a floating interest rate
offered by the lenders plus 5.25%. Two-step loans which are
payable in foreign currencies bear either a fixed rate interest
or the floating interest rate offered by the lenders, plus 0.5%.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, the Company has used all
facilities under the two-step loan program and the draw-down
period for the two-step loans has expired.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company is required to maintain financial ratios as follows:
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
a.&nbsp;Projected net revenue to projected debt service ratio
should exceed 1.5:1 and 1.2:1 for two-step loans originating
from World Bank and Asian Development Bank (&#147;ADB&#148;),
respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
b.&nbsp;Internal financing (earnings before depreciation and
interest expenses) should exceed 50% and 20% compared to capital
expenditures for loans originating from World Bank and ADB,
respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, the Company complied with the
above mentioned ratios.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>23.&nbsp;</B></TD>
    <TD>
    <B>NOTES AND BONDS</B></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="73%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bonds</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>986,564</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>991,850</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Medium-term Notes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,077,703</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>609,329</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Guaranteed Notes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>736,174</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,800,441</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,601,179</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current maturities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(468,976</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(144,510</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term portion</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,331,465</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,456,669</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>a.&nbsp;<U>Bonds</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On July&nbsp;16, 2002, the Company issued bonds amounting to
Rp1,000,000&nbsp;million. The bonds were issued at par value and
have a term of five years. The bonds bear interest at a fixed
rate of 17%&nbsp;per
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-63

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
annum, payable quarterly beginning October&nbsp;16, 2002. The
bonds are traded on the Surabaya Stock Exchange and will mature
on July&nbsp;16, 2007. The trustee of the bonds is PT Bank
Negara Indonesia (Persero) Tbk and the custodian is PT Danareksa
Sekuritas. Effective January&nbsp;17, 2006, PT Bank Rakyat
Indonesia Tbk became the trustee of the bonds replacing PT Bank
Negara Indonesia (Persero) Tbk.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, the rating for the bonds issued by
Pefindo is AAA and by Standard and Poor&#146;s is BB+.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2004 and 2005, the outstanding principal
amount of the bonds and the unamortized bond issuance costs are
as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="73%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Principal</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,000,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bond issuance costs</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(13,436</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,150</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>986,564</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>991,850</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During the period when the bonds are outstanding, the Company is
required to comply with all covenants or restrictions including
maintaining consolidated financial ratios as follows:
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.&nbsp;Debt service coverage ratio should exceed 1.5:1
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2.&nbsp;Debt to equity ratio should not exceed:
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
a.&nbsp;3:1 for the period of January&nbsp;1, 2002 to
December&nbsp;31, 2002
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
b.&nbsp;2.5:1 for the period of January&nbsp;1, 2003 to
December&nbsp;31, 2003
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
c.&nbsp;2:1 for the period of January&nbsp;1, 2004 to the
redemption date of the bonds
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3.&nbsp;Debt to EBITDA ratio should not exceed 3:1
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has breached a covenant in the bonds indenture which
stipulates that during the period when the bonds are
outstanding, the Company will not make any loans to or for the
benefit of any person which in aggregate exceed
Rp500,000&nbsp;million. As of March&nbsp;24, 2006, the Company
has obtained a written waiver from PT&nbsp;Bank Rakyat Indonesia
Tbk, the trustee of the bonds, with regard to providing loans to
certain subsidiaries which in aggregate exceed
Rp500,000&nbsp;million.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>b.&nbsp;<U>Medium-term Notes</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;13, 2004, the Company entered into an agreement
with PT ABN AMRO Asia Securities Indonesia, PT Bahana
Securities, PT BNI Securities and PT Mandiri Sekuritas
(collectively referred as &#147;Initial Purchasers&#148;) to
issue Medium-term Notes (the &#147;Notes&#148;) for a total
principal amount of Rp1,125,000&nbsp;million. Proceeds from
issuance of the Notes were used to finance the payment of the
remaining balance of the borrowings assumed in connection with
the AWI acquisition amounting to US$123.0&nbsp;million.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-64

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Notes consist of four Series with the following maturities
and interest rates:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="47%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="18%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Series</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Principal</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Maturity</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Interest Rate</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    A</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>290,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>June&nbsp;15, 2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.70</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    B</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>225,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>December&nbsp;15, 2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.95</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    C</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>145,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>June&nbsp;15, 2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.20</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    D</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>465,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom" nowrap>June&nbsp;15, 2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.40</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,125,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Interest on the Notes is payable semi-annually beginning
June&nbsp;15, 2005 through June&nbsp;15, 2007. The Notes are
unsecured and will at all times rank <I>pari passu </I>with
other unsecured debts of the Company. The Company may at any
time, before the maturity dates of the Notes, repurchase the
Notes in whole or in part.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On June&nbsp;15, 2005 and December&nbsp;15, 2005, the Company
repaid the Series&nbsp;A and Series&nbsp;B Notes.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2004 and 2005, the outstanding principal
and unamortized debt issuance costs are as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="73%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Principal</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,080,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>610,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Debt issuance costs</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,297</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(671</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,077,703</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>609,329</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current maturities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(468,976</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(144,510</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term portion</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>608,727</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>464,819</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, the rating for the Notes issued by
Pefindo is AAA.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During the period when the Notes are outstanding, the Company
should comply with all covenants or restrictions including
maintaining financial ratios as follows:
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.&nbsp;Debt service coverage ratio should exceed 1.5:1
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2.&nbsp;Debt to equity ratio should not exceed 2:1
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3.&nbsp;Debt to EBITDA ratio should not exceed 3:1
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, the Company complied with the
covenants.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>c.&nbsp;<U>Guaranteed Notes</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In April 2002, TSFL, Telkomsel&#146;s wholly-owned subsidiary,
issued US$150.0&nbsp;million Guaranteed Notes (the
&#147;Notes&#148;) which are unconditionally and irrevocably
guaranteed by Telkomsel. The Notes bear interest at 9.75%,
payable semi-annually on April&nbsp;30 and October&nbsp;30 of
each year and will mature on April&nbsp;30, 2007. The trustee of
the Notes is Deutsche Bank Trustees (Hong&nbsp;Kong Limited) and
the custodian is Deutsche Bank AG, Hong&nbsp;Kong Branch.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-65

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telkomsel has unconditionally and irrevocably guaranteed the
payment of all sums from time to time payable by the Issuer in
respect of the Notes. So long as any Notes remains outstanding,
among others, neither the Issuer nor the Guarantor will create
or permit to subsist any mortgage, charge, pledge, lien or other
form of encumbrance or security interest including without
limitation anything analogous to any of the foregoing under the
laws of any jurisdiction (each a &#147;Security Interest&#148;)
on the whole or any part of its present or future assets,
undertakings, property or revenues as security for any other
indebtedness or any guarantee of or indemnity in respect of any
other indebtedness.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
TSFL may, on the interest payment date falling on or about the
third anniversary of the issue date redeem the Notes, in whole
or in part, at 102.50% of the principal amount of such Notes,
together with interest accrued to the date fixed for redemption,
provided that if only part of the Notes are redeemed, the
principal amount of the outstanding Notes after such redemption
will be at least US$100.0&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Notes are listed on the Singapore Exchange Securities
Trading Limited. The Notes will constitute direct,
unconditional, unsubordinated and unsecured obligations of TSFL
and will at all times rank <I>pari passu </I>and without any
preference among themselves. The payment obligations of TSFL
under the Notes shall, save for such exceptions as may be
provided by applicable laws, at all times rank at least
equivalent with all other present and future unsecured and
unsubordinated obligations of TSFL. The net proceeds from the
sale of the Notes were used by TSFL to lend to Telkomsel in
financing its capital expenditures.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Based on the &#147;On-Loan Agreement&#148;, dated April&nbsp;30,
2002 between Telkomsel and TSFL, TSFL lent the proceeds from the
subscription of the Notes to Telkomsel at an interest rate of
9.765%&nbsp;per annum, payable under the same terms as above.
Subsequently, on September&nbsp;8, 2003, the agreement was
amended such that if any Notes are cancelled, the principal
amount of the outstanding loan will be reduced by the principal
amount of the Notes cancelled. The loan will mature on
April&nbsp;30, 2007 or on such an earlier date as the loan may
become repayable.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On February&nbsp;8, 2005, the inter-company loan agreement,
together with its rights, benefits and outstanding obligations
was transferred from TSFL to TFBV, another wholly owned
subsidiary of Telkomsel. In conjunction with this transfer,
Telkomsel&#146;s liability of US$79.4&nbsp;million under the
loan from TSFL was transferred to TFBV, with terms and
conditions similar to those of the original Notes. Subsequently,
TFBV lent to Telkomsel an additional US$0.8&nbsp;million at a
rate of 9.77% per annum plus a margin of 0.15%, payable under
similar terms as above.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As part of Telkomsel management&#146;s plan to minimize foreign
exchange exposures and to reduce interest charges, on
April&nbsp;30, 2005, which was the third anniversary of the
issue date of the Notes, Telkomsel repurchased all the
outstanding Notes with an aggregate nominal value of
US$79.4&nbsp;million at 102.5% (US$81.4&nbsp;million) and
recorded a loss of Rp19,038&nbsp;million on the extinguishment
of the debt.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-66

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>24.&nbsp;</B></TD>
    <TD>
    <B>BANK LOANS</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The details of long-term bank loans as of December&nbsp;31, 2004
and 2005 are as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="26%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Outstanding</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Outstanding</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Original</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Original</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total Facility</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Currency</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rupiah</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Currency</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rupiah</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Lenders</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Currency</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(in millions)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(in millions)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Equivalent</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(in millions)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Equivalent</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    The Export-Import Bank of Korea</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;&nbsp;US$</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>124.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>59.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>549,449</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>117.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,156,296</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Citibank N.A</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;&nbsp;US$</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>113.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>85.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>798,197</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>62.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>614,501</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;&nbsp;EUR</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>51.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>649,758</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>36.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>427,718</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Central Asia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;&nbsp;Rp</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>173,000.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>143,489</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>86,093</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consortium of banks</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;&nbsp;Rp</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>150,000.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>117,174</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>74,890</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Mandiri</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;&nbsp;Rp</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82,425.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>59,729</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,918</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Niaga</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;&nbsp;Rp</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,800.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,330</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,229</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Bukopin</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;&nbsp;Rp</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,300.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,001</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deutsche Bank</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;&nbsp;Rp</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41,009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Syndicated banks</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;&nbsp;Rp</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,088</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;&nbsp;US$</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,092</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,378,315</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,386,646</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    Current maturities of bank loans</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(602,516</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(634,542</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term portion</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,775,799</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,752,104</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>a.&nbsp;<U>The Export-Import Bank of Korea</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On August&nbsp;27, 2003, the Company entered into a loan
agreement with the Export-Import Bank of Korea for a total
facility of US$124.0&nbsp;million. The loan is used to finance
the CDMA procurement from the Samsung Consortium
(Note&nbsp;50a.ii) and available until April 2006. The loan
bears interest, commitment and other fees totaling 5.68%. The
loan is unsecured and payable in 10 semi-annual installments on
June&nbsp;30 and December&nbsp;30 of each year beginning in
December 2006. As of December&nbsp;31, 2004 and 2005, principal
outstanding amounted to US$59.1&nbsp;million
(Rp549,449&nbsp;million) and US$117.6&nbsp;million
(Rp1,156,296&nbsp;million), respectively.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>b.&nbsp;<U>Citibank N.A.</U></I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="3%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>1.&nbsp;</TD>
    <TD align="left">
    Hermes Export Facility</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;2, 2002, pursuant to the partnership agreement
with Siemens Aktiengesellschaft (AG) (Note&nbsp;50a.i),
Telkomsel entered into the Hermes Export Facility Agreement
(Facility) with Citibank International plc (as Original Lender
and Agent) and Citibank N.A., Jakarta branch (as Arranger)
covering a total facility of EUR76.2&nbsp;million which is
divided into several tranches.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The agreement was subsequently amended on October&nbsp;15, 2003,
amending the Facility amount to EUR73.4&nbsp;million and
repayment dates.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-67

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The interest rate per annum on the Facility is determined based
on the aggregate of the applicable margin, EURIBOR and mandatory
cost, if any (i.e., 2.96% as of December&nbsp;31, 2004 and 3.33%
as of December&nbsp;31, 2005). Interest is payable
semi-annually, starting on the utilization date of the Facility
(May&nbsp;29, 2003).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2004 and 2005, the outstanding balance
was EUR51.4&nbsp;million (Rp649,758&nbsp;million) and
EUR36.7&nbsp;million (Rp427,718&nbsp;million), respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The schedule of the principal payments on this long-term loan as
of December&nbsp;31, 2005 is as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="68%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Amount</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>EUR</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rupiah</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Year</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(in millions)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Equivalent</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2006</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>171,087</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2007</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>171,087</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2008</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>85,544</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>36.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>427,718</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="3%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>2.&nbsp;</TD>
    <TD align="left">
    High Performance Backbone (&#147;HP Backbone&#148;) Loans</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
a.&nbsp;On April&nbsp;10, 2002, the Company entered into a
&#147;Loan Agreement&#148; with Citibank N.A. (Arranger) and
Citibank International plc (Agent), which was supported by an
export credit guarantee of Hermes Kreditversicherungs AG (Lender
and Guarantor), providing a total facility of
US$23.4&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The facility was obtained to finance up to 85% of the cost of
supplies and services sourced in Germany relating to the design,
manufacture, construction, installation and testing of high
performance backbone networks in Sumatra pursuant to the
&#147;Partnership Agreement&#148; dated November&nbsp;30, 2001,
with PT Pirelli Cables Indonesia and PT Siemens Indonesia for
the construction and provision of a high performance backbone in
Sumatra.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The lender required a fee of 8.4% of the total facility. This
fee is paid twice during the agreement period, 15% of the fee is
required to be paid in cash and 85% is included in the loan
balance.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2004 and 2005, the outstanding loan was
US$16.8&nbsp;million (Rp155,918&nbsp;million) and
US$12.6&nbsp;million (Rp123,665&nbsp;million), respectively. The
loan is payable in ten semi-annual installments beginning in
April 2004.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Amounts drawn from the facility bear interest at a rate equal to
the <FONT style="white-space: nowrap">6-month</FONT> LIBOR plus
0.75% (i.e., 2.97% and 5.04% as of December&nbsp;31, 2004 and
2005, respectively).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
b.&nbsp;On April&nbsp;10, 2002, the Company entered into a loan
agreement with Citibank N.A. (as Arranger) and Citibank
International plc (as Agent), which was supported by an export
credit guarantee obtained from Istituto per I Servizi
Assicurativi del Commercio Estero <I>(&#147;SACE Italy&#148;)
</I>providing a total maximum facility to US$21.0&nbsp;million.
The facility was used to finance up to 85% of material and
services procured in Italy in connection with the design,
manufacture, development, installation and testing of <I>Sub
System VI, </I>as part of <I>HP Backbone </I>network.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-68

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Amounts drawn from the facility bear fixed interest rate of
4.14%. The loans are payable in ten semi-annual installments
beginning in December 2003. Total principal outstanding as of
December&nbsp;31, 2004 and 2005 was US$13.0&nbsp;million
(Rp120,809&nbsp;million) and US$9.3&nbsp;million
(Rp91,257&nbsp;million), respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During the period when the loans are outstanding, the Company is
required to comply with all covenants or restrictions including
maintaining financial ratios as follows:
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.&nbsp;Debt service coverage ratio should exceed 1.5:1
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2.&nbsp;Debt to equity ratio should not exceed:
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
a.&nbsp;3:1 for the period of April&nbsp;10, 2002 to
January&nbsp;1, 2003
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
b.&nbsp;2.75:1 for the period of January&nbsp;2, 2003 to
January&nbsp;1, 2004
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
c.&nbsp;2.5:1 for the period of January&nbsp;2, 2004 to
January&nbsp;1, 2005
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
d.&nbsp;2:1 for the period of January&nbsp;2, 2005 to the full
repayment date of the loans
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3.&nbsp;Debt to EBITDA ratio should not exceed:
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
a.&nbsp;3.5:1 for the period of April&nbsp;10, 2002 to
January&nbsp;1, 2004
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
b.&nbsp;3:1 for the period of January&nbsp;2, 2004 to the full
repayment date of the loans
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has breached a covenant in the loan agreements which
stipulates that the Company will not make any loans or grant any
credit to or for the benefit of any person which in aggregate
exceed 3% of shareholders&#146; equity. As of May&nbsp;12, 2006,
the Company has obtained a written waiver from Citibank
International plc with regard to providing loans to certain
subsidiaries which in aggregate exceed 3% of shareholders&#146;
equity.
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="3%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>3.&nbsp;</TD>
    <TD align="left">
    EKN-Backed Facility</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;2, 2002, pursuant to the partnership agreement
with PT Ericsson Indonesia (Note&nbsp;50a.i), Telkomsel entered
into the EKN-Backed Facility agreement (Facility) with Citibank
International plc (as Original Lender and Agent) and Citibank
N.A., Jakarta branch (as Arranger) covering a total facility
amount of US$70.5&nbsp;million which is divided into several
tranches.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The agreement was subsequently amended on December&nbsp;17,
2004, to reduce the total Facility to US$68.9&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The interest rate per annum on the Facility is determined based
on the aggregate of the applicable margin, CIRR (Commercial
Interest Reference Rate) and mandatory cost, if any (i.e., 4.02%
and 4.02% as of December&nbsp;31, 2004 and 2005, respectively).
Interest is payable semi-annually, starting on the utilization
date of the Facility (July&nbsp;31, 2003).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition to the interest, in 2004, Telkomsel was also charged
an insurance premium for the insurance guarantee given by EKN in
favor of Telkomsel for loan utilization amounting to
US$1.5&nbsp;million, 15% of which was paid in cash. The
remaining balance was settled through utilization of the
Facility.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The total amount drawn down from the Facility in 2004 and 2005
amounted to US$47.3&nbsp;million (equivalent to
Rp428,719&nbsp;million) and nil, respectively. As of
December&nbsp;31, 2004 and 2005, the
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-69

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
outstanding balance was US$56.1&nbsp;million
(Rp521,470&nbsp;million) and US$40.6&nbsp;million
(Rp399,579&nbsp;million), respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The schedule of the principal payments on this long-term loan as
of December&nbsp;31, 2005 is as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="68%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Amount</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>US$</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rupiah</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Year</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(in millions)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Equivalent</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2006</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>152,202</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2007</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>152,202</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2008</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>95,175</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>40.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>399,579</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table summarizes the principal outstanding on
loans from Citibank N.A. as of December&nbsp;31, 2004 and 2005:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="42%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Foreign</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Foreign</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Currencies</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rupiah</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Currencies</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rupiah</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(in millions)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Equivalent</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(in millions)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Equivalent</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Hermes Export Facility</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>EUR 51.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>649,758</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>EUR 36.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>427,718</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    HP Backbone loans</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">US$</TD>
    <TD align="right" valign="bottom" nowrap>29.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>276,727</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">US$</TD>
    <TD align="right" valign="bottom" nowrap>21.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>214,922</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    EKN-Backed Facility</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">US$</TD>
    <TD align="right" valign="bottom" nowrap>56.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>521,470</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">US$</TD>
    <TD align="right" valign="bottom" nowrap>40.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>399,579</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,447,955</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,042,219</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current maturities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(402,983</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(401,013</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term portion</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,044,972</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>641,206</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>c.&nbsp;<U>Bank Central Asia</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On April&nbsp;10, 2002, the Company entered into a &#147;Term
Loan Agreement HP Backbone Sumatra Project&#148; with Bank
Central Asia, providing a total facility of
Rp173,000&nbsp;million. The facility was obtained to finance the
Rupiah portion of the high performance backbone network in
Sumatra pursuant to the &#147;Partnership Agreement&#148;.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Amounts drawn from the facility bear interest at 4.35% plus the
<FONT style="white-space: nowrap">3-month</FONT> time deposit
rate (10.02% and 13.27% as of December&nbsp;31, 2004 and 2005,
respectively). The loans are payable in twelve unequal quarterly
installments beginning in July 2004. The loan was originally
scheduled to mature in October 2006 and was amended in 2004 to
mature in April 2007.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Total principal outstanding as of December&nbsp;31, 2004 and
2005 was Rp143,489&nbsp;million and Rp86,093&nbsp;million,
respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The loan facility from Bank Central Asia is not collateralized.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-70

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During the period when the loan is outstanding, the Company is
required to comply with all covenants or restrictions including
maintaining financial ratios as follows:
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.&nbsp;EBITDA to interest ratio should exceed 4:1
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2.&nbsp;EBITDA to interest and principal ratio should exceed
1.5:1
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3.&nbsp;Debt to EBITDA ratio should not exceed 3:1
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has breached a covenant in the loan agreement which
stipulates that the Company will not make any loans to or for
the benefit of any person which in aggregate exceed
Rp500,000&nbsp;million. As of April&nbsp;24, 2006, the Company
has obtained a written waiver from Bank Central Asia with regard
to providing loans to certain subsidiaries which in aggregate
exceed Rp500,000&nbsp;million.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>d.&nbsp;<U>Consortium of banks</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On June&nbsp;21, 2002, the Company entered into a loan agreement
with a consortium of banks for a facility of
Rp400,000&nbsp;million to finance the Regional Division V
Junction Project. Bank Bukopin, acting as the facility agent,
charged interest at the rate of 19.5% for the first year from
the signing date and at the rate of the average&nbsp;3-month
deposit rate plus 4% for the remaining years. The draw-down
period expires 19&nbsp;months from the signing of the loan
agreement and the principal is payable in 14 quarterly
installments starting from April 2004. The loan facility is
secured by project equipment, with a value of not less than
Rp500,000&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Subsequently, based on an addendum to the loan agreement dated
April&nbsp;4, 2003, the loan facility was reduced to
Rp150,000&nbsp;million, the draw-down period was amended to
expire 18&nbsp;months from the signing of the addendum, the
repayment schedule was amended to 14 quarterly installments
starting from May&nbsp;21, 2004 and ending on June&nbsp;21,
2007, and the value of the project equipment secured was reduced
to Rp187,500&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2004 and 2005, interest rate charged on
the loan was 10.19% and 12.94%, respectively, and principal
outstanding was Rp117,174&nbsp;million and
Rp74,890&nbsp;million, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During the period when the loan is outstanding, the Company is
required to comply with all covenants or restrictions including
maintaining financial ratios as follows:
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.&nbsp;Debt to equity ratio should not exceed 3:1
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2.&nbsp;EBITDA to interest expense should exceed 5:1
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, the Company complied with the
above mentioned ratios.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>e.&nbsp;<U>Bank Mandiri</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On November&nbsp;20, 2003, Dayamitra entered into a loan
agreement with Bank Mandiri for a maximum facility of
Rp39,925&nbsp;million. As of December&nbsp;31, 2003, the
facility has been fully drawn down. This facility is repayable
on a quarterly basis until the fourth quarter of 2005 and bears
interest at 14.5%&nbsp;per annum which is subject to change to
reflect change in market rate (11.25% and 14% as of
December&nbsp;31, 2004 and 2005, respectively), and payable on a
monthly basis. The loan is obtained to refinance
Dayamitra&#146;s payable to six contractors. As of
December&nbsp;31, 2004, principal outstanding under
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-71

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
this facility was Rp27,925&nbsp;million. On December&nbsp;23,
2005, the loan was fully repaid and on January&nbsp;4, 2006, the
loan agreement was terminated.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;20, 2003, Dayamitra also obtained a credit
facility from Bank Mandiri for a maximum facility of
Rp40,000&nbsp;million. The facility is repayable on a quarterly
basis beginning from the end of the third quarter of 2004 until
end of the fourth quarter of 2006 and bears interest at
14%&nbsp;per annum which is subject to change to reflect change
in market rate (11.25% and 14% as of December&nbsp;31, 2004 and
2005, respectively). The loan is obtained to finance the
construction of Fixed Wireless CDMA project pursuant to the
procurement agreement entered between Dayamitra and Samsung
Electronic Co. Ltd. As of December&nbsp;31, 2004 and 2005,
principal outstanding under this facility was
Rp30,329&nbsp;million and Rp14,328&nbsp;million, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The above loans are collateralized by Dayamitra&#146;s
telecommunications equipment/network with CDMA technology
financed by these facilities, and Dayamitra&#146;s share in the
DKSOR of KSO VI. In addition, Dayamitra is required to maintain
a minimum balance of Rp6,000&nbsp;million in an escrow account
established to facilitate loan repayments (Note&nbsp;16b).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On March&nbsp;13, 2003, Balebat entered into a loan agreement
with Bank Mandiri for a facility of Rp2,500&nbsp;million. This
facility is secured by Balebat&#146;s operating equipment and
will mature in July 2006. As of December&nbsp;31, 2004 and 2005,
interest rate charged on the loan was 19% and 17%, respectively,
and is payable on a monthly basis. The principal is repayable on
a monthly basis. As of December&nbsp;31, 2004 and 2005,
principal outstanding under this facility amounted to
Rp1,475&nbsp;million and Rp590&nbsp;million, respectively.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>f.&nbsp;<U>Bank Niaga</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On July 18 and December&nbsp;3, 2003, Balebat entered into loan
agreements with Bank Niaga for facilities totaling
Rp565&nbsp;million. The facilities bear interest at 15%&nbsp;per
annum and are secured by Balebat&#146;s time deposits and
vehicles. The principal and interest are payable on a monthly
basis which will end in October 2005 and December 2005,
respectively. As of December&nbsp;31, 2004 and 2005, principal
outstanding amounted to Rp249&nbsp;million and nil, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;28, 2004, Balebat entered into a loan agreement
with Bank Niaga providing a total facility of
Rp7,200&nbsp;million comprising of Rp5,000&nbsp;million to
finance construction of plant (&#147;Investment Facility&#148;)
which bears interest at 13.5%&nbsp;per annum and
Rp2,200&nbsp;million to finance purchase of machinery
(&#147;Specific Transaction Facility&#148;) which bears interest
at 12%&nbsp;per annum. The interest rate was subsequently
increased to 17%&nbsp;per annum on December&nbsp;1, 2005. The
Investment Facility is repayable in 36&nbsp;monthly installments
commencing from March&nbsp;31, 2005. The Specific Transaction
Facility is repayable in 60&nbsp;monthly installments commencing
from June&nbsp;29, 2005. These facilities are secured by
Balebat&#146;s property, plant and equipment with a value of
Rp8,450&nbsp;million. As of December&nbsp;31, 2004 and 2005,
principal outstanding under these facilities amounted to
Rp7,081&nbsp;million and Rp5,696&nbsp;million, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As discussed in Note&nbsp;20d, on April&nbsp;25, 2005, Balebat
entered into a loan agreement with Bank Niaga for a total
facility of Rp2,400&nbsp;million which includes an investment
credit facility of Rp1,600&nbsp;million with maturity date of
October&nbsp;25, 2009. The investment credit facility loan is
payable in 48 unequal monthly installments beginning in November
2005 through October 2009. The investment
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-72

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
credit facility bears interest at a rate equal to market rate
plus 2% (17% as of December&nbsp;31, 2005). As of
December&nbsp;31, 2005, the principal outstanding amounted to
Rp1,533&nbsp;million.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>g.&nbsp;<U>Bank Bukopin</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On May&nbsp;11, 2005, Infomedia entered into loan agreements
with Bank Bukopin for maximum facilities totaling
Rp5,300&nbsp;million. The loan is obtained to finance
acquisition of a property. The loan is payable in
60&nbsp;monthly installments. A portion of the facilities of
Rp4,200&nbsp;million will mature in June 2010 and the remainder
of Rp1,100&nbsp;million will mature in December 2010. As of
December&nbsp;31, 2005, interest rate charged on the loan was
15.75%. The facilities are secured by certain Infomedia&#146;s
property. As of December&nbsp;31, 2005, the principal
outstanding amounted to Rp5,001&nbsp;million.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>h.&nbsp;<U>Deutsche Bank AG</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On June&nbsp;28, 2002, the Company entered into a contract
agreement with PT Siemens Indonesia and PT NEC Nusantara
Communications for addition of Central Electronic Wahler
Switching Digital (EWSD) and Nippon Electric Automatic Exchange
(NEAX), respectively, in Regional Division V. Subsequently, 80%
of the contract amounts were factored by the vendors to Deutsche
Bank AG (Facility Agent). The loans bore fixed interest rate at
19%&nbsp;per annum and are repayable in two annual installments
of Rp13,400&nbsp;million beginning in December 2003 for loan
ex-PT NEC Nusantara Communications and Rp41,009&nbsp;million
beginning in January 2004 for loan ex-PT Siemens Indonesia. As
of December&nbsp;31, 2004, the outstanding balance was
Rp41,009&nbsp;million. On January&nbsp;4, 2005, the loan was
fully repaid and the loan agreement was terminated.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>i.&nbsp;<U>Syndicated banks (Internet Protocol Backbone
    (&#147;IP Backbone&#148;) Loan)</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On February&nbsp;25, 2002, the Company entered into a
&#147;Facility Funding Agreement&#148; with Bank DBS Indonesia
(syndicated agent and lender), Bank Bukopin (lender)&nbsp;and
Bank Central Asia (&#147;BCA&#148;, lender), providing a total
facility of US$4.0&nbsp;million and Rp90,000&nbsp;million to
fund the IP Backbone project in 7 (seven)&nbsp;Regional
Divisions or KSO regions divided into six&nbsp;batches.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Amounts drawn in U.S.&nbsp;Dollars bear interest at 2% plus the
highest of&nbsp;1, 2 or 3&nbsp;month SIBOR divided by 0.87% for
the first year and 2% plus the 3&nbsp;month SIBOR divided by
0.87% thereafter (4.875% as of December&nbsp;31, 2004). Amounts
drawn in Rupiah bear interest at 19% fixed for the first year
and 5% plus the average of BCA&#146;s and Bukopin&#146;s
interest rates (the highest of&nbsp;1, 3, 6 or
<FONT style="white-space: nowrap">12-month</FONT> time deposit
rate) thereafter (11.125% as of December&nbsp;31, 2004).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The loans are payable in eleven quarterly installments beginning
in September 2002 and due on March&nbsp;15, 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Total outstanding IP Backbone loans for Rupiah and
U.S.&nbsp;Dollars as of December&nbsp;31, 2004 are
Rp8,088&nbsp;million and US$0.4&nbsp;million
(Rp4,092&nbsp;million), respectively. The loans were fully
repaid on March&nbsp;15, 2005 and the loan agreement was
terminated.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company pledged the property under construction as
collateral for the IP Backbone loan with a maximum amount of
US$14.6&nbsp;million and Rp401&nbsp;million.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-73

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Average interest rates for the loans during 2004 and 2005 were
as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="63%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rupiah</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.83%&nbsp;&#151; 11.63%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11.125%</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S. Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.31%&nbsp;&#151; 4.88%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.875%</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>25.&nbsp;</B></TD>
    <TD>
    <B>LIABILITIES OF BUSINESS ACQUISITIONS</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This amount represents the Company&#146;s obligation under the
Promissory Notes issued to the Selling Stockholders of AWI in
respect of the Company&#146;s acquisition of 100% of AWI, to TM
Communication (HK)&nbsp;Ltd. in respect of the Company&#146;s
exercise of the Option Agreement to purchase the remaining 9.68%
of Dayamitra shares, and to MGTI in respect of the
Company&#146;s acquisition of KSO IV.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="70%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>AWI transaction </B>(Note&nbsp;5c)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT Aria Infotek</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>479,373</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>394,294</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    The Asian Infrastructure Fund</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>114,136</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>93,879</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    MediaOne International I B.V</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>319,582</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>262,863</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Less discount on promissory notes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(90,173</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(57,298</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>822,918</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>693,738</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Dayamitra transaction </B>(Note&nbsp;5a)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    TM Communication (HK)&nbsp;Ltd.&nbsp;</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>139,752</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>147,791</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Less discount on promissory notes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11,883</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,519</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>127,869</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>145,272</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>KSO IV transaction </B>(Note&nbsp;5d)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    MGTI</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,305,125</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,868,433</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Less discount</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(938,687</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(717,090</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,366,438</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,151,343</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,317,225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,990,353</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current maturity&nbsp;&#151; net of discount (Note&nbsp;21a)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(573,908</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(862,394</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term portion&nbsp;&#151; net of discount</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,743,317</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,127,959</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>26.&nbsp;</B></TD>
    <TD>
    <B>MINORITY INTEREST</B></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="70%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Minority interest in net assets of subsidiaries:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Telkomsel</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,857,089</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,208,354</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Infomedia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>80,883</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>96,835</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PII</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>456</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    GSD</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,938,432</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,305,193</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-74

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 24pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="59%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Minority interest in net income (loss)&nbsp;of subsidiaries:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Telkomsel</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,482,897</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,915,543</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,026,029</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Infomedia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,399</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37,088</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37,940</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dayamitra</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,584</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,139</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Indonusa</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,351</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,959</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Napsindo</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,541</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,068</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PII</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,511</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,443</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    GSD</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,503,478</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,956,301</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,063,971</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>27. CAPITAL STOCK</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="39%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>2004</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Percentage of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total Paid-up</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3" align="left" nowrap><B>Description</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number of Shares</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Ownership</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Capital</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Series&nbsp;A Dwiwarna share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Government of the Republic of Indonesia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Series&nbsp;B shares</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Government of the Republic of Indonesia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,320,470,711</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>51.19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,580,118</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    JPMCB US Resident (Norbax Inc.)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,378,468,925</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.84</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>344,617</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    The Bank of New York</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,568,517,736</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.78</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>392,129</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Board of Commissioners</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Petrus Sartono</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,116</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Board of Directors</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Kristiono</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,380</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Suryatin Setiawan</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,708</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Woeryanto Soeradji</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,524</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Public (below 5% each)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,892,459,179</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34.19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,723,116</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,159,999,280</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,040,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-75

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 24pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="39%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Percentage of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total Paid-up</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3" align="left" nowrap><B>Description</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number of Shares</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Ownership</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Capital</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Series&nbsp;A Dwiwarna share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Government of the Republic of Indonesia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Series&nbsp;B shares</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Government of the Republic of Indonesia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,320,470,711</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>51.19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,580,118</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    JPMCB US Resident (Norbax Inc.)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,992,333,765</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.88</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>498,083</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    The Bank of New York</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,291,002,696</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.41</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>322,751</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Board of Commissioners</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Petrus Sartono</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,116</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Board of Directors</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Garuda Sugardo</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,524</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Abdul Haris</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    John Welly</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,712</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Guntur Siregar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,980</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Public (below 5% each)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,556,113,775</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32.52</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,639,029</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,159,999,280</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,040,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>28.&nbsp;</B></TD>
    <TD>
    <B>ADDITIONAL PAID-IN CAPITAL</B></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="73%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Proceeds from sale of 933,333,000 shares in excess of par value
    through initial public offering in 1995</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,446,666</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,446,666</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capitalization into 746,666,640 series&nbsp;B shares in 1999</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(373,333</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(373,333</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,073,333</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,073,333</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>29.&nbsp;</B></TD>
    <TD>
    <B>DIFFERENCE IN VALUE OF RESTRUCTURING TRANSACTIONS BETWEEN
    ENTITIES UNDER COMMON CONTROL</B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Cross-ownership transactions and acquisition of
    Pramindo</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On April&nbsp;3, 2001, the Company signed a Conditional Sale and
Purchase Agreement with Indosat, for a series of transactions to
consolidate their cross-ownership in certain companies. The
transactions under the agreement are as follows:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    i.&nbsp;Acquisition by the Company of Indosat&#146;s 35% equity
    interest in Telkomsel for US$945.0&nbsp;million (&#147;Telkomsel
    Transaction&#148;);</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    ii.&nbsp;Acquisition by Indosat of the Company&#146;s 22.5%
    equity interest in PT Satelit Palapa Indonesia
    (&#147;Satelindo&#148;) for US$186.0&nbsp;million
    (&#147;Satelindo Transaction&#148;);</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-76

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    iii.&nbsp;Acquisition by Indosat of the Company&#146;s 37.66%
    equity interest in PT Aplikanusa Lintasarta
    (&#147;Lintasarta&#148;) and convertible bonds of
    Rp4,051&nbsp;million issued by Lintasarta for
    US$38.0&nbsp;million (&#147;Lintasarta
    Transaction&#148;);&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    iv.&nbsp;The acquisition by Indosat of all of the Company&#146;s
    rights and novation of all of the Company&#146;s obligations,
    under the KSO IV Agreement dated October&nbsp;20, 1995, between
    the Company and PT Mitra Global Telekomunikasi Indonesia
    (&#147;MGTI&#148;), together with all of the Company&#146;s
    assets being used as KSO IV assets, for US$375.0&nbsp;million
    (&#147;KSO IV Transaction&#148;).</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lintasarta&#146;s convertible bonds were subsequently converted
into shares, thereby reducing the Company&#146;s 37.66% equity
interest to 37.21% prior to the consummation of the Lintasarta
Transaction.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Telkomsel and Lintasarta Transactions were consummated on
May&nbsp;16, 2001 based on Deed of Share Transfer No.&nbsp;1/
V/2001/triplo and No.&nbsp;2/ V/2001/duplo, respectively, of
Notary Ny. Liliana Arif Gondoutomo, S.H.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Satelindo Transaction was consummated on July&nbsp;23, 2001
after DeTeAsia Holding GmbH and PT Bimagraha Telekomindo (the
other Satelindo stockholders) waived their pre-emptive rights on
7.26% and 13.06% of Satelindo&#146;s shares, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On February&nbsp;1, 2002, the Company and Indosat announced the
cancellation of the KSO IV Transaction. As a result, the Company
settled this portion of the cross-ownership transaction in cash.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At the time of the transaction, the Government was the majority
and controlling shareholder of both the Company and Indosat.
Accordingly, the Telkomsel, Satelindo and Lintasarta
Transactions have been accounted for as a restructuring of
entities under common control. The Company&#146;s acquisition of
a controlling interest in Telkomsel was accounted for in a
manner similar to that of pooling of interests accounting
(carryover basis). Accordingly, for reporting purposes, the
financial statements of the Company and those of Telkomsel have
been combined, as if they had been combined from the beginning
of the earliest period presented. The effects of the
transactions between the Company and Telkomsel before the
combination were eliminated in preparing the combined financial
statements. On the consummation dates of the transactions, the
difference between the consideration paid or received and the
historical amount of the net assets of the investee acquired or
carrying amount of the investment sold was included as
&#147;Difference in value of restructuring transactions between
entities under common control&#148; in the stockholders&#146;
equity section.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As discussed in Note&nbsp;5b, in connection with the acquisition
of Pramindo on August&nbsp;15, 2002, the portion representing
Indosat&#146;s 13% equity interest in Pramindo has been
accounted for as a restructuring of entities under common
control. On the acquisition date, the difference between the
purchase consideration and the historical amount of the net
assets acquired amounting to Rp296,038&nbsp;million was included
as &#147;Difference in value of restructuring transactions
between entities under common control&#148; in the
stockholders&#146; equity section.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-77

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The difference in value of restructuring transactions between
entities under common control arising from cross-ownership
transactions and acquisition of Pramindo can be summarized as
follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="19%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Historical</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Consideration</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amount of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Paid/</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Net Assets/</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Deferred</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Change</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Received)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Investment</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Income Tax</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>in Equity</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Tax</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Net</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cross-ownership transactions with Indosat in 2001:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Acquisition of 35% equity interest in Telkomsel</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,782,450</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,466,658</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>337,324</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,978,468</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,978,468</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Sale of 22.5% equity interest in Satelindo</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,122,260</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(290,442</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,412,702</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(627,678</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,785,024</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Sale of 37.66% equity interest in Lintasarta</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(437,631</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>116,834</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(320,797</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(119,586</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(201,211</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,222,559</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,583,492</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>337,324</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(290,442</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,244,969</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(747,264</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,992,233</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Acquisition of 13% equity interest in Pramindo in 2002 from
    Indosat (Note&nbsp;5b)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>434,025</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>137,987</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>296,038</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>296,038</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,656,584</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,721,479</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>337,324</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(290,442</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,541,007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(747,264</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,288,271</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;20, 2002, the Government sold its 41.94%
ownership interest in Indosat to STTC and waived its special
voting rights with respect to the Series&nbsp;A Dwiwarna share.
As a result, as of December&nbsp;20, 2002, the Government ceased
to be the majority and controlling shareholder of Indosat and
consequently, the Company no longer considers Indosat as a
common control entity as of that date. As discussed in
Note&nbsp;4b, in connection with the adoption of PSAK 38R and
pursuant to a ruling issued by BAPEPAM regarding the initial
application of PSAK&nbsp;38R by public companies, the Company
has reclassified the difference in value of restructuring
transactions between entities under common control resulting
from the cross-ownership transactions and acquisition of
Pramindo as a charge to retained earnings as of January&nbsp;1,
2005.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Compensation for early termination of exclusive
    rights</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As discussed in Note&nbsp;1a, on July&nbsp;31, 2002, the
Government decided to terminate the Company&#146;s exclusive
rights to provide local and domestic long-distance fixed-line
telecommunications services with effect from August&nbsp;1, 2002.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On March&nbsp;30, 2004, the Minister of Communications issued
Announcement No. PM.2&nbsp;year 2004 regarding the
Implementation of Restructuring in the Telecommunications Sector
which, among others, provides that the Government shall pay
compensation for early termination of exclusive rights to the
Company amounting to Rp478,000&nbsp;million net of tax.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-78

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;15, 2005, the Company signed an agreement on
Implementation of Compensation for Termination of Exclusive
Rights with the Ministry of Communications and
Information&nbsp;&#151; Directorate General of Post and
Telecommunications. Pursuant to this agreement, the Government
agreed to pay Rp478,000&nbsp;million to the Company over a
five-year period where Rp90,000&nbsp;million shall be paid from
the 2005 State budget, Rp90,000&nbsp;million from the 2006 State
budget and the remaining Rp298,000&nbsp;million shall be paid
gradually or in one lump-sum payment based on the State&#146;s
financial ability. In addition, the Company is required by the
Government to use funds received from this compensation for
development of telecommunications infrastructure.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;30, 2005, the Company received the first
payment of Rp90,000&nbsp;million and recorded this amount in
&#147;Difference in value of restructuring transactions between
entities under common control&#148; in the stockholders&#146;
equity section. The amount is recorded as a component of
stockholders&#146; equity because the Government is the majority
and controlling shareholder of the Company. The Company will
record the remaining amount of Rp388,000&nbsp;million when
received.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>30.&nbsp;</B></TD>
    <TD>
    <B>TELEPHONE REVENUES</B></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="58%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fixed lines</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Local and domestic long-distance usage</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,561,800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,439,310</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,223,137</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Monthly subscription charges</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,948,830</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,934,899</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,289,750</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Installation charges</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>223,130</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>201,313</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>197,266</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Phone cards</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,371</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,561</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,943</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Others</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>128,734</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>53,938</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>60,156</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,896,865</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,645,021</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,781,252</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cellular</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Air time charges</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,677,884</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,825,738</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,666,286</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Monthly subscription charges</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>580,550</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>448,472</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>383,537</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Connection fee charges</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>194,053</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>55,797</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>64,110</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Features</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,343</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>91,291</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>457,025</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,458,830</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,421,298</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,570,958</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Telephone Revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,355,695</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,066,319</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,352,210</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>31. INTERCONNECTION REVENUES&nbsp;&#151; NET</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="64%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cellular</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,908,292</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,351,613</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,685,138</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    International</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>184,097</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>641,210</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>854,766</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>69,759</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>195,158</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>202,180</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,162,148</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,187,981</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,742,084</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-79

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>32. REVENUE UNDER JOINT OPERATION SCHEMES</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="67%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Minimum Telkom Revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>899,862</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>295,955</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>268,629</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Share in Distributable KSO Revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>583,012</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>349,528</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>318,556</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of unearned initial investor payments under Joint
    Operation Schemes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,433</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,131</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,462</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,486,307</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>656,614</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>588,647</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Distributable KSO Revenues represent the entire KSO revenues,
less Minimum Telkom Revenue and operational expenses of the KSO
Units. These revenues are shared between the Company and the KSO
Investors based upon agreed percentages (Note&nbsp;47).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Minimum Telkom Revenue and Share in Distributable KSO
Revenues decreased in 2004 due to the acquisition and
consolidation of KSO IV (Note&nbsp;5d).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>33. DATA AND INTERNET REVENUES</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="62%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SMS</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,205,058</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,562,726</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,309,244</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Internet</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>325,890</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>554,948</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>711,375</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Data communication</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>245,575</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>360,642</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>610,367</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    VoIP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>328,284</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>318,854</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>292,750</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    e-Business</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,755</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,572</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,588</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,108,562</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,808,742</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,934,324</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>34. NETWORK REVENUES</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="68%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Leased lines</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>247,005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>443,408</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>347,105</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Satellite transponder lease</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>270,860</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>210,901</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>239,531</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>517,865</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>654,309</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>586,636</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>35. REVENUE-SHARING ARRANGEMENT REVENUES</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="68%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenue-Sharing Arrangement revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>200,085</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>198,543</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>165,601</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of unearned income (Note&nbsp;13)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>58,379</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82,033</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>136,681</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>258,464</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>280,576</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>302,282</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-80

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>36. OPERATING EXPENSES&nbsp;&#151; PERSONNEL</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="62%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(As restated*)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Salaries and related benefits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,574,181</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,796,914</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,165,895</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Vacation pay, incentives and other benefits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>816,055</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,156,069</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,615,640</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Early retirements</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>355,735</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>243,466</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>486,374</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net periodic post-retirement health care benefit cost
    (Note&nbsp;44)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>641,435</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>416,276</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>488,586</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net periodic pension cost (Note&nbsp;42)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>190,974</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>572,419</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>532,331</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Employee income tax</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>468,805</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>523,787</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>856,451</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long service awards (Note&nbsp;43)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>219,239</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>36,861</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>201,878</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Housing</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>116,858</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>103,459</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>113,673</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Medical</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,682</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,190</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,019</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other employee benefits (Note&nbsp;42)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,439</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,510</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,954</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Others</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>42,693</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>37,014</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>78,246</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,440,096</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,909,965</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,563,047</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>37.&nbsp;</B></TD>
    <TD>
    <B>OPERATING EXPENSES&nbsp;&#151; OPERATIONS, MAINTENANCE AND
    TELECOMMUNICATION SERVICES</B></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="62%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operations and maintenance</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,744,806</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,398,159</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,075,092</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Concession fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>610,719</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>807,309</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,257,376</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cost of phone, SIM and RUIM cards</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>181,272</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>366,661</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>582,351</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Electricity, gas and water</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>300,432</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>385,662</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>372,526</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Vehicles and supporting facilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>115,697</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>181,737</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>217,217</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Insurance</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>157,075</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>151,297</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>136,378</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Leased lines</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>127,021</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>132,829</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>124,253</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Travelling</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,815</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>42,213</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,455</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Others</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>71,856</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>63,720</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>117,693</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,338,693</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,529,587</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,916,341</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 8.0pt;color: #000000; background: #ffffff;">
*&nbsp;The 2004 figures have been restated due to the adoption
of PSAK&nbsp;24R. (see Note&nbsp;4a).
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-81

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>38. OPERATING EXPENSES&nbsp;&#151; GENERAL AND
ADMINISTRATIVE</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="62%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Professional fees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>115,598</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>137,355</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>131,047</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Collection expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>273,767</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>358,957</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>379,056</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of goodwill and other intangible assets
    (Note&nbsp;15)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>730,659</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>872,330</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>918,153</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Training, education and recruitment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>126,927</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>228,524</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>177,853</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Travel</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>144,677</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>192,567</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>171,657</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Security and screening</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>110,278</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>143,892</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>164,416</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    General and social contribution</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>113,785</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>111,838</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>204,326</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Printing and stationery</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,535</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>80,972</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,190</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Meetings</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>42,813</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>58,333</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>40,311</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Provision for doubtful accounts and inventory obsolescence</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>326,419</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>357,695</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>488,973</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Research and development</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,111</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,396</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Others</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,208</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44,159</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,573</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,078,777</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,599,847</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,763,951</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>39.&nbsp;</B></TD>
    <TD>
    <B>INCOME TAX</B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>a.&nbsp;<U>Prepaid taxes</U></I></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="76%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    The Company</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Refundable corporate income tax&nbsp;&#151; overpayment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38,370</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38,370</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Subsidiaries</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Corporate income tax</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,515</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,352</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Value added tax</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,343</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,561</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38,858</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,913</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>77,228</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,913</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-82

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>b.&nbsp;<U>Taxes payable</U></I></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="67%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    The Company</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income tax</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Article&nbsp;21</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35,970</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>64,793</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Article&nbsp;22</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,057</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,055</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Article&nbsp;23</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,223</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46,132</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Article&nbsp;25</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>94,857</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>117,281</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Article&nbsp;26</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31,165</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,143</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Article&nbsp;29</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>508,909</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>376,140</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Value added tax</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>101,683</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>256,523</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>800,864</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>867,067</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Subsidiaries</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income tax</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Article&nbsp;4</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,437</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,318</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Article&nbsp;21</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38,853</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,059</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Article&nbsp;22</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>930</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Article&nbsp;23</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46,636</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>55,928</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Article&nbsp;25</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>151,318</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>203,254</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Article&nbsp;26</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,515</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>72,252</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Article&nbsp;29</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>427,641</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,207,247</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Value added tax</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>112,285</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35,640</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>791,615</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,602,698</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,592,479</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,469,765</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-83

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>c.&nbsp;<U>The components of income tax expense (benefit) are
    as follows:</U></I></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="59%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(As restated*)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    The Company</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,886,283</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,922,238</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,034,248</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Subsidiaries</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,904,997</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,344,873</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,685,396</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,791,280</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,267,111</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,719,644</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    The Company</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(198,719</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(330,630</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(694,843</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Subsidiaries</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>268,529</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>242,045</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>159,086</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>69,810</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(88,585</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(535,757</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,861,090</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,178,526</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,183,887</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 8.0pt;color: #000000; background: #ffffff;">
*&nbsp;The 2004 figures have been restated due to the adoption
of PSAK&nbsp;24R (see Note&nbsp;4a).
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-84

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>d.&nbsp;<U>Corporate income tax is computed for each
    individual company as a separate legal entity (consolidated
    financial statements are not applicable for computing corporate
    income tax)</U>.</I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    The reconciliation of consolidated income before tax to income
    before tax attributable to the Company and the consolidated
    income tax expense are as follows:</TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="59%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(As restated*)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consolidated income before tax</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,451,795</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,749,395</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,241,424</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Add back consolidation eliminations</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,332,176</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,936,524</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,737,400</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consolidated income before tax and eliminations</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,783,971</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,685,919</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,978,824</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deduct income before tax of the subsidiaries</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,009,179</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,485,296</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(12,645,854</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income before tax attributable to the Company</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,774,792</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,200,623</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,332,970</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Less: Income subject to final tax</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(279,142</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(206,601</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(285,075</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,495,650</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,994,022</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,047,895</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Tax calculated at progressive rates</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,248,678</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,398,189</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,714,351</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Non-taxable income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,017,791</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,181,983</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,724,483</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Non-deductible expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>328,835</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>322,884</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>315,041</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred tax (assets)&nbsp;liabilities originating from
    previously unrecognized temporary differences, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>71,144</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(14,940</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,900</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred tax assets that cannot be utilized, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,045</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Corporate income tax expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,630,866</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,548,195</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,298,009</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Final income tax expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>56,698</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>43,413</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41,396</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total income tax expense of the Company</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,687,564</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,591,608</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,339,405</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income tax expense of the subsidiaries</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,173,526</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,586,918</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,844,482</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total consolidated income tax expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,861,090</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,178,526</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,183,887</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    The reconciliation between income before tax attributable to the
    Company and the estimated taxable income for the years ended
    December&nbsp;31, 2003, 2004 and 2005 is as follows:</TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="57%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(As restated*)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income before tax attributable to the Company</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,774,792</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,200,623</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,332,970</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Less: Income subject to final tax</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(279,142</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(206,601</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(285,075</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,495,650</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,994,022</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,047,895</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Temporary differences:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation of property, plant and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>442,029</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>415,805</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>880,578</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Gain on sale of property, plant and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(25,495</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(12,874</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,143</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Allowance for doubtful accounts</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>166,341</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>491,577</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>308,193</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts receivable written-off</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(79,728</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(91,865</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(336,715</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Allowance for inventory obsolescence</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,543</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,385</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,228</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 8.0pt;color: #000000; background: #ffffff;">
*&nbsp;The 2004 figures have been restated due to the adoption
of PSAK&nbsp;24R (see Note&nbsp;4a).
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-85

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="57%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(As restated*)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Inventory written-off</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(693</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(12,183</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued early retirement benefits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(538,170</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(132,810</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued employee benefits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>262,082</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(139,064</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>67,792</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net periodic pension cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(271,503</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(264,796</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(164,008</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long service awards</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(15,617</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(46,908</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>69,264</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of intangible assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>751,927</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>851,060</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>896,883</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of landrights</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,356</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,419</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,441</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Provision for impairment of property, plant and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,401</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>616,768</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Gain on sale of long-term investments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(171,334</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Temporary differences of KSO units</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,782</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation of property, plant and equipment under
    revenue-sharing arrangements</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>63,424</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82,415</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>96,114</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of unearned income on revenue-sharing arrangements</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(58,379</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(82,033</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(135,662</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenue from transfer of property, plant and equipment under
    revenue-sharing arrangements</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,828</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest income/receivable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(45,835</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>45,835</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Payments of liability of business acquisition and the related
    interest</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(233,337</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(405,302</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consultant fees for acquisition of business</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(27,797</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign exchange loss on liability of business acquisition</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>342,073</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>190,206</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign exchange losses capitalized to property under
    construction</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(74,283</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capital leases</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,359</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss on procurement commitments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>79,359</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other provisions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>114,854</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total temporary differences</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>515,445</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,130,964</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,293,144</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Permanent differences:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net periodic post-retirement health care benefit cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>634,385</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>408,498</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>483,045</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of goodwill</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,270</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,270</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,270</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of discount on promissory notes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>224,931</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>109,786</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>74,632</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Tax penalties</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,645</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>59,850</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity in net income of associates and subsidiaries</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,313,831</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,939,944</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,748,277</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Gain on sale of long-term investments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(38,425</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 8.0pt;color: #000000; background: #ffffff;">
*&nbsp;The 2004 figures have been restated due to the adoption
of PSAK&nbsp;24R (see Note&nbsp;4a).
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-86

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="60%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(As restated*)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income from land/building rental</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(40,380</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Others</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>599,631</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>523,568</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>411,339</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total permanent differences</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,912,419</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,862,177</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,698,141</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Taxable income subject to corporate income tax</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,098,676</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,262,809</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,642,898</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Corporate income tax expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,829,585</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,878,825</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,992,852</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Final income tax expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>56,698</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>43,413</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41,396</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total current income tax expense of the Company</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,886,283</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,922,238</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,034,248</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current income tax expense of the subsidiaries</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,904,997</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,344,873</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,685,396</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total current income tax expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,791,280</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,267,111</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,719,644</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2003, Telkomsel received tax assessment letters for all taxes
covering the fiscal years 2000 and 2001. Telkomsel filed an
objection on a portion of the 2001 assessments which was partly
approved by Director of General of Taxes. As a result, Telkomsel
charged tax underpayments to expense in 2003 amounting to
Rp32,283&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 8.0pt;color: #000000; background: #ffffff;">
*&nbsp;The 2004 figures have been restated due to the adoption
of PSAK&nbsp;24R (see Note&nbsp;4a).
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-87

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>e.&nbsp;<U>Deferred tax assets and liabilities</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The details of the Company&#146;s and subsidiaries&#146;
deferred tax assets and liabilities are as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="36%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Charged)/</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Credited to</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Business</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Statements of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Acquisitions</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Income</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(As restated*)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(As restated*)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>The Company</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred tax assets:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Allowance for doubtful accounts</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>118,845</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>88,834</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>207,679</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Allowance for inventory obsolescence</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,527</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,967</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,494</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term investments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(14,138</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,823</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,685</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued early retirement benefits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39,843</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(39,843</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued employee benefits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>84,385</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(41,720</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>42,665</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued long service awards</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>142,084</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(14,073</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>128,011</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net periodic pension cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>511,143</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(77,704</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>433,439</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Liabilities of business acquisitions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>985,609</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,323</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,009,932</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total deferred tax assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>893,689</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>985,609</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(37,393</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,841,905</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred tax liabilities:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest receivables</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(13,750</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Difference between book and tax property, plant and
    equipment&#146;s net book value</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,568,675</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(713,140</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>83,161</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,198,654</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Landrights</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(546</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,025</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,571</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenue-sharing arrangements</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(58,453</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,816</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(41,637</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Intangible assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,527,798</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(341,909</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>255,321</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,614,386</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total deferred tax liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,169,222</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,055,049</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>368,023</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,856,248</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred tax liabilities of the Company, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,275,533</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(69,440</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>330,630</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,014,343</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred tax liabilities of the subsidiaries, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(671,179</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(242,045</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(913,224</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total deferred tax liabilities, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,946,712</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,927,567</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 8.0pt;color: #000000; background: #ffffff;">
*&nbsp;The 2004 figures have been restated due to the adoption
of PSAK&nbsp;24R (see Note&nbsp;4a).
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-88

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 18pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="38%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Charged)/</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Credited to</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Business</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Statements</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>December&nbsp;31,</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Acquisitions</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>of Income</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(As restated*)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>The Company</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred tax assets:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Allowance for doubtful accounts</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>207,679</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,283</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>205,396</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Allowance for inventory obsolescence</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,494</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,842</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,652</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term investments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,685</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,981</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,666</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued employee benefits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>42,665</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,338</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>63,003</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued long service awards</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>128,011</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,780</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>148,791</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net periodic pension cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>433,439</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(49,202</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>384,237</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capital leases</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,408</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,408</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Liabilities of business acquisitions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,009,932</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(64,529</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>945,403</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>58,265</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>58,265</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total deferred tax assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,841,905</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(10,084</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,831,821</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred tax liabilities:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Difference between book and tax property, plant and
    equipment&#146;s net book value</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,198,654</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>432,437</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,766,217</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Landrights</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,571</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,033</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,604</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenue-sharing arrangements</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(41,637</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,461</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(37,176</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Intangible assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,614,386</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>269,062</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,345,324</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total deferred tax liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,856,248</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>704,927</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,151,321</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred tax liabilities of the Company, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,014,343</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>694,843</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,319,500</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred tax liabilities of the subsidiaries, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(913,224</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(159,086</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,072,310</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total deferred tax liabilities, net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,927,567</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,391,810</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The net deferred tax liabilities of subsidiaries as of
December&nbsp;31, 2005 included deferred tax assets of
Rp123,309&nbsp;million arising from tax loss carryforwards
amounting to Rp411,030&nbsp;million which will expire in 2006.
Realization of the deferred tax assets is dependent upon
profitable operations. Although realization is not assured, the
Company and its subsidiaries believe that it is probable that
these deferred tax assets will be realized through the reduction
of future taxable income. The amount of deferred tax assets
considered realizable, however, could be reduced if actual
future taxable income is lower than estimated.
</DIV>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 8.0pt;color: #000000; background: #ffffff;">
*&nbsp;The 2004 figures have been restated due to the adoption
of PSAK&nbsp;24R (see Note&nbsp;4a).
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-89

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>f.&nbsp;<U>Administration</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the taxation laws of Indonesia, the Company submits tax
returns on the basis of self-assessment. The tax authorities may
assess or amend taxes within ten years from the date the tax
became payable.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company and its subsidiaries are being audited by the tax
authorities for various fiscal years. These tax audits are not
finalized at the date of these financial statements; however,
management believes that the outcome of these tax audits will
not be significant.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>40.&nbsp;</B></TD>
    <TD>
    <B>BASIC EARNINGS PER SHARE</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Net income per share is computed by dividing net income by the
weighted average number of shares outstanding during the year,
totaling 20,159,999,280 in 2003, 2004 and 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company does not have potentially dilutive ordinary shares.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>41.&nbsp;</B></TD>
    <TD>
    <B>CASH DIVIDENDS AND GENERAL RESERVE</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to the Annual General Meeting of Shareholders as stated
in notarial deed No.&nbsp;17/ V/2003 dated May&nbsp;9, 2003 of
A. Partomuan Pohan, S.H., LL.M., the stockholders approved the
distribution of cash dividends for 2002 amounting to
Rp3,338,109&nbsp;million or Rp331.16&nbsp;per share
(pre-split&nbsp;&#151; Note&nbsp;1b), and appropriation of
Rp813,664&nbsp;million for general reserve.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In connection with the restatement of the consolidated financial
statements for the three years ended December&nbsp;31, 2002, the
stockholders ratified the previous declaration of dividends in
the Extraordinary General Meeting of Stockholders as stated in
notarial deed No.&nbsp;4 dated March&nbsp;10, 2004 of Notary A.
Partomuan Pohan, S.H., LLM. as follows:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="3%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    Dividends for 2002 amounting to Rp3,338,109&nbsp;million or
    Rp331.16&nbsp;per share (pre-split), social contribution fund
    (&#147;Dana Bina Lingkungan&#148;) of Rp20,863&nbsp;million and
    appropriated Rp813,664&nbsp;million for general reserves.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    Dividends for 2001 amounting to Rp2,125,055&nbsp;million or
    Rp210.82&nbsp;per share (pre-split), and appropriated
    Rp425,012&nbsp;million for general reserves.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    Dividends for 2000 amounting to Rp888,654&nbsp;million or
    Rp88.16&nbsp;per share (pre-split), and appropriated
    Rp126,950&nbsp;million for general reserves.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to the Annual General Meeting of Shareholders as stated
in notarial deed No.&nbsp;25 dated July&nbsp;30, 2004 of A.
Partomuan Pohan, S.H., LL.M., the stockholders approved the
distribution of cash dividends for 2003 amounting to
Rp3,043,614&nbsp;million or Rp301.95&nbsp;per share (pre-split)
and appropriation of Rp121,745&nbsp;million for general reserve.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;7, 2004, the Company decided to distribute 2004
interim cash dividends of Rp143,377&nbsp;million or
Rp7.11&nbsp;per share to the Company&#146;s stockholders.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to the Annual General Meeting of Shareholders as stated
in notarial deed No.&nbsp;36 dated June&nbsp;24, 2005 of A.
Partomuan Pohan, S.H., LL.M., the stockholders approved the
distribution of cash dividends for 2004 amounting to
Rp3,064,604&nbsp;million or Rp152.01&nbsp;per share (of which
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-90

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Rp143,377&nbsp;million or Rp7.11&nbsp;per share was distributed
as interim cash dividends in December 2004) and appropriation of
Rp122,584&nbsp;million for general reserve.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>42.&nbsp;</B></TD>
    <TD>
    <B>PENSION PLANS</B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>a.&nbsp;<U>The Company</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company sponsors a defined benefit pension plan and a
defined contribution pension plan.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The defined benefit pension plan is provided for employees hired
with permanent status prior to July&nbsp;1, 2002. The pension
benefits are paid based on the participating employees&#146;
latest basic salary at retirement and years of service. The plan
is managed by Telkom Pension Fund (Dana Pensiun Telkom). The
participating employees contribute 18% (before March 2003: 8.4%)
of their basic salaries to the plan. The Company&#146;s
contributions to the pension fund for the years ended
December&nbsp;31, 2003, 2004 and 2005 amounted to
Rp486,324&nbsp;million, Rp845,743&nbsp;million and
Rp698,526&nbsp;million, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2002, the Company amended its defined benefit pension plan to
increase the pension benefits for certain participating
employees above 56&nbsp;years of age, beneficiaries of deceased
participating employees or employees with physical disabilities.
The increase applies to participating employees who retired on
or after July&nbsp;1, 2002. The Company also increased pension
benefits for employees who retired prior to August&nbsp;1, 2000
by 50%, effective January&nbsp;1, 2003.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The defined contribution pension plan is provided for employees
hired with permanent status on or after July&nbsp;1, 2002. The
plan is managed by a financial institution pension fund (Dana
Pensiun Lembaga Keuangan). The Company&#146;s annual
contribution to the defined contribution pension plan is
determined based on a certain percentage of the
participants&#146; salaries and amounted to Rp124&nbsp;million,
Rp399&nbsp;million and Rp971&nbsp;million in 2003, 2004 and
2005, respectively.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-91

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table presents the change in projected benefit
obligation, the change in plan assets, funded status of the plan
and the net amount recognized in the Company&#146;s balance
sheets for the years ended December&nbsp;31, 2004 and 2005 for
its defined benefit pension plan:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="66%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(As&nbsp;restated*)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Change in projected benefit obligation</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Projected benefit obligation at beginning of year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,852,923</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,315,182</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Service cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>137,264</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>138,117</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>740,494</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>789,830</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Plan participants&#146; contributions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>43,906</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41,371</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Actuarial gain</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(155,128</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(794,180</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Benefits paid</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(304,277</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(350,220</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Projected benefit obligation at end of year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,315,182</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,140,100</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Change in plan assets</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fair value of plan assets at beginning of year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,671,309</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,884,523</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Actual return on plan assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>627,842</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>155,754</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Employer contribution</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>845,743</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>698,526</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Plan participants&#146; contributions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>43,906</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41,371</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Benefits paid</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(304,277</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(350,220</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fair value of plan assets at end of year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,884,523</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,429,954</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Funded status</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,430,659</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,710,146</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unrecognized prior service cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,329,046</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,190,024</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unrecognized net actuarial gain</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(346,298</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(762,899</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Accrued pension benefit cost</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,447,911</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,283,021</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The movement of the accrued pension benefit cost during the
years ended December&nbsp;31, 2004 and 2005 is as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="66%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(As&nbsp;restated*)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued pension benefit cost at beginning of year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,713,546</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,447,911</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net periodic pension cost less amounts charged to KSO Units</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>563,739</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>514,976</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amounts charged to KSO Units under contractual agreement</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,369</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,660</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Contributions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(845,743</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(698,526</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued pension benefit cost at end of year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,447,911</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,283,021</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2004 and 2005, plan assets consist
mainly of Indonesian Government Bonds and corporate bonds. As of
December&nbsp;31, 2004, plan assets include bonds and
Series&nbsp;B shares issued by the Company with fair values of
Rp159,253&nbsp;million and Rp96,063&nbsp;million, respectively.
As of
</DIV>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 8.0pt;color: #000000; background: #ffffff;">
*&nbsp;The 2004 figures have been restated due to the adoption
of PSAK&nbsp;24R (see Note&nbsp;4a).
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-92

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
December&nbsp;31, 2005, plan assets include bonds and
Series&nbsp;B shares issued by the Company with fair values of
Rp223,736&nbsp;million and Rp124,189&nbsp;million, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The actuarial valuations for the defined benefit pension plan
performed based on measurement date of December&nbsp;31 for each
of the years were prepared on May&nbsp;21, 2004, March&nbsp;15,
2005 and February&nbsp;27, 2006, respectively, by PT Watson
Wyatt Purbajaga, an independent actuary in association with
Watson Wyatt Worldwide. The principal actuarial assumptions used
by the independent actuary as of December&nbsp;31, 2003, 2004
and 2005 are as follows.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="73%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Discount rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Expected long-term return on plan assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.5</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.5</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rate of compensation increase</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.8</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The components of net periodic pension cost are as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="64%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(As restated*)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Service cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>119,089</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>137,264</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>138,117</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>537,797</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>740,494</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>789,830</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Expected return on plan assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(421,706</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(436,672</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(533,333</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of prior service cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>156,784</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>139,022</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>139,022</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Recognized actuarial gain</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(205,099</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of unrecognized net transition obligation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28,634</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net periodic pension cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>215,499</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>580,108</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>533,636</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amount charged to KSO Units under contractual agreement</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(29,896</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(16,369</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(18,660</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total net periodic pension cost less amounts charged to KSO
    Units (Note&nbsp;36)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>185,603</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>563,739</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>514,976</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>b.&nbsp;<U>Telkomsel</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telkomsel provides a defined benefit pension plan for its
employees under which pension benefits to be paid are based on
the employee&#146;s latest basic salary and number of years of
service. PT Asuransi Jiwasraya (&#147;Jiwasraya&#148;), a
state-owned life insurance company, manages the plan. Up to
2004, the employees contributed 5% of their monthly basic
salaries to the plan and Telkomsel contributed any remaining
amount required to fund the plan. Beginning in 2005, the entire
contributions are borne by Telkomsel.
</DIV>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 8.0pt;color: #000000; background: #ffffff;">
*&nbsp;The 2004 figures have been restated due to the adoption
of PSAK&nbsp;24R (see Note&nbsp;4a).
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-93

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telkomsel&#146;s contributions to Jiwasraya amounted to
Rp3,081&nbsp;million, nil and Rp14,928&nbsp;million for the
years ended 2003, 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The components of the net periodic pension cost are as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="71%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Service cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,068</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,155</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,072</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,499</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,889</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,650</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Expected return on plan assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,013</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(824</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(832</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of prior service cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>115</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>115</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Recognized actuarial loss</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>579</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,158</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,320</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of unrecognized net transition obligation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>178</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net periodic pension cost (Note&nbsp;36)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,311</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,493</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,325</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The net periodic pension cost for the pension plan is calculated
based on the actuarial calculation prepared by PT Watson Wyatt
Purbajaga, an independent actuary in association with Watson
Wyatt Worldwide. The principal actuarial assumptions used by the
independent actuary based on measurement date of
December&nbsp;31 for each of the years are as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="73%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Discount rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Expected long-term return on plan assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.5</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.5</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.5</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rate of compensation increase</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The reconciliation of the funded status of the plan with the net
amount recognized in the balance sheets of Telkomsel as of
December&nbsp;31, 2004 and 2005 is as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="74%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Projected benefit obligation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(43,547</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(147,103</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fair value of plan assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,182</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,971</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Funded status</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(32,365</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(126,132</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unrecognized prior service cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,328</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,213</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unrecognized net actuarial loss</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,707</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>103,391</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued pension benefit cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(10,330</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(21,528</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-94

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>c.&nbsp;<U>Infomedia</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Infomedia provides a defined benefit pension plan for its
employees. The reconciliation of the funded status of the plan
with the net amount recognized in the balance sheets as of
December&nbsp;31, 2004 and 2005 is as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="78%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Projected benefit obligation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,051</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,225</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fair value of plan assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,413</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,865</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Funded status</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,362</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>640</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Prepaid pension benefit cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,362</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>640</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The net periodic pension cost of Infomedia amounted to
Rp60&nbsp;million, Rp187&nbsp;million and Rp30&nbsp;million for
the years ended December&nbsp;31, 2003, 2004 and 2005,
respectively.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>d.&nbsp;<U>Obligation Under Labor Law</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Law No.&nbsp;13/2003 concerning labor regulation, the
Company and its subsidiaries are required to provide a minimum
pension benefit, if not already covered by the sponsored pension
plans, to their employees upon retiring at the age of 55. The
total related obligation recognized as of December&nbsp;31, 2004
and 2005 amounted to Rp21,677&nbsp;million and
Rp26,115&nbsp;million, respectively. The total related employee
benefit cost charged to expense amounted to
Rp4,439&nbsp;million, Rp11,510&nbsp;million and
Rp5,954&nbsp;million for the years ended December&nbsp;31, 2003,
2004 and 2005, respectively.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>43.&nbsp;</B></TD>
    <TD>
    <B>LONG SERVICE AWARDS</B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>a.&nbsp;<U>The Company</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company provides certain cash awards for its employees who
meet certain length of service requirement. The benefits are
either paid at the time the employee reaches certain anniversary
dates during employment, upon retirement or termination.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The actuarial valuations for the long service awards performed
based on measurement date of December&nbsp;31 for each of the
years were prepared on May&nbsp;21, 2004, March&nbsp;15, 2005
and February&nbsp;27, 2006, respectively, by PT Watson Wyatt
Purbajaga, an independent actuary in association with Watson
Wyatt Worldwide. The principal actuarial assumptions used by the
independent actuary as of December&nbsp;31, 2003, 2004 and 2005
are as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="73%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Discount rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>11</TD>
    <TD align="left" valign="top" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>11</TD>
    <TD align="left" valign="top" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>11</TD>
    <TD align="left" valign="top" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rate of compensation increase</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>8</TD>
    <TD align="left" valign="top" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>8</TD>
    <TD align="left" valign="top" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>8</TD>
    <TD align="left" valign="top" nowrap>%</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-95

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The movement of the accrued long service awards during the years
ended December&nbsp;31, 2003, 2004 and 2005 is as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="66%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(As restated*)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued long service awards at beginning of year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>489,231</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>473,614</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>426,705</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net periodic benefit cost (Note&nbsp;36)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>207,126</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31,148</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>192,450</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Benefits paid</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(222,743</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(78,057</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(123,186</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued long service awards at end of year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>473,614</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>426,705</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>495,969</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>b.&nbsp;<U>Telkomsel</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telkomsel provides certain cash awards for its employees based
on the employees&#146; length of service. The benefits are
either paid at the time the employee reaches certain anniversary
dates during employment, upon retirement or at the time of
termination.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The obligation with respect to these awards is determined based
on actuarial valuation using the Projected Unit Credit Method,
and amounted to Rp23,136&nbsp;million and Rp28,555&nbsp;million
as of December&nbsp;31, 2004 and 2005, respectively. The related
benefit cost charged to expense amounted to
Rp12,113&nbsp;million, Rp5,713&nbsp;million and
Rp9,428&nbsp;million for the years ended December&nbsp;31, 2003,
2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>44.&nbsp;POST-RETIREMENT HEALTH CARE BENEFITS</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company provides a post-retirement health care plan for all
of its employees hired before November&nbsp;1, 1995 who have
worked for the Company for 20&nbsp;years or more when they
retire, and to their eligible dependents. The requirement of
working for over 20 or more years does not apply to employees
who retired prior to June&nbsp;3, 1995. However, the employees
hired by the Company starting from November&nbsp;1, 1995 will no
longer be entitled to this plan. The plan is managed by Yayasan
Kesehatan Pegawai Telkom (&#147;YKPT&#148;).
</DIV>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 8.0pt;color: #000000; background: #ffffff;">
*&nbsp;The 2004 figures have been restated due to the adoption
of PSAK&nbsp;24R (see Note&nbsp;4a).
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-96

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The components of net periodic post-retirement health care
benefit cost are as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="68%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(As restated*)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Service cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>88,394</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>76,163</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>87,636</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>493,596</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>411,110</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>507,994</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Expected return on plan assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(56,004</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(61,084</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(103,498</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of prior service gain</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(368</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Recognized actuarial loss</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>99,287</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,081</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of unrecognized net transition obligation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,325</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net periodic post-retirement benefit cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>649,230</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>426,189</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>500,213</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amounts charged to KSO Units under contractual agreement</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,795</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(9,913</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11,627</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total net periodic post-retirement benefit cost less amounts
    charged to KSO Units (Note&nbsp;36)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>641,435</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>416,276</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>488,586</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The actuarial valuations for the post-retirement health care
benefits performed based on measurement date of December&nbsp;31
for each of the years were prepared on May&nbsp;21, 2004,
March&nbsp;15, 2005 and February&nbsp;27, 2006, respectively, by
PT Watson Wyatt Purbajaga, an independent actuary in association
with Watson Wyatt Worldwide.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The principal actuarial assumptions used by the independent
actuary as of December&nbsp;31, 2003, 2004 and 2005 are as
follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="73%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Discount rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Expected long-term return on plan assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Health care cost trend rate assumed for next year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    The ultimate trend rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Year that the rate reaches the ultimate trend rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2006</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 8.0pt;color: #000000; background: #ffffff;">
*&nbsp;The 2004 figures have been restated due to the adoption
of PSAK&nbsp;24R (see Note&nbsp;4a).
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-97

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table presents the change in projected benefit
obligation, the change in plan assets, funded status of the plan
and the net amount recognized in the Company&#146;s balance
sheets as of December&nbsp;31, 2004 and 2005:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="66%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(As restated*)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Change in projected benefit obligation</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Projected benefit obligation at beginning of year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,787,389</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,681,005</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Service cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>76,163</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>87,636</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>411,110</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>507,994</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Actuarial loss</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>529,618</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>423,833</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Benefits paid</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(123,275</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(125,979</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Projected benefit obligation at end of year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,681,005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,574,489</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Change in plan assets</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fair value of plan assets at beginning of year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>505,340</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,138,768</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Actual return on plan assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32,173</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>45,209</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Employer contributions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>724,530</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>435,899</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Benefits paid</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(123,275</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(125,979</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fair value of plan assets at end of year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,138,768</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,493,897</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Funded status</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,542,237</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,080,592</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unrecognized net actuarial loss</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>558,530</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,032,571</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Accrued post-retirement health care benefit cost</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,983,707</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,048,021</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2004, plan assets include Medium-term
Notes issued by the Company with fair value of
Rp145,000&nbsp;million. As of December&nbsp;31, 2005, plan
assets include bonds and Medium-term Notes issued by the Company
with total fair value of Rp232,394&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The movement of the accrued post-retirement health care benefit
cost during the years ended December&nbsp;31, 2004 and 2005 is
as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="67%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(As restated*)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued post-retirement health care benefit cost at beginning of
    year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,282,048</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,983,707</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net periodic post-retirement health care benefit cost less
    amounts charged to KSO Units</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>416,276</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>488,586</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amounts charged to KSO Units under contractual agreement</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,913</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,627</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Contributions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(724,530</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(435,899</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued post-retirement health care benefit cost at end of year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,983,707</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,048,021</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 8.0pt;color: #000000; background: #ffffff;">
*&nbsp;The 2004 figures have been restated due to the adoption
of PSAK&nbsp;24R (see Note&nbsp;4a).
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-98

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A 1% increase in the cost trend rate would result in service
cost and interest cost, and accumulated post-retirement health
care benefit obligation as of December&nbsp;31, 2003, 2004 and
2005 as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="62%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Service cost and interest cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>594,958</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>723,941</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>872,159</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accumulated post-retirement health care benefit obligation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,545,961</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,597,965</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,718,434</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>45.&nbsp;RELATED PARTY INFORMATION</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the normal course of business, the Company and its
subsidiaries entered into transactions with related parties. It
is the Company&#146;s policy that the pricing of these
transactions be the same as those of arms-length transactions.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following are significant agreements/transactions with
related parties:
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>a.&nbsp;<U>Government of the Republic of Indonesia</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
i.&nbsp;The Company obtained &#147;two-step loans&#148; from the
Government of the Republic of Indonesia, the Company&#146;s
majority stockholder.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Interest expense for two-step loans amounted to
Rp755,517&nbsp;million, Rp489,220&nbsp;million and
Rp324,652&nbsp;million in 2003, 2004 and 2005, respectively.
Interest expense for two-step loan reflected 54.6%, 38.5% and
27.6% of total interest expense in 2003, 2004 and 2005,
respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ii.&nbsp;The Company and its subsidiaries pay 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.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Concession fees amounted to Rp238,979&nbsp;million,
Rp314,741&nbsp;million and Rp558,485&nbsp;million in 2003, 2004
and 2005, respectively. Concession fees reflected 1.6%, 1.6% and
2.3% of total operating expenses in 2003, 2004 and 2005,
respectively. Radio frequency usage charges amounted to
Rp371,740&nbsp;million, Rp492,568&nbsp;million and
Rp548,186&nbsp;million in 2003, 2004 and 2005, respectively.
Radio frequency usage charges reflected 2.5%, 2.5% and 2.2% of
total operating expenses in 2003, 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
iii.&nbsp;Beginning in 2005, the Company and its subsidiaries
pay Universal Service Obligation (&#147;USO&#148;) charges to
the Ministry of Communications and Information
(&#147;MoCI&#148;) of the Republic of Indonesia pursuant to the
MoCI Regulation No.&nbsp;15/ PER/ M.KOMINFO/9/2005 of
September&nbsp;30, 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
USO charges amounted to Rp307,705&nbsp;million in 2005, which
reflected 1.2% of total operating expenses in 2005.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>b.&nbsp;<U>Commissioners and Directors Remuneration</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
i.&nbsp;The Company and its subsidiaries provide honorarium and
facilities to support the operational duties of the Board of
Commissioners. The total of such benefits amounted to
Rp14,047&nbsp;million, Rp22,700&nbsp;million and
Rp19,707&nbsp;million in 2003, 2004 and 2005, respectively,
which reflected 0.1%, 0.1% and 0.1% of total operating expenses
in 2003, 2004 and 2005, respectively.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-99

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ii.&nbsp;The Company and its subsidiaries provide salaries and
facilities to support the operational duties of the Board of
Directors. The total of such benefits amounted to
Rp45,586&nbsp;million, Rp50,327&nbsp;million and
Rp52,147&nbsp;million in 2003, 2004 and 2005, respectively,
which reflected 0.3%, 0.3% and 0.2% of total operating expenses
in 2003, 2004 and 2005, respectively.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>c.&nbsp;<U>Indosat</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Through December&nbsp;19, 2002, the Government was the majority
and controlling shareholder of Indosat and therefore, Indosat
was under the same common control as the Company. Following the
sale of the Government&#146;s 41.94% ownership interest in
Indosat on December&nbsp;20, 2002 (Note&nbsp;29), the
Government&#146;s ownership interest in Indosat was reduced to
approximately 15%. The Company still considers Indosat as a
related party because the Government can exert significant
influence over the financial and operating policies of Indosat
by virtue of its right to appoint one director and one
commissioner of Indosat.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Following the merger of Indosat, PT Indosat Multimedia Mobile
(&#147;IM3&#148;), Satelindo and PT Bimagraha Telekomindo on
November&nbsp;20, 2003, all rights and obligations arising from
the agreements entered by the Company with IM3 and Satelindo
were transferred to Indosat.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has an agreement with Indosat for the provision of
international telecommunications services to the public.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The principal matters covered by the agreement are as follows:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    i.&nbsp;The Company provides a local network for 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, package switched data network, television,
    teleprinter, Alternate Voice/ Data Telecommunications
    (&#147;AVD&#148;), hotline and teleconferencing.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    ii.&nbsp;The Company and Indosat are responsible for their
    respective telecommunications facilities.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    iii.&nbsp;Customer billing and collection, except for leased
    lines and public phones located at the international gateways,
    are handled by the Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    iv.&nbsp;The Company receives compensation for the services
    provided in the first item above, based on the interconnection
    tariff determined by the Minister of Communications of the
    Republic of Indonesia.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has also entered into an interconnection agreement
between the Company&#146;s fixed-line network and Indosat&#146;s
cellular network in connection with the implementation of
Indosat Multimedia Mobile services and the settlement of the
related interconnection rights and obligations.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company also has an agreement with Indosat for the
interconnection of Indosat&#146;s GSM mobile cellular
telecommunications network with the Company&#146;s PSTN,
enabling the Company&#146;s customers to make outgoing calls to
or receive incoming calls from Indosat&#146;s customers.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s compensation relating to leased lines/channel
services, such as International Broadcasting System
(&#147;IBS&#148;), AVD and bill printing is calculated at 15% of
Indosat&#146;s revenues from
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-100

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
such services. Through year-end 2003, Indosat leased circuits
from the Company to link Jakarta, Medan and Surabaya. In 2004
and 2005, Indosat did not use this service.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has been handling customer billings and collections
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 beginning January&nbsp;1, 1995,
plus the billing process expenses which are fixed at a certain
amount per record.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telkomsel also entered into an agreement with Indosat for the
provision of international telecommunications services to GSM
mobile cellular customers. The principal matters covered by the
agreement are as follows:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    i.&nbsp;Telkomsel&#146;s GSM mobile cellular telecommunications
    network is connected to Indosat&#146;s international gateway
    exchanges to make outgoing or receive incoming international
    calls through Indosat&#146;s international gateway exchanges.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    ii.&nbsp;Telkomsel&#146;s GSM mobile cellular telecommunications
    network is connected to Indosat&#146;s mobile cellular
    telecommunications network, enabling Telkomsel&#146;s cellular
    subscribers to make outgoing calls to or receive incoming calls
    from Indosat&#146;s cellular subscribers.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    iii.&nbsp;Telkomsel receives as compensation for the
    interconnection, a specific percentage of Indosat&#146;s
    revenues from the related services which are made through
    Indosat&#146;s international gateway exchanges and mobile
    cellular telecommunications network.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    iv.&nbsp;Billings for calls made by Telkomsel&#146;s customers
    are handled by Telkomsel. Telkomsel is obliged to pay
    Indosat&#146;s share of revenue regardless whether billings to
    customers have been collected.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    v.&nbsp;The provision and installation of the necessary
    interconnection equipment is Telkomsel&#146;s responsibility.
    Interconnection equipment installed by one of the parties in
    another party&#146;s locations shall remain the property of the
    party installing such equipment. Expenses incurred in connection
    with the provision of equipment, installation and maintenance
    are borne by Telkomsel.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telkomsel also has an agreement with Indosat on the usage of
Indosat&#146;s telecommunications facilities. The agreement,
which was made in 1997 and is valid for eleven years, is subject
to change based on an annual review and mutual agreement by both
parties. The charges for the usage of the facilities amounted to
Rp17,933&nbsp;million, Rp19,101&nbsp;million and
Rp19,066&nbsp;million in 2003, 2004 and 2005, respectively,
reflecting 0.1%, 0.1% and 0.1% of total operating expenses in
2003, 2004 and 2005, respectively. Other agreements between
Telkomsel and Indosat are as follows:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    i.&nbsp;Agreement on Construction and Maintenance for
    Jakarta-Surabaya Cable System
    <FONT style="white-space: nowrap">(&#147;J-S&nbsp;</FONT>Cable
    System&#148;).</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    On October&nbsp;10, 1996, Telkomsel, Lintasarta, Satelindo and
    Indosat (the &#147;Parties&#148;) entered into an agreement on
    the construction and maintenance of the J-S Cable System. The
    Parties have formed a management committee which consists of a
    chairman and one representative from each of the Parties to
    direct the construction and operation of the cable system. The
    construction of the cable system was completed in 1998. In
    accordance with the agreement, Telkomsel shared 19.325% of the
    total construction cost. Operating and maintenance costs are
    shared based on an agreed formula.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-101

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Telkomsel&#146;s share in operating and maintenance costs
    amounted to Rp1,393&nbsp;million, Rp2,098&nbsp;million and
    Rp1,187&nbsp;million for the years 2003, 2004 and 2005,
    respectively.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    ii.&nbsp;Indefeasible Right of Use Agreement</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    On September&nbsp;21, 2000, Telkomsel entered into agreement
    with Indosat on the use of SEA&nbsp;&#151; ME&nbsp;&#151; WE 3
    and tail link in Jakarta and Medan. In accordance with the
    agreement, Telkomsel was granted an indefeasible right to use
    certain capacity of the Link starting from September&nbsp;21,
    2000 until September&nbsp;20, 2015 in return for an upfront
    payment of US$2.7&nbsp;million. In addition to the upfront
    payment, Telkomsel is also charged annual operating and
    maintenance costs amounting to US$0.1&nbsp;million.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to the expiration of the agreement between Telkomsel
and Indosat with regard to the provision of international
telecommunication services to GSM mobile cellular customers, in
April 2004 Telkomsel and Indosat entered into an interim
agreement. Under the terms of the interim agreement, Telkomsel
receives 27% of the applicable tariff for outgoing international
calls from Telkomsel subscribers and Rp800&nbsp;per minute for
incoming international calls to Telkomsel subscribers. The
interim agreement is effective from March&nbsp;1, 2004 until
such date that Telkomsel and Indosat enter into a new agreement.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company and its subsidiaries earned net interconnection
revenues from Indosat of Rp235,655&nbsp;million in 2003,
reflecting 0.9% of total operating revenues in 2003. The Company
and its subsidiaries were charged net interconnection charges
from Indosat of Rp158,285&nbsp;million and Rp52,798&nbsp;million
in 2004 and 2005, respectively, reflecting 0.5% and 0.1% of
total operating revenues in 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company leased international circuits from Indosat. Payments
made in relation to the lease expense amounted to
Rp30,239&nbsp;million in 2003, reflecting 0.2% of total
operating expenses for 2003.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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. Based
on the transfer agreement, Satelindo is given the right to use
the land for 30&nbsp;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 Rp43,023&nbsp;million to the
Company for the thirty-year right. Satelindo paid
Rp17,210&nbsp;million in 1994 and the remaining
Rp25,813&nbsp;million was not paid because the Utilization Right
(&#147;Hak Pengelolaan Lahan&#148;) on the land could not be
delivered as provided in the transfer agreement. In 2000, the
Company and Satelindo agreed on an alternative solution
resulting in which the payment is treated as a lease expense up
to 2006. In 2001, Satelindo paid an additional amount of
Rp59,860&nbsp;million as lease expense up to 2024. As of
December&nbsp;31, 2004 and 2005, the prepaid portion is shown in
the consolidated balance sheets as &#147;Advances from customers
and suppliers.&#148;
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company provides leased lines to Indosat and its
subsidiaries, namely Indosat Mega Media and Lintasarta. The
leased lines can be used by those companies for telephone,
telegraph, data, telex, facsimile or other telecommunication
services. Revenue earned from these transactions amounted to
Rp43,595&nbsp;million, Rp109,814&nbsp;million and
Rp126,425&nbsp;million in 2003, 2004 and 2005, respectively,
which reflected 0.2%, 0.3% and 0.3% of total operating revenues
in 2003, 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lintasarta utilizes the Company&#146;s satellite transponders or
frequency channels. Revenue earned from these transactions
amounted to Rp23,672&nbsp;million, Rp14,486&nbsp;million and
Rp8,125&nbsp;million in 2003,
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-102

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
2004 and 2005, respectively, which reflected 0.1%, less than
0.1% and less than 0.1% of total operating revenues in 2003,
2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telkomsel has an agreement with Lintasarta and PT Artajasa
Pembayaran Elektronis (&#147;Artajasa&#148;) for the usage of
data communication network system. The charges from Lintasarta
and Artajasa for the services amounted to Rp10,975&nbsp;million,
Rp21,407&nbsp;million and Rp23,109&nbsp;million in 2003, 2004
and 2005, respectively, reflecting 0.1%, 0.1% and 0.1% of total
operating expenses in 2003, 2004 and 2005, respectively.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>d.&nbsp;<U>Others</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;The Company provides telecommunication services to
substantially all Government agencies in Indonesia.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(ii)&nbsp;The Company has entered into agreements with
Government agencies and associated companies, namely CSM,
Patrakom and KSO VII, for utilization of the Company&#146;s
satellite transponders or frequency channels. Revenue earned
from these transactions amounted to Rp73,205&nbsp;million,
Rp51,046&nbsp;million and Rp66,804&nbsp;million in 2003, 2004
and 2005, respectively, which reflected 0.3%, 0.2% and 0.2% of
total operating revenues in 2003, 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(iii)&nbsp;The Company provides leased lines to associated
companies, namely CSM, Patrakom and PSN. The leased lines can be
used by the associated companies for telephone, telegraph, data,
telex, facsimile or other telecommunications services. Revenue
earned from these transactions amounted to
Rp44,738&nbsp;million, Rp25,714&nbsp;million and
Rp30,678&nbsp;million in 2003, 2004 and 2005, respectively,
reflecting 0.2%, 0.1% and 0.1% of total operating revenues in
2003, 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(iv)&nbsp;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 (&#147;PT INTI&#148;), Lembaga
Elektronika Nasional, PT Adhi Karya, PT Pembangunan Perumahan,
PT Nindya Karya, PT Boma Bisma Indra, PT Wijaya Karya, PT
Waskita Karya, PT Gratika and Koperasi Pegawai Telkom. Total
purchases made from these related parties amounted to
Rp126,965&nbsp;million, Rp268,901&nbsp;million and
Rp337,648&nbsp;million in 2003, 2004 and 2005, respectively,
reflecting 1.1%, 2.4%, and 2.5% of total fixed asset purchases
in 2003, 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(v)&nbsp;PT INTI is also a major contractor and supplier of
equipment, including construction and installation services for
Telkomsel. Total purchases from PT INTI in 2003, 2004 and 2005
amounted to Rp52,346&nbsp;million, Rp217,668&nbsp;million and
Rp67,555&nbsp;million, respectively, reflecting 0.5%, 1.9% and
0.5% of total fixed asset purchases in 2003, 2004 and 2005,
respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(vi)&nbsp;Telkomsel has an agreement with PSN for lease of
PSN&#146;s transmission link. Based on the agreement, which was
made on March&nbsp;14, 2001, the minimum lease period is
2&nbsp;years since the operation of the transmission link and is
extendable subject to agreement by both parties. The lease
charges amounted to Rp40,519&nbsp;million, Rp49,710&nbsp;million
and Rp95,206&nbsp;million in 2003, 2004 and 2005, respectively,
reflecting 0.3%, 0.3% and 0.4% of total operating expenses in
2003, 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(vii)&nbsp;The Company and its subsidiaries carry insurance (on
their property, plant and equipment against property losses,
inventory and on employees&#146; social security) obtained from
PT Asuransi Jasa Indonesia, PT Asuransi Tenaga Kerja and PT
Persero Asuransi Jiwasraya, which are state-owned
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-103

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
insurance companies. Insurance premiums charged amounted to
Rp159,517&nbsp;million, Rp148,279&nbsp;million and
Rp58,338&nbsp;million in 2003, 2004 and 2005, respectively,
reflecting 1.1%, 0.8% and 0.2% of total operating expenses in
2003, 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(viii)&nbsp;The Company and its subsidiaries maintain current
accounts and time deposits in several state-owned banks. In
addition, some of those banks are appointed as collecting agents
for the Company. Total placements in form of current accounts
and time deposits, and mutual funds in state-owned banks
amounted to Rp2,116,038&nbsp;million and
Rp3,315,428&nbsp;million as of December&nbsp;31, 2004 and 2005,
respectively, reflecting 3.8% and 5.3% of total assets as of
December&nbsp;31, 2004 and 2005, respectively. Interest income
recognized during 2003, 2004 and 2005 was
Rp273,986&nbsp;million, Rp150,367&nbsp;million and
Rp123,951&nbsp;million reflecting 74.9%, 47.3% and 36% of total
interest income in 2003, 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(ix)&nbsp;The Company&#146;s subsidiaries have loans from a
state-owned bank. Interest expense on the loans for 2004 and
2005 amounted to Rp9,115&nbsp;million and Rp5,055&nbsp;million,
respectively, representing 0.7% and 0.4% of total interest
expense in 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(x)&nbsp;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&nbsp;&#151; a
foundation managed by Dharma Wanita Telkom. Total charges from
these transactions amounted to Rp32,785&nbsp;million,
Rp24,921&nbsp;million and Rp39,146&nbsp;million in 2003, 2004
and 2005, respectively, reflecting 0.2%, 0.1% and 0.2% of total
operating expenses in 2003, 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(xi)&nbsp;In 2003, the Company purchased encoded phone cards
from Perusahaan Umum Percetakan Uang Republik Indonesia
(&#147;Peruri&#148;), a state-owned company. The cost of the
phone cards amounted to Rp7,730&nbsp;million, reflecting 0.05%
of total operating expenses for 2003.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(xii)&nbsp;The Company and its subsidiaries earned (were charged
for) interconnection revenues (charges)&nbsp;from PSN, with a
total of Rp19,035&nbsp;million, (Rp5,495&nbsp;million) and
Rp1,072&nbsp;million in 2003, 2004 and 2005, respectively,
reflecting 0.1%, (0.02%) and less than 0.01% of total operating
revenues in 2003, 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(xiii)&nbsp;In addition to revenues earned under the KSO
Agreement (Note&nbsp;47), the Company also earned income from
building rental, repairs and maintenance services and training
services provided to the KSO Units, amounting to
Rp23,147&nbsp;million, Rp18,449&nbsp;million and
Rp26,769&nbsp;million in 2003, 2004 and 2005, respectively,
reflecting 0.1%, 0.1% and 0.1% of total operating revenues in
2003, 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(xiv)&nbsp;The Company has revenue-sharing arrangements with
Koperasi Pegawai Telkom (&#147;Kopegtel&#148;). Kopegtel&#146;s
share in the revenues from these arrangements amounted to
Rp20,560&nbsp;million and Rp31,909&nbsp;million in 2004 and
2005, respectively, representing 0.1% and 0.1% of total
operating revenues in 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(xv)&nbsp;Telkomsel has operating lease agreements with Patrakom
and CSM for the usage of their transmission link for a period of
three years, subject to extensions. The lease charges amounted to
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-104

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
Rp25,032&nbsp;million and Rp123,857&nbsp;million in 2004 and
2005, respectively, representing 0.1% and 0.5% of total
operating expenses in 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvi)&nbsp;Kisel
is a cooperative that was established by Telkomsel&#146;s
employees to engage in car rental services, printing and
distribution of customer bills, collection and other services
principally for the benefit of Telkomsel. For these services,
Kisel charged Telkomsel Rp109,548&nbsp;million and
Rp78,714&nbsp;million in 2004 and 2005, respectively. Telkomsel
also has dealership agreements with Kisel for distribution of
SIM cards and pulse reload vouchers. Total SIM cards and pulse
reload vouchers which were sold to Kisel amounted to
Rp816,591&nbsp;million and Rp1,158,559&nbsp;million in 2004 and
2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(xvii)&nbsp;Infomedia provides electronic media and call center
services to KSO Unit VII based on an agreement dated
March&nbsp;4, 2003. Revenue earned from these transactions in
2004 and 2005 amounted to Rp5,541&nbsp;million and
Rp9,221&nbsp;million, reflecting 0.02% and 0.02% of total
operating revenues in 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(xviii)&nbsp;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.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Presented below are balances of accounts with related parties:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="43%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2004 (As restated*)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>% of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>% of</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amount</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total Assets</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amount</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total Assets</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>a. Cash and cash equivalents (Note&nbsp;6)</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,944,154</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,058,854</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.92</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>b. Temporary investments</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,290</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>c. Trade accounts receivable, net (Note&nbsp;7)</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>419,104</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>530,370</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.85</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>d. Other accounts receivable</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    KSO Units</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,300</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>93,959</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.15</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    State-owned banks (interest)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,717</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,555</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.01</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Government agencies</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,433</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>421</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.00</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,765</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.03</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,304</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.03</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>29,215</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>119,239</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.19</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>e. Prepaid expenses (Note&nbsp;9)</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,440</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.04</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>299,799</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.48</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>f. Other current assets (Note&nbsp;10)</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44,608</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.08</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>159,537</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.26</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

</DIV>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 0pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 8.0pt;color: #000000; background: #ffffff;">
 *&nbsp;The 2004 figures have been restated due to the adoption
of PSAK&nbsp;24R (see Note&nbsp;4a).
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-105

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="43%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2004 (As restated*)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>% of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>% of</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amount</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total Assets</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amount</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total Assets</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>g. Advances and other non-current assets (Note&nbsp;14)</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Mandiri</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>113,762</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>90,668</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.15</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Peruri</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>813</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>813</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.00</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT Asuransi Jasa Indonesia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23,104</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.04</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.00</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>137,679</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.24</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>91,481</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.15</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>h. Escrow accounts (Note&nbsp;16)</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,222</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,369</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.01</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="42%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2004 (As restated*)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>% of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>% of</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amount</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Liabilities</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amount</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Liabilities</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>i. Trade accounts payable (Note&nbsp;17)</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Government agencies</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>259,678</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.78</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>660,166</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.03</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    KSO Units</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,312</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.07</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,281</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.05</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Indosat</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>150,631</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46,372</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.14</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Koperasi Pegawai Telkom</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>78,717</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.24</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>78,673</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.24</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PSN</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT INTI</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>77,591</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>125,792</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.39</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Others</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>52,126</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>88,105</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.27</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>643,094</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.93</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,014,389</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.12</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>j. Accrued expenses (Note&nbsp;18)</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Government&nbsp;agencies&nbsp;and&nbsp;state-owned&nbsp;ba</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>nks 204,50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4 0.62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>395,791</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.22</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Employees</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>321,237</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.97</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>452,413</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.39</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    PT Asuransi Jasa Indonesia</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,040</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,038</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.01</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Others</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,729</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.03</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>38,442</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.11</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>537,510</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.63</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>888,684</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.73</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

</DIV>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 0pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 8.0pt;color: #000000; background: #ffffff;">
 *&nbsp;The 2004 figures have been restated due to the adoption
of PSAK&nbsp;24R (see Note&nbsp;4a).
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-106

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="42%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2004 (As restated*)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>% of</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>% of</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amount</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Liabilities</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amount</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Liabilities</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>k. Short-term bank loans (Note&nbsp;20)</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Mandiri</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41,433</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>l. Two-step loans (Note&nbsp;22)</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,018,705</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18.18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,329,477</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16.36</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>m. Accrued long service awards (Note&nbsp;43)</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>449,841</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.36</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>524,524</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.61</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>n. Accrued post-retirement health care benefits
    (Note&nbsp;44)</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,983,707</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,048,021</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9.36</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>o. Long-term bank loans (Note&nbsp;24)</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank Mandiri</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>59,729</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,918</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.05</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>46. SEGMENT INFORMATION</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company and its subsidiaries have three main business
segments: fixed wireline, fixed wireless and cellular. The fixed
wireline segment provides local, domestic long-distance and
international (starting 2004) telephone services, and other
telecommunications services (including among others, leased
lines, telex, transponder, satellite and Very Small Aperture
Terminal-VSAT) as well as ancillary services. The fixed wireless
segment provides CDMA-based telecommunication services which
offers customers the ability to use a wireless handset with
limited mobility (within a local code area). The cellular
segment provides basic telecommunication services, particularly
mobile cellular telecommunication services. Operating segments
that do not individually represent more than 10% of the
Company&#146;s revenues are presented as &#147;Other&#148;
comprising the telephone directories and building management
businesses. In 2005, a re-alignment of management
responsibilities caused a change in segment reporting. The fixed
wireless telecommunication services business segment is now
presented as a separate segment. This change in segment has been
reflected for all periods presented.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Segment revenues and expenses include transactions between
business segments and are accounted for at prices that
management believes represent market prices.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

</DIV>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 0pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD> *&nbsp;</TD>
    <TD align="left">
    The 2004 figures have been restated due to the adoption of
    PSAK&nbsp;24R (see Note&nbsp;4a).</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-107

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9.0pt; margin-top: 18pt; ">

<TR style="font-size: 1pt;">
    <TD width="25%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap><B>2003</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Fixed</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Fixed</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total Before</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Wireline</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Wireless</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Cellular</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Other</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Elimination</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Elimination</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Consolidated</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Segment results</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    External operating revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,905,112</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>163,384</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,797,555</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>249,872</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27,115,923</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27,115,923</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Inter-segment operating revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>71,938</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,715</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>337,100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30,824</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>490,577</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(490,577</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,977,050</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>214,099</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,134,655</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>280,696</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27,606,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(490,577</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27,115,923</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Segment expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(10,350,686</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(246,165</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,802,283</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(275,499</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(15,674,633</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>534,649</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(15,139,984</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Segment result</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,626,364</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(32,066</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,332,372</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,197</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,931,867</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44,072</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,975,939</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,383,446</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>366,024</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Gain on foreign exchange&nbsp;&#151; net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>126,121</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other income (expenses)&nbsp;&#151; net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>364,338</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Tax expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,861,090</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity in net income of associated companies</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,819</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income before minority interest</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,590,705</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unallocated minority interest</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,503,478</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,087,227</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-108

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="25%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap><B>2003</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Fixed</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Fixed</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total Before</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Wireline</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Wireless</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Cellular</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Other</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Elimination</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Elimination</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Consolidated</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Other information</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Segment assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35,896,448</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,382,038</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,320,547</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>357,940</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>52,956,973</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,880,055</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>49,076,918</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Investments in associates</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>64,648</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>64,648</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>64,648</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unallocated corporate assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,141,683</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total consolidated assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,283,249</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Segment liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,752,981</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(27,576</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,312,045</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(55,731</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,148,333</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,427,484</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,720,849</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unallocated corporate liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(25,541,368</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total consolidated liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(29,262,217</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capital expenditures</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,320,024</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,378,377</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,348,783</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(61,672</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11,108,856</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11,108,856</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation and amortization</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,090,414</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(35,809</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,680,554</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(9,824</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,816,601</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,916</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,804,685</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of goodwill and other intangible assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(709,389</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(21,270</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(730,659</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(730,659</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other non-cash expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(210,646</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(113,904</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,308</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(328,858</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(328,858</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-109

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9.0pt; margin-top: 21pt; ">

<TR style="font-size: 1pt;">
    <TD width="25%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap><B>2004 (As restated*)</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Fixed</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Fixed</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total Before</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Wireline</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Wireless</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Cellular</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Other</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Elimination</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Elimination</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Consolidated</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Segment results</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    External operating revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,860,835</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>575,436</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,201,786</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>309,709</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,947,766</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,947,766</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Inter-segment operating revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,302</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(51,083</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>534,790</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>51,063</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>539,072</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(539,072</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,865,137</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>524,353</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,736,576</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>360,772</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,486,838</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(539,072</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,947,766</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Segment expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(12,207,726</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(789,599</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,757,243</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(320,698</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(20,075,266</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>715,380</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(19,359,886</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Segment result</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,657,411</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(265,246</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,979,333</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>40,074</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,411,572</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>176,308</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,587,880</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,270,136</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>317,941</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss on foreign exchange&nbsp;&#151; net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,220,760</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other income (expenses)&nbsp;&#151; net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>331,050</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Tax expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,178,526</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity in net income of associated companies</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,420</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income before minority interest</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,570,869</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unallocated minority interest</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,956,301</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,614,568</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Other information</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Segment assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>34,493,795</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,048,671</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,988,939</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>414,165</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>56,945,570</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,396,426</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>54,549,144</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Investments in associates</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>73,323</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,290</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82,613</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>82,613</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unallocated corporate assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,547,435</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total consolidated assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>56,179,192</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Segment liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,821,945</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(86,780</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,712,623</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(87,346</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,708,694</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>987,442</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,721,252</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unallocated corporate liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(29,391,472</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total consolidated liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(33,112,724</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capital expenditures</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,340,591</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,807,518</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,982,744</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(66,691</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11,197,544</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11,197,544</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation and amortization</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,568,196</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(229,983</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,651,028</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(18,740</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,467,947</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,590</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,453,357</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of goodwill and other intangible assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(851,060</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(21,270</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(872,330</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(872,330</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other non-cash expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(244,356</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(100,737</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,338</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(350,431</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(350,431</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>

<TR valign="top">
    <TD>*&nbsp;</TD>
    <TD align="left">
    The 2004 figures have been restated due to the adoption of
    PSAK&nbsp;24R (see Note&nbsp;4a).</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-110

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9.0pt; margin-top: 24pt; ">

<TR style="font-size: 1pt;">
    <TD width="27%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Fixed</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Fixed</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total Before</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Wireline</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Wireless</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Cellular</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Other</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Elimination</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Elimination</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Consolidated</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Segment results</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    External operating revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,637,386</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,449,725</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,384,856</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>335,217</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41,807,184</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41,807,184</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Inter-segment operating revenues</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>305,382</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(167,935</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>691,188</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>70,475</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>899,110</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(899,110</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total revenue</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,942,768</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,281,790</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,076,044</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>405,692</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>42,706,294</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(899,110</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41,807,184</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Segment expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(14,378,819</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,174,656</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(8,774,996</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(328,184</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(25,656,655</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,020,221</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(24,636,434</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Segment result</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,563,949</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(892,866</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,301,048</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>77,508</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,049,639</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>121,111</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,170,750</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,177,268</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>344,686</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss on foreign exchange&nbsp;&#151; net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(516,807</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other income (expenses)&nbsp;&#151; net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>409,184</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Tax expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,183,887</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity in net income of associated companies</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,879</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income before minority interest</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,057,537</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unallocated minority interest</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,063,971</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,993,566</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Other information</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Segment assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33,980,509</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,617,374</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,444,587</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>455,644</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>63,498,114</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,260,681</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>61,237,433</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Investments in associates</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>92,110</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,290</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>101,400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>101,400</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unallocated corporate assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>832,211</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total consolidated assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>62,171,044</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Segment liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,890,445</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(459,284</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,547,874</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(111,620</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6,009,223</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>886,435</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(5,122,788</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unallocated corporate liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(27,450,662</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total consolidated liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(32,573,450</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capital expenditures</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,037,866</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,388,876</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(10,085,755</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(40,460</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(13,552,957</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(13,552,957</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation and amortization</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,006,246</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(537,284</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,046,632</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(23,322</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,613,484</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,919</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,601,565</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Write-down of assets and loss on procurement commitments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(696,127</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(696,127</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(696,127</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-111

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="27%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="26" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Fixed</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Fixed</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total Before</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR style="font-size: 7.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Wireline</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Wireless</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Cellular</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Other</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Elimination</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Elimination</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Consolidated</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of goodwill and other intangible assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(896,883</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(21,270</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(918,153</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(918,153</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other non-cash expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(292,357</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(21,582</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(171,192</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,783</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(489,914</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(489,914</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>47.&nbsp;JOINT OPERATION SCHEMES (&#147;KSO&#148;)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 1995, the Company and five investors (PT Pramindo Ikat
Nusantara, PT AriaWest International, PT Mitra Global
Telekomunikasi Indonesia, PT Dayamitra Telekomunikasi and PT
Bukaka Singtel International) entered into agreements for Joint
Operation Schemes (&#147;KSO&#148;) and KSO construction
agreements for the provision of telecommunication facilities and
services for the Sixth Five-Year Development Plan
(&#147;Repelita VI&#148;) of the Republic of Indonesia. The five
investors undertook the development and operation of the basic
fixed telecommunications facilities and services in five of the
Company&#146;s seven regional divisions.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Following the Indonesian economics crisis that began in
mid-1997, certain KSO investors experienced difficulties in
fulfilling their commitment under the KSO agreements. As
remedial measures instituted by both the Company and those
certain KSO investors did not fully remedy this situation, the
Company entered into agreements with some of the KSO investors
to acquire those KSO investors (Dayamitra in 2001, Pramindo in
2002 and AWI in 2003&nbsp;&#151; Note&nbsp;5) and currently
controls the related KSOs through its ownership of such KSO
investors. In January 2004, the Company acquired full
operational control of the KSO IV operations (Note&nbsp;5).
Accordingly, the revenue sharing percentage in those KSOs is no
longer relevant as the financial statements of the acquired KSO
investors and the related KSOs are consolidated into the
Company&#146;s financial statements since the date of
acquisition. Subsequent to January 2004, only Regional Division
VII is operated by a KSO investor, PT Bukaka Singtel
International (&#147;BSI&#148;), which is not controlled by the
Company.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the Joint Operation Scheme between the Company and BSI,
the KSO Unit VII is required to make payments to the Company
consisting of the following:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    Minimum Telkom Revenue (&#147;MTR&#148;)</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Represents the amount guaranteed by the KSO investor to be paid
to the Company in accordance with the KSO agreement.
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    Distributable KSO Revenues (&#147;DKSOR&#148;)</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
DKSOR are the entire KSO revenues, less the MTR and the
operational expenses of the KSO Units, as provided in the KSO
agreement. These revenues are shared between the Company and BSI
based on agreed upon percentages.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The DKSOR from fixed wireless revenues (&#147;Telkom Flexi
Revenues&#148;) are shared between the Company and BSI based on
a ratio of 95% and 5%, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The DKSOR from non-Telkom Flexi Revenues are shared between the
Company and BSI based on a ratio of 35% and 65%, respectively.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-112

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At the end of the KSO period, all rights, title and interests of
BSI 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 the tests have not 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:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    i.&nbsp;the net present value, if any, of the KSO
    investor&#146;s projected share in DKSOR from the additional new
    installations forming part of the KSO system on the termination
    date over the balance of the applicable payback periods,&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    ii.&nbsp;an amount to be agreed upon between the Company and the
    KSO investor as a fair compensation in respect of any
    uncompleted or untested additional new installations transferred.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>48.&nbsp;REVENUE-SHARING ARRANGEMENTS</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has entered into separate agreements with several
investors under Revenue-Sharing Arrangements (&#147;RSA&#148;)
to develop fixed lines, public card-phone booths (including
their maintenance) and related supporting telecommunications
facilities.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, the Company has 90 RSA with 63
partners. The RSA are located mainly in Palembang, Pekanbaru,
Jakarta, East Java and Kalimantan with concession periods
ranging from 16 to 176&nbsp;months.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the RSA, the investors finance the costs incurred in
developing telecommunications facilities. Upon completion of the
construction, the Company manages and operates the facilities
and bears the cost of repairs and maintenance during the
revenue-sharing period. 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 at a nominal price.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Generally, the revenues earned from the customers in the form of
line installation charges are allocated in full to the
investors. The revenues from outgoing telephone pulses and
monthly subscription charges are shared between the investors
and the Company based on certain agreed ratio.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The net book value of property, plant and equipment under RSA
which have been transferred to property, plant and equipment
amounted to Rp53,589&nbsp;million and Rp55,441&nbsp;million in
2004 and 2005, respectively (Note&nbsp;13).
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The investors&#146; share of revenues amounted to
Rp442,633&nbsp;million, Rp891,165&nbsp;million and
Rp513,528&nbsp;million in 2003, 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>49.&nbsp;TELECOMMUNICATIONS SERVICES TARIFFS</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Law No.&nbsp;36&nbsp;year 1999 and Government
Regulation&nbsp;No.&nbsp;52&nbsp;year 2000, tariffs for the use
of telecommunications network and telecommunication services are
determined by providers based on the tariffs category, structure
and with respect to fixed line telecommunication services price
cap formula set by the Government.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-113

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Fixed Line Telephone Tariffs</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Fixed line telephone tariffs 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 classified as either local or domestic long-distance.
The tariffs depend on call distance, call duration, the time of
day, the day of the week and holidays.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Tariffs for fixed line telephone are regulated under Minister of
Communications Decree No.&nbsp;KM.12&nbsp;year 2002 dated
January&nbsp;29, 2002 concerning the addendum of the decree of
Minister of Tourism, Post and Telecommunication
(&#147;MTPT&#148;) No.&nbsp;79&nbsp;year 1995, concerning the
Method for Basic Tariff Adjustment on Domestic Fixed Line
Telecommunication Services. Furthermore, the Minister of
Communications issued Letter No.&nbsp;PK 304/1/3 PHB-2002 dated
January&nbsp;29, 2002 concerning increase in tariffs for fixed
line telecommunications services. According to the letter,
tariffs for fixed line domestic calls would increase by 45.49%
over three years. The average increase in 2002 was 15%. This
increase was effective on February&nbsp;1, 2002. The
implementation of the planned increase in the tariff in 2003,
however, was postponed by the Minister of Communications through
letter No.&nbsp;PR.304/1/1/ PHB-2003 dated January&nbsp;16, 2003.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Based on the Announcement No.&nbsp;PM.2&nbsp;year 2004 of the
Minister of Communications dated March&nbsp;30, 2004, the
Company adjusted the tariffs effective April&nbsp;1, 2004 as
follows:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    Local charges increased by an average of 28%</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    DLD charges decreased by an average of 10%</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    Monthly subscription charges increased by an average of 12% to
    25%, depending on customer segment.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Mobile Cellular Telephone Tariffs</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Tariffs for cellular providers are set on the basis of the MTPT
Decree No. KM. 27/ PR.301/ MPPT-98 dated February&nbsp;23, 1998.
Under the regulation, the cellular tariffs consist of activation
fees, monthly charges and usage charges.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The maximum tariff for the activation fee is Rp200,000&nbsp;per
new subscriber number. The maximum tariff for the monthly
charges is Rp65,000. Usage charges consist of the following:
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>a.&nbsp;<U>Air time</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The maximum basic airtime tariff charged to the originating
cellular subscriber is Rp325/minute. Charges to the originating
cellular subscriber are calculated as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="48%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="43%">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1.&nbsp;Cellular to cellular</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>:</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    2 times airtime rate</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2.&nbsp;Cellular to PSTN</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>:</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    1 time airtime rate</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    3.&nbsp;PSTN to cellular</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>:</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    1 time airtime rate</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    4.&nbsp;Card phone to cellular</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>:</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    1 time airtime rate plus 41% surcharge</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-114

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>b.&nbsp;<U>Usage tariffs</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.&nbsp;Usage tariffs charged to a cellular subscriber who makes
a call to a fixed line (&#147;PSTN&#148;) subscriber are the
same as the usage tariffs applied to PSTN subscribers. For the
use of local PSTN network, the tariffs are computed at 50% of
the prevailing local PSTN tariffs.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2.&nbsp;The long-distance usage tariffs between two different
service areas charged to a cellular subscriber are the same as
the prevailing tariffs for domestic long-distance call
(&#147;SLJJ&#148;) applied to PSTN subscribers.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Based on the Decree No.&nbsp;KM. 79&nbsp;year 1998 of the
Ministry of Communications, the maximum tariff for prepaid
customers may not exceed 140% of the peak time tariffs for
post-paid subscribers.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Based on the Announcement No.&nbsp;PM.2&nbsp;year 2004 of the
Minister of Communications dated March&nbsp;30, 2004, Telkomsel
adjusted its tariffs by eliminating the tariff subsidy from
long-distance calls. This resulted in a 9% tariff increase.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Interconnection Tariffs</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Government establishes the percentage of tariffs to be
received by each operator in respect of calls that transit
multiple networks. The Telecommunications Law and Government
Regulation&nbsp;No.&nbsp;52 of 2000 provides for the
implementation of a new policy to replace the current revenue
sharing policy. Under the new policy, which has not yet been
implemented, the operator of the network on which calls
terminate would determine the interconnection charge to be
received by it based on a formula to be mandated by the
Government, which would be intended to have the effect of
requiring that operators charge for calls based on the costs of
carrying such calls. On March&nbsp;11, 2004, the MoC issued
Decree No.&nbsp;32/2004, which stated that cost-based
interconnection fees shall be applicable beginning
January&nbsp;1, 2005. The effective date of this decree was
subsequently postponed until January&nbsp;1, 2007 based on the
Ministry Regulation&nbsp;No. 08/ Per/ M. KOMINF/02/2006 dated
February&nbsp;8, 2006.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>i.&nbsp;<U>Interconnection with Fixed line Network</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Government&#146;s National Fundamental Technical Plan set
forth in Decree 4 of 2001, as amended by Decree 28 of 2004, sets
out the technical requirements, routing plans and numbering
plans for interconnection of the networks of various
telecommunications operators among themselves and with the
Company&#146;s fixed line network. Under the National
Fundamental Technical Plan, all operators are permitted to
interconnect with the Company&#146;s fixed line network for
access thereto and to other networks, such as international
gateways and the networks of other cellular operators. In
addition, cellular operators may interconnect directly with
other networks without connecting to the Company&#146;s fixed
line network. Currently, the fees for interconnection are set
forth in Decree No.&nbsp;506/1997, Decree No.&nbsp;46/1998,
Decree No.&nbsp;37/1999 and Decree No.&nbsp;30/2000.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Fixed line Interconnection with Indosat.</I> Currently, the
fixed line interconnection between the Company and Indosat is
generally based on their agreement signed in 2005. Pursuant to
the agreement between the Company and Indosat, for
interconnection of local and domestic long-distance calls, the
operator of the network on which the calls terminate receives an
agreed amount per minute.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Other Fixed Wireline Interconnection.</I> Since
September&nbsp;1, 1998, the Company has been receiving a share
of the tariffs from Batam Bintan Telekomunikasi
(&#147;BBT&#148;), which is a local operator with a special
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-115

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
coverage area on Batam Island, for each successful call that
transits or terminates on the Company&#146;s fixed line network.
Under the interconnection agreement, for local interconnection
calls, revenues are shared on a &#147;sender keeps all&#148;
basis. For local calls originating on BBT&#146;s network
terminating on a cellular network and vice versa which transit
through the Company&#146;s fixed line network, the Company
receives an agreed percentage of the prevailing tariff for local
calls. For interconnection of domestic long-distance calls, the
operator of the network on which the calls terminate or transit
receives an agreed percentage of the prevailing long-distance
tariff. In addition, BBT is to receive a certain fixed amount
for each minute of incoming and outgoing international calls
from and to BBT that transit through the Company&#146;s fixed
line network and use the Company&#146;s IDD service and 50% of
the prevailing interconnection tariff for incoming and outgoing
international calls that transit through the Company&#146;s
fixed line network and use Indosat&#146;s IDD service.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Other Fixed Wireless Interconnection.</I> Fixed wireless
networks may interconnect with the Company&#146;s fixed line
network at the Company&#146;s gateway. At present, other than
the Company and Indosat, PT Bakrie Telecom (&#147;BT&#148;) also
operates a fixed wireless network in Indonesia. The fixed
wireless interconnection between the Company and BT is currently
based on the most recent interconnection agreement signed in
2005. Pursuant to the agreement, for interconnection of local
calls, the operator of the network on which the calls terminate
receives an agreed amount per minute. For local calls
originating on BT&#146;s network terminating on a cellular
network and vice versa which transit through the Company&#146;s
fixed line network, the Company receives an agreed percentage of
the prevailing tariff for local calls. For domestic
long-distance calls that originate on the Company&#146;s fixed
line network and terminate on BT&#146;s network, BT receives an
agreed amount per minute. In the reverse situation and for
transit long-distance calls through the Company&#146;s fixed
line network, the Company receives an agreed percentage of the
prevailing long-distance tariff. In addition, BT is to receive a
certain fixed amount for each minute of incoming and outgoing
international calls to and from BT that transit through the
Company&#146;s fixed line network and use the Company&#146;s IDD
service and 25% of prevailing interconnection tariff of incoming
and outgoing international calls that transit through the
Company&#146;s fixed line network and use Indosat&#146;s IDD
service.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>ii.&nbsp;<U>Cellular Interconnection</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In respect of local interconnection calls, including transit
calls, between a cellular network and the Company&#146;s fixed
line network, the Company receives 50% of the prevailing
fixed-line usage tariff for local pulse. For local calls from
the Company&#146;s fixed line network to a cellular network, the
Company charges its subscribers the applicable local call tariff
plus an airtime charge, and pays the cellular operator the
airtime charge. For local calls between cellular
telecommunications networks, the originating cellular operator
pays the terminating cellular operator the air time charges.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The current Interconnection Decree, effective April&nbsp;1,
1998, assumes that it is possible for long-distance calls to be
carried by more than one network. Pursuant to the
Interconnection Decree, for long-distance calls which originate
on the Company&#146;s fixed line network, the Company is
entitled to retain a portion of the prevailing long-distance
tariff, which ranges from 40% of the tariff in cases where the
entire long-distance portion is carried by a cellular operator
up to 85% of the tariff in cases where the entire long-distance
portion is carried by the Company&#146;s fixed line network. For
long-distance calls that originate from a cellular subscriber,
the Company is entitled to retain a portion of the prevailing
long-distance tariff, which ranges from 25% of the tariff in
cases where the call originates from a cellular subscriber,
transits the Company&#146;s fixed line network and terminates on
another cellular subscriber
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-116

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
with the entire long-distance portion carried by a cellular
operator, up to 85% of the tariff in cases where the entire
long-distance portion is carried by the Company&#146;s fixed
line network and terminates on the Company&#146;s fixed line
network.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>iii.&nbsp;<U>International Interconnection</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Interconnection on the Company&#146;s domestic fixed line
network for international calls consists of access charges and
usage charges. The following table sets forth the current
international interconnection tariff, effective as of
December&nbsp;1, 1998, for IDD calls which are routed through
Indosat&#146;s international gateways and which originate,
transit or terminate on the Company&#146;s domestic fixed line
network and Telkomsel&#146;s cellular network, pursuant to
Ministerial Decree No.&nbsp;37 of 1999:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="59%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="38%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Description</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Tariff</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Access Charge</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Rp850/successful call</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Usage Charge</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">
    Rp550/successful paid minute</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, since June 2004, the Company has provided IDD
services. Currently, the Company&#146;s IDD service can be
accessed by subscribers of all telecommunication operators in
Indonesia. Interconnection and access charges for originating
calls using the Company&#146;s IDD service or terminating
incoming international calls routed through the Company&#146;s
international voice telecommunications gateway are negotiated
with each respective domestic operator.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>iv.&nbsp;<U>Satellite Phone Interconnection</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Since the fourth quarter of 2001, the Company has been receiving
a share of revenues arising from interconnection transactions
with PSN, a national satellite operator. Under the agreement, in
respect of the interconnection calls between the Company and
PSN, the Company receives Rp800&nbsp;per minute for network
charges and an additional Rp300&nbsp;per minute origination fee
if the call originates from the Company&#146;s fixed line
network.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>v.&nbsp;<U>VoIP Interconnection</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Previously, MoC Decree No.&nbsp;23 of 2002 provided that access
charges and network lease charges for the provision of VoIP
services were to be agreed between network operators and VoIP
operators. On March&nbsp;11, 2004, the MoC issued Decree
No.&nbsp;31/2004, which stated that interconnection charges for
VoIP are to be fixed by the MoC. Currently, the MoC has not yet
determined what the new VoIP interconnection charges will be.
Until such time as the new charges are fixed, the Company will
continue to receive connection fees for calls that originate or
terminate on the Company&#146;s fixed line network at agreed
fixed amount per minute.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Public Phone Kiosk (&#147;Wartel&#148;) Tariff</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On August&nbsp;7, 2002, the Minister of Communications issued
Decree No.&nbsp;KM. 46&nbsp;year 2002 regarding the operation of
phone kiosks. The decree provides that the Company is entitled
to retain a maximum of 70% of the phone kiosk basic tariffs for
domestic calls and up to 92% of phone kiosk basic tariffs for
international calls. It also provides that the airtime from the
cellular operators shall generate at a minimum 10% of the kiosk
phones&#146; revenue.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-117

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Tariff for Other Services</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The tariffs for satellite rental, and other telephony and
multimedia services are determined by the service provider by
taking into account the expenditures and market price. The
Government only determines the tariff formula for basic
telephony services. There is no stipulation for the tariff of
other services.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Universal Service Obligation (&#147;USO&#148;)</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On September&nbsp;30, 2005, the MoCI issued Regulation
No.&nbsp;15/ PER/ M.KOMINFO/9/2005, which sets forth the basic
policies underlying the USO program and requires
telecommunications operators in Indonesia to contribute 0.75% of
gross revenues (with due consideration for bad debt and
interconnection charges) for USO development.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>50.&nbsp;&nbsp;COMMITMENTS</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>a.&nbsp;<U>Capital Expenditures</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, the amount of capital expenditures
committed under contractual arrangements, principally relating
to procurement and installation of switching equipment,
transmission equipment and cable network, are as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="64%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amounts in</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Foreign Currencies</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Equivalent</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Currencies</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(in millions)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>in Rupiah</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rupiah</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,601,352</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>265</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,602,313</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Euro</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>119</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,386,487</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Japanese Yen</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>52</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,355</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,594,507</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The above balance includes the following significant agreements:
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>(i)&nbsp;<U>Procurement Agreements</U></I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    In August 2004, Telkomsel entered into the following agreements
    with Motorola Inc. and PT&nbsp;Motorola Indonesia, Ericsson AB
    and PT Ericsson Indonesia, Nokia Corporation and PT Nokia
    Network, and Siemens AG, for the maintenance and procurement of
    equipment and related services:</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="5%"></TD>
    <TD width="3%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    Joint Planning and Process Agreement</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    Equipment Supply Agreement (&#147;ESA&#148;)</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    Technical Service Agreement (&#147;TSA&#148;)</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;</TD>
    <TD align="left">
    Site Acquisition and Civil, Mechanical and Engineering Agreement
    (&#147;SITAC&#148; and &#147;CME&#148;)</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-118

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    The agreements contain lists of charges (&#147;Price List&#148;)
    to be used in determining the fees payable by Telkomsel for all
    equipment and related services to be procured during the
    roll-out period upon the issuance of Purchase Order
    (&#147;PO&#148;).</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    The agreements are valid and effective as of the execution date
    (&#147;Effective Date&#148;) by the respective parties for a
    period of three years, provided that the suppliers are able to
    meet requirements set out in each PO. In the event that the
    suppliers fail to meet those requirements, Telkomsel may
    terminate the agreements at its sole discretion with a prior
    written notice.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    In accordance with the agreements, the parties also agreed that
    the charges specified in the Price List will also apply to
    equipment and technical services (ESA and TSA) and services
    (SITAC and CME) acquired from the suppliers between May&nbsp;26,
    2004 and the Effective Date (&#147;Pre-Effective Date
    Pricing&#148;), except for those acquired from Siemens under TSA
    which are applicable for certain equipment and the related
    maintenance services acquired or rendered between July&nbsp;1,
    2004 and the Effective Date. Prices as well as discounts thereon
    are subject to a quarterly review.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>(ii)&nbsp;<U>CDMA Procurement Agreement with Samsung
    Consortium</U></I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    On October&nbsp;9, 2002, the Company signed an Initial Purchase
    Order Contract for CDMA 2000-IX with Samsung Consortium for Base
    Station Subsystem (&#147;BSS&#148;) procurement in Regional
    Divisions&nbsp;V, VI and VII and on December&nbsp;23, 2002, the
    Company signed a Master Procurement Partnership Agreement
    (&#147;MPPA&#148;), which is related to the construction of
    Network and Switching Subsystem (&#147;NSS&#148;) for nationwide
    and BSS for Regional Divisions IV,&nbsp;V, VI, and VII. As of
    December&nbsp;31, 2005, the Company&#146;s remaining purchase
    commitment in connection with this MPPA amounted to
    US$5.6&nbsp;million and Rp1,826&nbsp;million.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Samsung Consortium will service and maintain the CDMA 2000 IX
    system that it constructs, pursuant to a Service
    Level&nbsp;Agreement dated the same date as the MPPA in return
    for an annual consideration of US$11.6&nbsp;million.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>(iii)&nbsp;<U>CDMA Procurement Agreement with Ericsson CDMA
    Consortium</U></I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    The Company and Ericsson CDMA Consortium entered into a Master
    Procurement Partnership Agreement (&#147;MPPA&#148;) on
    December&nbsp;23, 2002. The MPPA is related to the construction
    of BSS for Regional Division&nbsp;II. As of December&nbsp;31,
    2005, the Company&#146;s remaining purchase commitment in
    connection with this MPPA amounted to US$6.8&nbsp;million and
    Rp12,753&nbsp;million.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Ericsson Consortium will service and maintain the CDMA 2000 IX
    system that it constructs, pursuant to a Service
    Level&nbsp;Agreement dated the same date as the MPPA in return
    for an annual consideration of US$5.3&nbsp;million.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>(iv)&nbsp;<U>MPPA with PT INTI</U></I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    The Company and PT INTI signed an MPPA on August&nbsp;26, 2003
    whereby PT INTI is appointed to construct a CDMA fixed wireless
    access network and integrate such network with the
    Company&#146;s existing network and all ancillary services
    relating thereto in West Java and Banten. As of
    December&nbsp;31, 2005, the Company&#146;s remaining purchase
    commitment in connection with this MPPA amounted to US$355,275
    and Rp233&nbsp;million.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-119

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    PT INTI will service and maintain the CDMA 2000 IX system that
    it constructs, pursuant to a Service Level&nbsp;Agreement dated
    the same date as the MPPA in return for an annual consideration
    of US$2.3&nbsp;million.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>(v)&nbsp;<U>MPPA with Motorola</U></I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    On March&nbsp;24, 2003, the Company signed an MPPA with
    Motorola, Inc. Under the MPPA, Motorola is obliged to construct
    a CDMA fixed wireless access network and integrate such network
    with the Company&#146;s existing network and all ancillary
    services relating thereto in Regional Division I. As of
    December&nbsp;31, 2005, the Company&#146;s remaining purchase
    commitment in connection with this MPPA amounted to US$422,424
    and Rp1,307&nbsp;million.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Motorola, Inc. will service and maintain the CDMA 2000 IX system
    that it constructs, pursuant to a Service Level&nbsp;Agreement
    dated the same date as the MPPA in return for an annual
    consideration of US$3&nbsp;million.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="11%"></TD>
    <TD width="89%"></TD>
</TR>

<TR valign="top">
    <TD><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;</I></TD>
    <TD>
    <I><U>Metro Junction and Optical Network Access Agreement for
    Regional Division&nbsp;III with PT INTI</U></I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    On November&nbsp;12, 2003, the Company entered into an agreement
    with PT INTI for the construction and procurement of an optical
    network, as well as a network management system and other
    related services and equipment, with respect to Regional
    Division&nbsp;III (West Java). Under this agreement and its
    amendment, the Company is obliged to pay PT INTI total
    consideration of approximately US$6.6&nbsp;million and
    Rp111,655&nbsp;million. As of December&nbsp;31, 2005, the
    Company has paid and/or accrued a total of US$2.9&nbsp;million
    plus Rp59,018&nbsp;million.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="11%"></TD>
    <TD width="89%"></TD>
</TR>

<TR valign="top">
    <TD><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)&nbsp;</I></TD>
    <TD>
    <I><U>Ring JASUKA Backbone with NEC-Siemens Consortium</U></I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    On June&nbsp;10, 2005, the Company entered into an agreement
    with NEC-Siemens Consortium for the procurement and installation
    of an optical cable transmission of RING I (link
    Jakarta&nbsp;&#151; Tanjung Pandan&nbsp;&#151;
    Pontianak&nbsp;&#151; Batam&nbsp;&#151; Dumai&nbsp;&#151;
    Pekanbaru&nbsp;&#151; Palembang&nbsp;&#151; Jakarta) and
    RING&nbsp;II (link Medan&nbsp;&#151; Padang&nbsp;&#151;
    Pekanbaru&nbsp;&#151; Medan). Under this agreement, the Company
    is obliged to pay NEC-Siemens Consortium total consideration of
    approximately US$46.9&nbsp;million and Rp169,642&nbsp;million.
    This agreement is based on a turnkey arrangement. As of
    December&nbsp;31, 2005, no payment has been made by the Company.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.&nbsp;</I></TD>
    <TD>
    <I><U>Agreements on Derivative Transactions</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telkomsel is exposed to market risks, primarily changes in
foreign exchange rates, and uses derivative instruments in
hedging such risk. None of the derivative transactions entered
into by Telkomsel during 2003, 2004 and 2005 met the PSAK 55
criteria for hedge accounting. Therefore, changes in the fair
value of the derivative financial instruments were recognized in
the consolidated statements of income.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Telkomsel purchases equipment from several overseas suppliers
and, as a result, is exposed to fluctuations in foreign currency
exchange rates. In 2004 and 2005, Telkomsel entered into forward
foreign exchange contracts with Deutsche Bank, Standard
Chartered Bank, The Hongkong and Shanghai Banking Corporation
and Citibank Jakarta to mitigate the foreign exchange risks
relating to its purchases. The primary purpose of
Telkomsel&#146;s foreign currency hedging activities is to
protect
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-120

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
against the volatility associated with foreign currency
purchases of equipment and other assets in the normal course of
business.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table presents the aggregate notional amounts of
Telkomsel&#146;s foreign exchange forwards entered into in 2004
and 2005:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="64%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(in millions)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(in millions)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Citibank&nbsp;&#151; U.S.&nbsp;Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    The Hongkong and Shanghai Banking Corporation&nbsp;&#151; Euro</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deutsche Bank&nbsp;&#151; U.S.&nbsp;Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Standard Chartered Bank&nbsp;&#151; Euro</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2004, all of the forward contracts with
Standard Chartered Bank and Citibank had been closed and the
outstanding contract with Deutsche Bank amounted to
US$5&nbsp;million.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A receivable to reflect the gain on the difference between the
contract rate and the rate prevailing as of December&nbsp;31,
2004 amounting to Rp1,020&nbsp;million was included in
&#147;Other Receivables&#148; in the consolidated balance sheet.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of December&nbsp;31, 2005, all of the forward contracts had
been closed.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.&nbsp;</I></TD>
    <TD>
    <I><U>Borrowings and other credit facilities</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;Telkomsel has a combined US$20&nbsp;million facility
with Standard Chartered Bank, Jakarta for import L/ C, bank
guarantee, standby L/ C and foreign exchange. The facility
expires in December 2006. Borrowings under the facility bear
interest at SIBOR plus 2%&nbsp;per annum for drawing in
US&nbsp;Dollar, at a rate equal to the three-month Certificate
of Bank Indonesia plus 2%&nbsp;per annum for drawing in Rupiah,
and at the Bank&#146;s cost of fund plus 2% for drawing in other
currencies. Under the facility, Telkomsel has an outstanding
bank guarantee of Rp150&nbsp;billion (US$15.3&nbsp;million) as
of December&nbsp;31, 2005. There were no outstanding borrowings
related to the facility as of December&nbsp;31, 2004 and 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(ii)&nbsp;Telkomsel has a US$40&nbsp;million facility with
Citibank N.A., Jakarta for L/ C and Trust&nbsp;Receipt Loan,
which expires on July&nbsp;31, 2006. Borrowings under this
facility bear interest at the Bank&#146;s cost of fund plus
2%&nbsp;per annum. There were no outstanding borrowings under
this facility as of December&nbsp;31, 2004 and 2005.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(iii)&nbsp;Telkomsel has not collateralized any of its assets
for its bank borrowings or other credit facilities. The terms of
the various agreements between Telkomsel and its lenders and
financiers require compliance with a number of pledges and
negative pledges as well as financial and other covenants, inter
alia, certain restriction on the amount of dividends and other
profit distributions which could adversely affect
Telkomsel&#146;s capacity to comply with the terms of the
agreements. The terms of the relevant agreement also contain
default and cross default clauses. Management is not aware of
any breaches of the terms of these agreements and does not
foresee any such breaches occurring in the future.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(iv)&nbsp;In October 2005, Graha Sarana Duta entered into a
credit agreement with the Bank Niaga, Bandung to obtain a
Rp12&nbsp;billion short-term facility, which expires on 18
October 2006. Borrowings
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-121

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
under this facility bear interest at 14.5%&nbsp;per annum. There
were no outstanding borrowings related to this facility as of
December&nbsp;31, 2005.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.&nbsp;</I></TD>
    <TD>
    <I><U>Operating Leases</U></I></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company leases land, buildings, and various equipment under
non-cancelable operating leases having initial terms of more
than one year. At December&nbsp;31, 2005, the future minimum
payments for the non-cancelable operating leases were as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="85%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Year</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rp</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2006</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>474,790</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2007</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>493,585</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2008</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>452,820</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2009</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>274,307</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2010</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>269,013</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Thereafter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>851,425</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,815,940</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Rental expense for operating leases was Rp462,995&nbsp;million,
Rp759,288&nbsp;million and Rp868,987&nbsp;million for the years
ended December&nbsp;31, 2003, 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>51.&nbsp;CONTINGENCIES</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
a.&nbsp;In the ordinary course of business, the Company has been
named as a defendant in various legal actions. Based on
Management&#146;s estimate of the outcome of these matters, the
Company accrued Rp99&nbsp;million and Rp33,116&nbsp;million as
of December&nbsp;31, 2004 and 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
b.&nbsp;On August&nbsp;13, 2004, the Commissions for Business
Competition Watch (Komisi Pengawas Persaingan Usaha,
&#147;KPPU&#148;) issued its verdict in Commission Court, which
determined that the Company had breached several articles of Law
No.&nbsp;5/1999 on Anti Monopolistic Practices and Unfair
Business Competition (&#147;Competition Law&#148;). In addition,
KPPU also indicated that the Company should allow Warung Telkom
(&#147;kiosks&#148;) to channel international calls to other
international call operators, and abolish the clause in
agreements between the Company and Warung Telkom providers which
limit Warung Telkom to sell telecommunication services of other
operators. The Company filed an appeal to the Bandung District
Court which on December&nbsp;7, 2004, issued its verdicts in
favor of the Company. On January&nbsp;4, 2005, KPPU filed an
appeal to the Indonesian Supreme Court. As of the date of
issuance of these consolidated financial statements, the
Indonesian Supreme Court has not issued its verdicts. The
Company does not believe that these proceedings presently
pending will have a material adverse effect on the
Company&#146;s consolidated financial position, results of
operations or liquidity.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-122
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
c.&nbsp;There are on-going investigations by the West Java
Police Department as to the conduct of the Company&#146;s
Director of Human Resources Development, the Company&#146;s
Director of Consumer, and several other employees of the Company
(including one former director of the Company and one former
President Director of Napsindo&nbsp;&#151; the Company&#146;s
subsidiary). As the details of the investigations have not been
made public, the Company does not know the full nature or extent
of the investigations or the matters to which they relate, or
whether any charges are likely to be filed. Based on press
reports, the Company understands that the investigations relate
principally to an alleged violation of anti-corruption law
regarding (i)&nbsp;the retention by the Company of a consultant
and an alleged overpayment without compliance with proper
procedures; and (ii)&nbsp;the alleged provision of
interconnection services to Napsindo, the Company&#146;s
subsidiary, and Globalcom, a Malaysian company, at an incorrect
tariff, and alleged use by Napsindo/Globalcom of the
Company&#146;s network for the provision of illegal VoIP
services. It is also understood that one of the investigations
relates to the Company&#146;s guarantee of a bank loan obtained
by Napsindo. To the Company&#146;s knowledge, no charges have
been filed against any of the persons investigated by the West
Java Police Department, although several of them (but not the
Company&#146;s Director of Consumer) were held in custody in
West Java pending completion of the investigations. On
May&nbsp;10, 2006, those individuals were released from the
police custody because the police were unable to find any
incriminating evidence to support the charges during the
<FONT style="white-space: nowrap">120-day</FONT> period they
were held in police custody. 120&nbsp;days is the maximum period
allowed for police custody of suspects for investigation
purpose. However the investigation is ongoing. There can be no
assurance that the police will not find evidence of wrong-doing,
charges will not be filed in relation to the foregoing, or that
such persons or other employees of the Company will not be found
guilty of any offence. Although the Company believes that the
investigations are without merits, to the extent any of such
persons are in custody, or are found guilty of any offence, the
Company is and would be deprived of their services. In addition,
the Company does not believe that there are any financial
ramifications as a result of the investigations.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-123

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>52.&nbsp;ASSETS AND LIABILITIES DENOMINATED IN FOREIGN
CURRENCIES</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The balances of monetary assets and liabilities denominated in
foreign currencies are as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="37%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Foreign</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Foreign</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Currencies</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rupiah</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Currencies</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rupiah</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(in millions)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Equivalent</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(in millions)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Equivalent</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Assets</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash and cash equivalents</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>74.80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>694,116</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>81.96</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>805,489</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Euro</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>88.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,114,704</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>59.14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>689,472</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Japanese Yen</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.98</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>89</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Trade accounts receivable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Related parties</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.92</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>36,375</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.64</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,112</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third parties</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16.19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>150,223</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>191,199</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other accounts receivable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1.12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,355</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,910</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Euro</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>88</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other current assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.61</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>42,792</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13.63</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>133,926</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Euro</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>157</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Advances and other non-current assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>64,056</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,162</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Escrow accounts</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3.24</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>30,059</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12.89</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>126,128</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total Assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,142,926</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,987,486</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Liabilities</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Trade accounts payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Related parties</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19.13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>177,892</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.09</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>148,423</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Myanmar KYAT</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Singapore Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third parties</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>49.57</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>460,969</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>125.40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,233,050</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Euro</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>68.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>796,343</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Japanese Yen</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.88</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>715</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>66.03</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,508</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Singapore Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.03</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>146</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>33</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Great Britain Pound Sterling</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.06</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,092</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-124

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="37%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Foreign</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Foreign</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Currencies</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rupiah</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Currencies</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Rupiah</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(in millions)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Equivalent</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(in millions)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Equivalent</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Euro</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26.54</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>336,572</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.79</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>102,509</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24.08</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>223,931</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>206,639</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Japanese Yen</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20.41</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,852</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>52.85</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,433</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Singapore Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.37</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,135</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.42</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,497</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Australian Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.07</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>507</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dutch Guilder</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.48</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,795</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Short-term bank loans</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Third parties</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>118.46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,101,633</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Advances from customers and suppliers</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.42</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,947</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>0.15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,474</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current maturities of long-term liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>116.29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,081,478</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>150.43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,479,401</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Euro</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.64</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>185,643</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14.67</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>171,087</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Japanese Yen</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,142.91</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>103,688</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,142.91</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>95,876</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;Dollar</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>830.22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,721,068</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>662.39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,514,501</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Japanese Yen</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,527.59</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,408,708</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,384.68</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,206,700</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Euro</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>36.60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>464,108</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22.01</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>256,631</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,277,900</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(12,225,119</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11,134,974</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(10,237,633</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>53.&nbsp;SUBSEQUENT EVENT</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Sale
of investment in PT Mandara Selular Indonesia
(&#147;Mobisel&#148;)</U></I>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On January&nbsp;11, 2006, the Company signed a Shares Sale and
Purchase Agreement with Twinwood Ventures Limited whereby the
Company agreed to sell its entire ownership interest in Mobisel
to Twinwood Ventures Limited for Rp22,561&nbsp;million. The
closing date of the transaction was on January&nbsp;13, 2006
when approval from Indonesian Investment Coordinating Board
(&#147;BKPM&#148;) was obtained. The resulting gain on this sale
was not significant.
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-125

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>54.&nbsp;</B></TD>
    <TD>
    <B>SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN ACCOUNTING
    PRINCIPLES GENERALLY ACCEPTED IN INDONESIA AND ACCOUNTING
    PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in
Indonesia (&#147;Indonesian GAAP&#148;), which differ in certain
significant respects from accounting principles generally
accepted in the United States of America
(&#147;U.S.&nbsp;GAAP&#148;). A description of the differences
and their effects on net income and stockholders&#146; equity
are set forth below.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As discussed in Note&nbsp;4, the Company&#146;s consolidated
financial statements prepared in accordance with Indonesian GAAP
as of and for the year ended December&nbsp;31, 2004 have been
restated in connection with the adoption of PSAK&nbsp;24R. While
the restatement affected previously reported consolidated net
income and stockholders&#146; equity under Indonesian GAAP,
there was no net effect on consolidated net income and
stockholders&#146; equity under U.S.&nbsp;GAAP as previously
reported. However, certain reconciling line items in arriving at
net income and stockholders&#146; equity under U.S.&nbsp;GAAP
have been revised.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)</B>&nbsp;</TD>
    <TD>
    Description of differences between Indonesian GAAP and
    U.S.&nbsp;GAAP</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>a.&nbsp;<U>Termination Benefits</U></I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Under Indonesian GAAP, termination benefits are recognized as
    liabilities when certain criteria are met (e.g. the enterprise
    is demonstratively committed to provide termination benefits as
    a result of an offer made in order to encourage early
    retirement).</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Under U.S.&nbsp;GAAP, termination benefits are recognized as
    liabilities when the employees accept the offer and the amount
    can be reasonably estimated.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>b.&nbsp;<U>Foreign Exchange Differences Capitalized to
    Property Under Construction</U></I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Under Indonesian GAAP, foreign exchange gains and losses
    resulting from borrowings used to finance property under
    construction are capitalized. Capitalization of foreign exchange
    gains and losses ceases when the construction of the qualifying
    asset is substantially completed and the constructed property is
    ready for its intended use.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Under U.S.&nbsp;GAAP, foreign exchange gains and losses are
    charged to current operations.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>c.&nbsp;<U>Interest Capitalized on Property under
    Construction</U></I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Under Indonesian GAAP, qualifying assets, to which interest cost
    can be capitalized, should be those that take a substantial
    period of time to get ready for its intended use or sale, i.e.
    minimum 12&nbsp;months. To the extent that funds are borrowed
    specifically for the purpose of obtaining a qualifying asset,
    the amount of interest cost eligible for capitalization on that
    asset should be determined based on the actual interest cost
    incurred on that borrowing during the period of construction
    less any investment income on the temporary investment of those
    borrowings.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-126

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Under U.S.&nbsp;GAAP, there is no minimum limit (i.e.
    <FONT style="white-space: nowrap">12-month</FONT> requirement)
    on the length of the construction period in which the interest
    cost could be capitalized. Interest income arising from any
    unused borrowings is recognized directly to current operations.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>d.&nbsp;<U>Revenue-Sharing Arrangements</U></I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    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 arrangements
    in the accounting records of the party to whom ownership in such
    properties will 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 net of amounts due to the investors.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Under U.S.&nbsp;GAAP, the revenue-sharing arrangements are
    recorded in a manner similar to capital leases where the fixed
    assets and obligation under revenue-sharing arrangements are
    reflected on the balance sheet. All the revenues generated from
    the revenue-sharing arrangements are recorded as a component of
    operating revenues, while a portion of the investors&#146; share
    of revenue from the revenue-sharing arrangements is recorded as
    interest expense and the balance is treated as a reduction of
    the obligation under revenue-sharing arrangements.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>e.&nbsp;<U>Employee benefit plans</U></I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    As of January&nbsp;1, 2005, the Company adopted PSAK&nbsp;24R in
    accounting for pension benefit cost,
    <FONT style="white-space: nowrap">post-retirement</FONT> health
    care benefit cost and long service award benefit cost for
    Indonesian GAAP purposes. PSAK&nbsp;24R requires the adoption of
    its provisions retrospectively as of January&nbsp;1, 2004
    (Note&nbsp;4a). Prior to 2004, there were no differences between
    Indonesian GAAP and U.S. GAAP with respect to the accounting for
    <FONT style="white-space: nowrap">post-retirement</FONT> health
    care benefit cost and long service award benefit cost while for
    pension benefit cost, there were some differences as follows:</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="4%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>i.</TD>
    <TD align="left">
    Under Indonesian GAAP, the prior service cost attributable to
    the increases in pension benefits for pensioners were directly
    charged to expense in those years. Under U.S. GAAP, because the
    majority of plan participants are still active, such prior
    service cost is deferred and amortized systematically over the
    estimated remaining service period for active employees.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>ii.</TD>
    <TD align="left">
    Under Indonesian GAAP, the Company amortized the cumulative
    unrecognized actuarial gain or loss over four&nbsp;years. Under
    U.S. GAAP, any cumulative unrecognized actuarial gain or loss
    exceeding 10&nbsp;percent of the greater of the projected
    benefit obligation or the fair value of plan assets is
    recognized in the statement of income on a straight-line basis
    over the expected average remaining service period.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>iii.</TD>
    <TD align="left">
    Under Indonesian GAAP, recognition of a minimum liability is not
    required. Under U.S. GAAP, the Company would be required to
    recognize an additional minimum liability when the accumulated
    benefit obligation exceeds the fair value of the plan assets,
    and an equal amount would be recognized as an intangible asset,
    provided that the asset recognized does not exceed the amount of
    unrecognized prior service&nbsp;cost.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-127

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Starting in 2004, the differences between the Company&#146;s
    accounting for pension benefit cost, post-retirement health care
    benefit cost and long service award benefit cost under
    Indonesian GAAP and U.S. GAAP are as follows:</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="4%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>i.</TD>
    <TD align="left">
    Under Indonesian GAAP, the prior service cost is recognized
    immediately if vested or amortized over the vesting period.
    Under U.S. GAAP, prior service cost (vested and
    <FONT style="white-space: nowrap">non-vested</FONT> benefits) is
    generally deferred and amortized systematically over the
    estimated remaining service period for active employees.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>ii.</TD>
    <TD align="left">
    Different dates of implementation caused significant differences
    in cumulative unrecognized actuarial gains and losses. However,
    the cumulative unrecognized actuarial gains and losses under
    Indonesian GAAP is now recognized in a manner similar to U.S.
    GAAP.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>iii.</TD>
    <TD align="left">
    Under Indonesian GAAP, the transition obligation was recognized
    on January&nbsp;1, 2004, the date PSAK&nbsp;24R was adopted.
    Under U.S. GAAP, the transition obligation is deferred and
    amortized systematically over the estimated remaining service
    period for active employees.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>iv.</TD>
    <TD align="left">
    The difference between Indonesian GAAP and U.S. GAAP in
    connection with the recognition of minimum liability remains
    unchanged.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>f.&nbsp;<U>Equity in Net Income or Loss of Associated
    Companies</U></I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    The Company records its equity in net income or loss of
    associated companies based on the associates&#146; financial
    statements that have been prepared under Indonesian GAAP.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    For U.S.&nbsp;GAAP reporting purposes, the Company recognizes
    the effect of the differences between U.S.&nbsp;GAAP and
    Indonesian GAAP at the investee level in the investment accounts
    and its share of the net income or loss and other comprehensive
    income or loss of those associates.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>g.&nbsp;<U>Land Rights</U></I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    In Indonesia, the title of land rests with the State under the
    Basic Agrarian Law No.&nbsp;5 of 1960. Land use is accomplished
    through land rights whereby the holder of the right enjoys the
    full use of the land for a stated period of time, subject to
    extensions. The land rights generally are freely tradeable and
    may be pledged as security under borrowing agreements. Under
    Indonesian GAAP, land ownership is not depreciated unless it can
    be foreseen that the possibility for the holder to obtain an
    extension or renewal of the rights is remote.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Under U.S.&nbsp;GAAP, the cost of land rights is amortized over
    the economic useful life which represents the contractual period
    of the land rights.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>h.&nbsp;<U>Revenue Recognition</U></I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Under Indonesian GAAP, revenues from cellular and fixed wireless
    services connection fees are recognized as income when the
    connection takes place (for postpaid service) or at the time of
    delivery of starter packs to distributors, dealers or customers
    (for prepaid service).</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Installation fees for wire line services are recognized at the
    time of installation. The revenue from calling cards
    (&#147;Kartu Telepon&#148;) is recognized when the Company sells
    the card.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-128

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Under U.S.&nbsp;GAAP, revenue from front-end fees and
    incremental costs up to, but not exceeding such fees, are
    deferred and recognized over the expected term of the customer
    relationship. Revenues from calling cards are recognized upon
    usage or expiration.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>i.&nbsp;<U>Goodwill</U></I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Under Indonesian GAAP, goodwill is amortized over a period, not
    exceeding 20&nbsp;years, that it is expected to benefit the
    Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Under U.S.&nbsp;GAAP, goodwill is not amortized but rather
    subjected to an annual test for impairment.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>j.&nbsp;<U>Capital Leases</U></I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Under Indonesian GAAP, a leased asset is capitalized only if all
    of the following criteria are met: (a)&nbsp;the lessee has an
    option to purchase the leased asset at the end of the lease
    period at a price agreed upon at the inception of the lease
    agreement, and (b)&nbsp;the sum of periodic lease payments, plus
    the residual value, will cover the acquisition price of the
    leased asset and related interest, and (c)&nbsp;there is a
    minimum lease period of 2&nbsp;years.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Under U.S.&nbsp;GAAP, a leased asset is capitalized if one of
    the following criteria is met: (a)&nbsp;there is an automatic
    transfer of ownership at the end of the lease term; or
    (b)&nbsp;the lease contains a bargain purchase option; or
    (c)&nbsp;the lease term is for 75% or more of the economic life
    of the asset; or (d)&nbsp;the net present value of minimum lease
    payments are at least 90% of the fair value of the asset.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>k.&nbsp;<U>Acquisition of Dayamitra</U></I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    On May&nbsp;17, 2001 the Company acquired a 90.32% interest in
    Dayamitra and contemporaneously acquired a call option to buy
    the other 9.68% at a fixed price at a stated future date, and
    provided to the minority interest holder a put option to sell
    the other 9.68% to the Company under those same terms; meaning
    that the fixed price of the call is equal to the fixed price of
    the put option. Under U.S.&nbsp;GAAP, the Company should account
    for the option contracts on a combined basis with the minority
    interest and account for it as a financing of the purchase of
    the remaining 9.68% minority interest. As such, under
    U.S.&nbsp;GAAP, the Company has consolidated 100% of Dayamitra
    and attributed the stated yield earned under the combined
    derivative and minority interest position to interest expense
    since May&nbsp;17, 2001.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    On December&nbsp;14, 2004, the Company exercised the option to
    acquire the 9.68% interest in Dayamitra.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Under Indonesian GAAP, prior to December&nbsp;14, 2004, the
    Company accounted for the remaining 9.68% of Dayamitra as
    minority interest. In addition, the option price that has been
    paid by the Company was presented as &#147;Advance payments for
    investments in shares of stock.&#148; The Company started
    consolidating the remaining 9.68% of Dayamitra on
    December&nbsp;14, 2004 following the exercise of the option.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-129

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    The difference in the timing of the 9.68% ownership interest
    recognition gives rise to differences in the timing and amounts
    of purchase consideration and liability recognized under
    Indonesian GAAP and U.S.&nbsp;GAAP.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>l.&nbsp;<U>Reversal of Difference Due to Change of Equity in
    Associated Companies</U></I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Under Indonesian GAAP, differences previously credited directly
    to equity as a result of equity transactions in associated
    companies are released to the statement of income upon the sale
    of an interest in the associate in proportion with the
    percentage of the interest sold.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Under U.S.&nbsp;GAAP, it is the Company&#146;s policy to include
    differences resulting from equity transactions in associated
    companies in equity. Such amounts can not be released to the
    statement of income and consequently remain in equity
    indefinitely.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>m.&nbsp;<U>Asset Retirement Obligations</U></I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Under Indonesian GAAP, legal obligations associated with the
    retirement of long-lived assets that result from the
    acquisition, construction, development and/or the normal
    operation of long-lived assets are charged to current operations
    as incurred.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Under U.S.&nbsp;GAAP, the estimated fair value of such
    obligations is accrued at the time of acquisition with an equal
    amount capitalized to the related long-lived assets and
    depreciated over the useful life of the assets. The Company and
    its subsidiaries identified their asset retirement obligations
    by reviewing contractual agreements to identify whether the
    Company and its subsidiaries are required to settle any
    obligations as a result of the prevailing laws, statute,
    ordinance, written or by legal construction of a contract under
    the doctrine of promissory estoppel.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>n.&nbsp;<U>Deferred Income Taxes</U></I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Under Indonesian GAAP, the Company does not recognize deferred
    taxes on temporary differences between the financial statement
    carrying amounts and tax bases of equity method investments when
    it is not probable that these differences will reverse in the
    foreseeable future.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Under U.S.&nbsp;GAAP, deferred taxes are recognized in full on
    temporary differences between the financial statement carrying
    amounts and tax bases of equity method investments.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>o.&nbsp;<U>Impairment of Assets</U></I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Under Indonesian GAAP, an impairment loss is recognized whenever
    the carrying amount of an asset or its cash-generating unit
    exceeds its recoverable amount. The recoverable amount of a
    fixed asset is the greater of its net selling price or value in
    use. In assessing value in use, the estimated future cash flows
    are discounted to their present value using a pre-tax discount
    rate that reflects current market assessments of the time value
    of money and the risks specific to the asset. An impairment loss
    can be reversed if there has been a change in the estimates used
    to determine the recoverable amount. An impairment loss is only
    reversed to the extent that the asset&#146;s carrying amount
    does not exceed the carrying amount that would have been
    determined, net of depreciation, if no impairment loss had been
    recognized.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Under U.S.&nbsp;GAAP, an impairment loss is recognized whenever
    the sum of the expected future cash flows (undiscounted and
    without interest charges) is less than the carrying amount of the</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-130

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    asset. An impaired asset is written down to its estimated fair
    value based on quoted market prices in active markets or
    discounting estimated future cash flows. When an impairment loss
    is recognized, the adjusted carrying amount of fixed asset
    becomes its new cost basis and reversals of previously
    recognized impairment losses are prohibited.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Through the year ended December&nbsp;31, 2004, there were no
    impairment charges recognized by the Company. As discussed in
    Note&nbsp;12, in 2005, the Company recognized impairment charges
    on BSS equipment which are part of transmission installation and
    equipment of fixed wireless assets. The sum of the expected
    future cash flows (undiscounted and without interest charges)
    relating to these impaired assets is less than the carrying
    amount of the assets and therefore, for U.S.&nbsp;GAAP reporting
    purposes, these assets have been written down to their estimated
    fair value based on discounted estimated future cash flows. The
    estimated fair values of the impaired assets determined under
    U.S.&nbsp;GAAP are the same as those determined under Indonesian
    GAAP; accordingly, there were no differences between Indonesian
    GAAP and U.S.&nbsp;GAAP.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;p.&nbsp;</I></TD>
    <TD>
    <I><U>Gain (loss) on Disposal of Property, Plant and
    Equipment</U></I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Under Indonesian GAAP, the Company classifies gain (loss) on
    disposal of property, plant and equipment as a component of
    other income (expense) which is excluded from determination of
    operating income.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Under U.S.&nbsp;GAAP, gain (loss) on disposal of property, plant
    and equipment is classified as a component of operating expenses
    and hence included in the determination of operating income. For
    the years ended December&nbsp;31, 2003, 2004 and 2005, operating
    income would have been higher (lower)&nbsp;by
    Rp182,883&nbsp;million, (Rp26,089)&nbsp;million and
    Rp46,193&nbsp;million, respectively, and other income
    (expenses)&nbsp;would have been lower (higher)&nbsp;by the same
    amounts due to the inclusion of the gain (loss) on disposal of
    property, plant and equipment in the determination of operating
    income.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;q.&nbsp;</I></TD>
    <TD>
    <I><U>Reversal of Difference in Value of Restructuring
    Transactions Between Entities Under Common Control</U></I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Under Indonesian GAAP, the Company is required to reclassify the
    difference in value of restructuring transactions between
    entities under common control as of January&nbsp;1, 2005 as a
    direct adjustment to retained earnings when the common control
    relationship between the transacting parties no longer exists as
    of January&nbsp;1, 2005.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Under U.S. GAAP, difference in value of restructuring
    transactions between entities under common control remains in
    equity indefinitely as part of the additional paid-in capital.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>(2)</B>&nbsp;A summary of the significant adjustments to
consolidated net income for the years ended December&nbsp;31,
2003, 2004 and 2005 and to consolidated stockholders&#146;
equity as of December&nbsp;31, 2004 and
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-131

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
2005 which would be required if U.S.&nbsp;GAAP had been applied,
instead of Indonesian GAAP, in the consolidated financial
statements are set forth below:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="53%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Note</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(As restated*)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income according to the consolidated statements of income
    prepared under Indonesian GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,087,227</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,614,568</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,993,566</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;GAAP adjustments&nbsp;&#151; increase (decrease) due
    to:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Termination benefits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(a</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(670,981</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capitalization of foreign exchange gains and losses, net of
    related depreciation of (Rp76,756) million, (Rp75,870) million
    and (Rp77,010) million, respectively</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(b</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>76,756</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,587</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>77,010</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest capitalized on property under construction, net of
    related depreciation of (Rp8,787) million, (Rp13,392) million
    and (Rp17,275) million, respectively</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(c</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39,077</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,802</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23,825</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenue-sharing arrangements</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(d</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23,159</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>155,369</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>69,173</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pension</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(e</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(109,334</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(148,517</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(104,877</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Post-retirement health care</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(e</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(75,964</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(104,466</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long service awards</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(e</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(122,462</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(90,933</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity in net income (loss) of associated companies</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(f</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(170</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(177</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(192</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of land rights</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(g</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(10,212</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(13,907</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,881</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenue recognition</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(h</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(53,226</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>54,159</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,046</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Goodwill</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(i</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,270</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,270</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,270</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capital leases</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(j</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,882</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,435</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(47,524</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Adjustment for consolidation of Dayamitra</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(k</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(24,476</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(72,361</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,084</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Reversal of difference due to change of equity in associated
    companies</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(l</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(38,425</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Asset retirement obligations</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(m</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(848</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(848</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(848</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

</DIV>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 0pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 8.0pt;color: #000000; background: #ffffff;">
 *&nbsp;The 2004 figures have been restated due to the adoption
of PSAK&nbsp;24R (see Note&nbsp;4a).
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-132

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Note</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(As restated*)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred income tax:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred income tax on equity method investments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(n</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>119,456</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11,234</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,206</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred income tax effect on U.S.&nbsp;GAAP adjustments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>323,089</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>61,742</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,288</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(297,983</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(127,976</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(137,231</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Minority interest</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,396</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(18,019</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(16,244</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net adjustments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(296,587</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(145,995</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(153,475</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income in accordance with U.S.&nbsp;GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,790,640</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,468,573</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,840,091</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income per share&nbsp;&#151; in full Rupiah amount</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>287.23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>320.86</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>388.89</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income per ADS&nbsp;&#151; in full Rupiah amount
    (40&nbsp;Series&nbsp;B shares per ADS)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,489.40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,834.47</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,555.74</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 15pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>*&nbsp;</TD>
    <TD align="left">
    The 2004 figures have been restated due to the adoption of
    PSAK&nbsp;24R (see Note&nbsp;4a).</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-133

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 18pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="58%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Note</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(As restated*)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stockholders&#146; equity according to the consolidated balance
    sheets prepared under Indonesian GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,128,036</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23,292,401</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    U.S.&nbsp;GAAP adjustments&nbsp;&#151; increase (decrease) due
    to:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capitalization of foreign exchange differences&nbsp;&#151; net
    of related depreciation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(b</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(548,886</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(471,876</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest capitalized on property under construction&nbsp;&#151;
    net of related depreciation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(c</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>128,614</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>152,439</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenue-sharing arrangements</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(d</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(292,327</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(223,154</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pension</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(e</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,973,837</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,851,509</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Post-retirement health care</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(e</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,142,561</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,038,095</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long service awards</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(e</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(122,462</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(213,395</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity in net income (loss) of associated companies</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(f</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(18,429</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(18,621</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of land rights</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(g</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(79,118</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(83,999</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Revenue recognition</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(h</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(714,389</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(709,343</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Goodwill</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(i</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>63,809</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>85,079</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Capital leases</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(j</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,688</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(29,836</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Adjustment for consolidation of Dayamitra</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(k</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(61,728</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(56,644</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Asset retirement obligations</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(m</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,696</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,544</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred income tax:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred income tax on equity method investments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(n</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>39,343</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35,040</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred income tax effect on U.S.&nbsp;GAAP adjustments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(89,704</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(66,182</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2"><FONT style="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,437,113</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,286,568</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Minority interest</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,763</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(10,481</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net adjustments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,442,876</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,276,087</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stockholders&#146; equity in accordance with U.S.&nbsp;GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,570,912</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,568,488</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>*&nbsp;</TD>
    <TD align="left">
    The 2004 figures have been restated due to the adoption of
    PSAK&nbsp;24R (see Note&nbsp;4a).</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-134

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;
The changes in stockholders&#146; equity in accordance with
U.S.&nbsp;GAAP for the years ended December&nbsp;31, 2003, 2004
and 2005 are as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="55%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stockholders&#146; equity at beginning of year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,910,864</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,284,692</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,570,912</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Changes during the year:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income under U.S.&nbsp;GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,790,640</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,468,573</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,840,091</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Dividends</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,338,109</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,186,991</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,921,227</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accumulated other comprehensive income, net of tax</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(78,703</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,638</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11,288</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Difference in value of restructuring transactions between
    entities under common control</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>90,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stockholders&#146; equity at end of year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,284,692</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,570,912</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,568,488</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
With regard to the consolidated balance sheets, the following
significant captions determined under U.S.&nbsp;GAAP would have
been:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="71%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consolidated balance sheets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,610,433</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,952,600</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Non-current assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>47,091,387</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>52,527,929</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>56,701,820</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>63,480,529</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,650,470</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,796,402</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Non-current liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,547,769</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,799,964</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32,198,239</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32,596,366</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Minority interest in net assets of subsidiaries</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,932,669</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,315,675</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stockholders&#146; equity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,570,912</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,568,488</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total liabilities and stockholders&#146; equity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>56,701,820</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>63,480,529</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-135

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)</B><I>&nbsp;</I></TD>
    <TD>
    <I>Additional financial statement disclosures required by
    U.S.&nbsp;GAAP and U.S.&nbsp;SEC</I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>a.&nbsp;<U>Income Tax</U></I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    The reconciliation between the expected income tax provision in
    accordance with U.S.&nbsp;GAAP and the actual provision for
    income tax recorded in accordance with U.S.&nbsp;GAAP is as
    follows:</TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="58%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Consolidated income before tax in accordance with U.S.&nbsp;GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10,711,267</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,570,911</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,089,111</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income tax in accordance with U.S.&nbsp;GAAP at 30% statutory
    tax rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,213,380</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,771,273</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,826,733</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Effect of non-deductible expenses (non-taxable income) at the
    enacted maximum tax rate (30%)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net periodic post-retirement health care benefit cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>188,375</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>139,834</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>169,534</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of discount on promissory notes and other borrowing
    costs</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>132,876</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>136,994</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>62,132</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Tax penalty</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,521</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,941</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,155</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Employee benefits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,342</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,719</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>18,618</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Permanent differences of the KSO Units</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,739</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,213</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,458</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income which was already subject to final tax</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(61,876</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(30,743</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(68,336</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Others</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(93,812</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>66,787</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>118,511</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>205,165</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>356,745</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>342,072</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Provision for income tax in accordance with U.S.&nbsp;GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,418,545</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,128,018</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,168,805</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-136

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    For the three-year period ended December&nbsp;31, 2005, all of
    the Company&#146;s operating revenues occurred in Indonesia, and
    accordingly, the Company has not been subject to income tax in
    other countries.</TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="70%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Deferred tax assets</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Trade accounts receivable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>228,889</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>248,260</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Inventories</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15,494</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13,884</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Tax loss carryforwards</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>239,501</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>123,309</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued long service awards</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>172,399</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>225,454</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferral of revenue</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>220,538</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>218,366</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term investments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44,029</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41,706</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Liabilities of business acquisitions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,009,932</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>945,403</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued employee benefits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46,043</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>63,002</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Others</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>40,532</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>103,445</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,017,357</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,982,829</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Deferred tax liabilities</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Property, plant and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,215,173</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,882,932</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Intangible assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,592,645</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,327,225</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pension benefit cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(153,177</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(163,747</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Prepaid expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(34,290</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(31,877</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,995,285</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,405,781</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total deferred tax liabilities&nbsp;&#151; net</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,977,928</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,422,952</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>b.&nbsp;<U>Fair Value of Financial Instruments</U></I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    The following methods and assumptions are used to estimate the
    fair value of each class of financial instruments:</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="13%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>Cash and cash equivalents and temporary investments</I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    The carrying amount approximates fair value because of the
    short-term nature of the instruments.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="13%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>Short-term bank loans</I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    The carrying amount approximates fair value because of the
    short-term nature of the instruments.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-137

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="13%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>Long-term liabilities</I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    The fair value of long-term liabilities other than bonds and
    guaranteed notes is estimated by discounting the future cash
    flows of each instrument at rates currently offered to the
    Company for similar debt instruments of comparable maturities by
    the Company&#146;s bankers.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    The fair value of bonds and guaranteed notes is based on market
    prices at balance sheet date.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    The estimated fair values of the Company and its
    subsidiaries&#146; financial instruments are as follows:</TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="70%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Carrying</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Fair</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amount</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Value</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>2004</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash and cash equivalents</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,856,123</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,856,123</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Temporary investments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,949</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,949</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Short-term bank loans</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,101,633</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,101,633</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term liabilities:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Two-step loans</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,018,705</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,983,321</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bonds</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>986,564</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,245,208</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Medium-term notes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,077,703</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,100,032</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Guaranteed notes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>736,174</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>863,184</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank loans</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,378,315</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,462,916</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Liabilities of business acquisitions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,317,225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,033,748</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>2005</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash and cash equivalents</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,374,684</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,374,684</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Temporary investments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,064</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,064</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Short-term bank loans</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>173,800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>173,800</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Long-term liabilities:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Two-step loans</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,329,477</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,001,102</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bonds</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>991,850</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,031,040</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Medium-term notes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>609,329</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>582,220</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Bank loans</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,386,646</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,267,269</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Liabilities of business acquisitions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,990,353</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,162,814</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    The methods and assumptions followed to determine the fair value
    estimates are inherently judgmental and involve various
    limitations, including the following:</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    i.&nbsp;Fair values presented do not take into consideration the
    effect of future currency fluctuations.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    ii.&nbsp;Estimated fair values are not necessarily indicative of
    the amounts that the Company and its subsidiaries would record
    upon disposal/termination of the financial instruments.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-138

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>c.&nbsp;<U>Comprehensive Income</U></I></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="62%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income under U.S.&nbsp;GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,790,640</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,468,573</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,840,091</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unrealized holding gain (loss) on available-for-sale securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>884</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,632</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign currency translation adjustments of associates</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(78,703</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,754</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,560</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Minimum pension liability adjustments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(12,216</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,711,937</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,473,211</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,828,803</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Adjustments to net income to arrive at comprehensive income
    include unrealized holding gains (losses) on available-for-sale
    securities, foreign currency translation adjustments and minimum
    pension liability adjustments. The foreign currency translation
    adjustments of associates are reported net of income tax of
    Rp67,270&nbsp;million, Rp1,609&nbsp;million and
    Rp1,097&nbsp;million for the years ended December&nbsp;31, 2003,
    2004 and 2005, respectively. The minimum pension liability
    adjustment for 2005 is reported net of income tax of
    Rp5,235&nbsp;million. The components of accumulated other
    comprehensive income are as follows:</TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="67%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unrealized holding gain (loss) on available-for-sale securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>884</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(748</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign currency translation adjustments of associates</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>156,962</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>160,716</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>163,276</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Minimum pension liability adjustments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(12,216</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>156,962</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>161,600</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>150,312</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-139

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<I>d.&nbsp;<U>Employee Benefit Plans</U></I>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>The Company</U></I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    The disclosures under SFAS&nbsp;No.&nbsp;132 (Revised 2003) and
    SFAS&nbsp;No.&nbsp;106 are as follows:</TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="35%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Pension</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Health Care</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Components of Net Periodic Benefit Cost</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Service cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>119,089</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>137,264</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>138,117</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>88,394</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>76,163</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>87,636</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>537,797</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>740,494</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>789,830</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>493,596</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>411,110</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>507,994</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Expected return on plan assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(421,706</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(436,672</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(533,333</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(56,004</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(61,084</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(103,498</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of prior service cost (gain)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>201,265</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>201,265</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>201,265</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(367</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(367</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(367</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Recognized actuarial loss (gain)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(43,020</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>57,641</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,244</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>99,286</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>52,006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>88,589</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of transition obligation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28,634</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28,634</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>28,634</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,325</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,325</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24,325</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net periodic benefit cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>422,059</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>728,626</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>645,757</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>649,230</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>502,153</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>604,679</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amounts charged to KSO Units under contractual agreement</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(29,896</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(16,369</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(18,660</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(7,795</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(9,913</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11,627</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total net periodic benefit cost less amounts charged to KSO Units</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>392,163</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>712,257</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>627,097</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>641,435</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>492,240</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>593,052</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-140

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    The following table presents the change in benefit obligation,
    the change in plan assets, funded status of the plan and the net
    amount recognized in the Company&#146;s U.S.&nbsp;GAAP balance
    sheets as of December&nbsp;31, 2004 and 2005:</TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="47%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Pension</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Health Care</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Change in benefit obligation</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Benefit obligation at beginning of year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,852,923</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,315,182</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,787,389</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,681,005</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Service cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>137,264</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>138,117</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>76,163</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>87,636</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>740,494</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>789,830</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>411,110</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>507,994</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Plan participants&#146; contributions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>43,906</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41,371</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Actuarial (gain)&nbsp;loss</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(155,128</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(794,180</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>529,618</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>423,833</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Benefits paid</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(304,277</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(350,220</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(123,275</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(125,979</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Benefit obligation at end of year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,315,182</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,140,100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,681,005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,574,489</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Change in plan assets</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fair value of plan assets at beginning of year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,671,309</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,884,523</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>505,340</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,138,768</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Actual return on plan assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>627,842</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>155,754</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>32,173</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>45,209</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Employer contributions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>845,743</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>698,526</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>724,530</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>435,899</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Plan participants&#146; contributions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>43,906</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41,371</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Benefits paid</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(304,277</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(350,220</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(123,275</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(125,979</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fair value of plan assets at end of year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,884,523</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,429,954</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,138,768</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,493,897</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Funded status</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,430,659</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,710,146</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,542,237</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,080,592</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unrecognized prior service cost (gain)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,861,565</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,660,300</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,566</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,199</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unrecognized net actuarial loss</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>974,763</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>536,918</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,459,408</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,852,943</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unrecognized net transition obligation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>120,257</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>91,623</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>243,249</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>218,924</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net amount recognized</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>525,926</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>578,695</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,841,146</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,009,924</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    The accumulated benefit obligation of the Company&#146;s defined
    benefit pension plan was Rp4,656,605&nbsp;million and
    Rp4,829,227&nbsp;million as of December&nbsp;31, 2004 and 2005,
    respectively.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    The measurement date used to determine pension and health care
    benefit measures for the pension plan and the health care plan
    is December&nbsp;31 for each of the years.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    The assumptions used by the independent actuary to determine the
    benefit obligation of the plans as of December&nbsp;31, 2004 and
    2005 were as follows:</TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="68%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Pension</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Health Care</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Discount rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rate of compensation increase</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8.8</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-141

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    The assumption used by the independent actuary to determine the
    net periodic benefit cost of the plans for the years ended
    December&nbsp;31, 2003, 2004 and 2005 were as follows:</TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="52%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Pension</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Health Care</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Discount rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Expected long-term return on plan assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.5</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>13</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rate of compensation increase</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Assumed health care cost trend rates at December&nbsp;31, 2003,
    2004 and 2005 are as follows:</TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="73%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Health care cost trend assumed for next year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9%</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rate to which the cost trend is assumed to decline (the ultimate
    trend rate)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9%</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Year that the rate reaches the ultimate trend rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2006</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    The actuarial valuations for the defined benefit pension plan
    and post-retirement health care plan as of December&nbsp;31,
    2003, 2004 and 2005 were prepared on May&nbsp;21, 2004,
    March&nbsp;15, 2005, and February&nbsp;27, 2006, respectively,
    by an independent actuary.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Discount rate is based on the Government Bond yields, i.e.,
    11.38%. The rate of compensation increase assumed is based on
    long-term inflation in the order of 6%&nbsp;&#151; 7%. The
    expected long-term return on plan assets is based on the average
    rate of earnings expected on the funds invested or to be
    invested.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Assumed health care cost trends have a significant effect on the
    amounts reported for the health care plan. A
    one-percentage-point change in assumed health care cost trend
    rates would have the following effects:</TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="64%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>1-Percentage-</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>1-Percentage-</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Point Increase</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Point Decrease</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Effect on total of service and interest cost components</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>159,073</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(126,008</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Effect on post-retirement benefit obligation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,143,943</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(908,400</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    The Company&#146;s pension plan weighted average asset
    allocations at December&nbsp;31, 2004 and 2005, by asset
    category, are as follows:</TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="81%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Plan Assets</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>as of</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>December&nbsp;31</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Asset Category</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Debt securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>71</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>75</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deposit securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Real estate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-142

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Equity securities include the Company&#146;s common stock in the
    amounts of Rp96,063&nbsp;million (2.0&nbsp;percent of total plan
    assets) and Rp124,189&nbsp;million (2.3&nbsp;percent of total
    plan assets) at December&nbsp;31, 2004 and 2005, respectively.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    Debt securities include the Company&#146;s bonds in the amounts
    of Rp159,253&nbsp;million (3.3&nbsp;percent of total plan
    assets) and Rp223,736&nbsp;million (4.1&nbsp;percent of total
    plan assets) at December&nbsp;31, 2004 and 2005, respectively.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    The Company&#146;s post-retirement health care plan weighted
    average asset allocations at December&nbsp;31, 2004 and 2005, by
    asset category, are as follows:</TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="81%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Plan Assets</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>as of</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>December&nbsp;31</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD align="left" nowrap><B>Asset Category</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Debt securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deposit securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>84</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>60</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Debt securities include the Company&#146;s medium-term notes in
the amount of Rp145,000&nbsp;million (12.7&nbsp;percent of total
plan assets) at December&nbsp;31, 2004 and the Company&#146;s
medium-term notes and bonds in the total amount of
Rp232,394&nbsp;million (15.6&nbsp;percent of total plan assets)
at December&nbsp;31, 2005.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><U>Contributions</U></I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company expects to contribute Rp693,502&nbsp;million to its
defined benefit pension plan and Rp568,755&nbsp;million to its
post-retirement health care plan during 2006.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><U>Expected Future Benefit Payments</U></I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The expected benefit payments are as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="71%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Health</B></TD><TD></TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Pension</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Care</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2006</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>387,235</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>138,566</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2007</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>351,742</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>152,035</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2008</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>394,299</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>170,277</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2009</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>472,327</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>191,692</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2010</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>565,764</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>216,647</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2011&nbsp;&#151; 2015</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,824,443</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,558,154</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-143

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Telkomsel</U></I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><U>Pension plan</U></I></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="71%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Service cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,679</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,300</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,901</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,337</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,199</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,412</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Expected return on plan assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,013</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(824</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(832</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of prior service cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>125</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Recognized actuarial loss</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>587</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,157</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,920</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of transition obligation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>458</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>458</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>458</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net periodic benefit cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,048</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,415</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22,883</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table presents the change in benefit obligation,
the change in plan assets, funded status of the plan and the net
amount recognized in Telkomsel&#146;s U.S.&nbsp;GAAP balance
sheets as of December&nbsp;31, 2004 and 2005:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="74%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Change in benefit obligation</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Benefit obligation at beginning of year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>47,646</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>59,145</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Service cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,300</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,901</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,199</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,412</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Actuarial loss</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>96,151</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Benefits paid</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,929</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Benefit obligation at end of year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>59,145</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>173,680</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Change in plan assets</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fair value of plan assets at beginning of year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8,504</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,182</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Actual return on plan assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,678</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,210</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Employer contributions</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,928</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Benefits paid</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,929</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fair value of plan assets at end of year</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11,182</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,971</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Funded status</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(47,963</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(152,709</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unrecognized prior service cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,048</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>274</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unrecognized net actuarial loss</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20,820</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>120,725</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unrecognized transition obligation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,648</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,190</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net amount recognized</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(18,447</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(25,520</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-144

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 24pt; ">

<TR style="font-size: 1pt;">
    <TD width="75%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accumulated benefit obligation</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,045</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>70,406</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Fair value of plan assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(11,182</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(20,971</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unfunded accumulated benefits (required minimum liability)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14,863</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>49,435</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued pension cost</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(18,447</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(25,520</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Additional liability under U.S.&nbsp;GAAP</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23,915</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Intangible asset</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,464</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other comprehensive income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>17,451</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The actuarial calculation for the pension plan is prepared by an
independent actuary. The measurement date used to determine
pension benefit measures for the pension plan is
December&nbsp;31 of each of the years.
</DIV>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The assumptions used by the independent actuary to determine the
benefit obligation of the plan as of 31&nbsp;December&nbsp;31,
2004 and 2005 were as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="81%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Discount rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rate of compensation increase</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>8</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The assumptions used by the independent actuary to determine the
net periodic pension cost of the plan for the years ended
December&nbsp;31, 2003, 2004 and 2005 were as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="73%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Discount rate</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>11</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Expected long-term return on plan assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.5</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7.5</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Rate of compensation increase</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I>e.&nbsp;<U>Recent U.S. Accounting Pronouncements</U></I></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    SFAS&nbsp;No.&nbsp;123R, <I>&#147;Share-Based Payment.&#148;</I>
    In December 2004, the FASB issued SFAS&nbsp;No.&nbsp;123R which
    requires companies to measure compensation cost for share-based
    payments at fair value. It is not expected that the adoption of
    SFAS&nbsp;No.&nbsp;123R will have a material effect on the
    Company&#146;s consolidated financial statements.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    SFAS&nbsp;No.&nbsp;151 <I>&#147;Inventory Cost&nbsp;&#151; an
    amendment of ARB No.&nbsp;43, Chapter&nbsp;4</I>.&#148; In
    November 2004, the FASB issued SFAS&nbsp;No.&nbsp;151 which
    requires certain abnormal expenditures to be recognized as
    expenses in current period. It also requires that the amount of
    fixed production overhead allocated to inventory be based on the
    normal capacity of the production facilities.
    SFAS&nbsp;No.&nbsp;151 is effective for financial statements for
    fiscal years beginning after June&nbsp;15, 2005. It is not
    expected that the adoption of SFAS&nbsp;No.&nbsp;151 will have a
    material effect on the Company&#146;s consolidated financial
    statements.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    SFAS&nbsp;No.&nbsp;153 <I>&#147;Exchanges of Nonmonetary
    Assets&nbsp;&#151; an amendment of APB Opinion
    No.&nbsp;29</I>.&#148; In December 2004, the FASB issued
    SFAS&nbsp;No.&nbsp;153, which is effective for nonmonetary asset
    exchanges occurring in fiscal periods beginning after
    June&nbsp;15, 2005. SFAS&nbsp;No.&nbsp;153 requires that <BR></TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-145

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<DIV style="margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    exchanges of productive assets be accounted for at fair value
    unless fair value can not be reasonably determined or the
    transaction lacks commercial substance. It is not expected that
    the adoption of this standard will have a material effect on the
    Company&#146;s consolidated financial statements.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    SFAS&nbsp;No.&nbsp;154 <I>&#147;Accounting Changes and Error
    Corrections&nbsp;&#151; a replacement of APB Opinion No.&nbsp;20
    and FASB Statement No.&nbsp;3.</I>&#148; In May 2005, the FASB
    issued SFAS&nbsp;No.&nbsp;154 which replaces APB Opinion
    No.&nbsp;20, &#147;Accounting Changes,&#148; and
    SFAS&nbsp;No.&nbsp;3, &#147;Reporting Accounting Changes in
    Interim Financial Statements,&#148; and changes the requirements
    for the accounting for and reporting of a change in accounting
    principle. SFAS&nbsp;No.&nbsp;154 applies to all voluntary
    changes in accounting principle. It also applies to changes
    required by an accounting pronouncement in the unusual instance
    that the pronouncement does not include specific transition
    provisions. When a pronouncement includes specific transition
    provisions, those provisions should be followed.
    SFAS&nbsp;No.&nbsp;154 shall be effective for all accounting
    changes and any error corrections occurring after
    January&nbsp;1, 2006.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    FSP
    No.&nbsp;FAS&nbsp;<FONT style="white-space: nowrap">13-1</FONT>
    <I>&#147;Accounting for Rental Costs Incurred During a
    Construction Period.</I>&#148; In October 2005, the FASB issued
    FSP
    No.&nbsp;FAS&nbsp;<FONT style="white-space: nowrap">13-1</FONT>
    which requires a reporting entity to recognize rental costs
    associated with ground or building operating leases that are
    incurred during a construction period as rental expense in
    income from continuing operations. FSP
    No.&nbsp;FAS&nbsp;<FONT style="white-space: nowrap">13-1</FONT>
    is applied in the first reporting period beginning after
    December&nbsp;15, 2005. It is not expected that the adoption of
    FSP
    No.&nbsp;FAS&nbsp;<FONT style="white-space: nowrap">13-1</FONT>
    will have a material effect on the Company&#146;s consolidated
    financial statements.</TD>
</TR>

<TR>
    <TD style="font-size: 6.0pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    SFAS&nbsp;No.&nbsp;155, <I>&#147;Accounting for Certain Hybrid
    Financial Instruments&nbsp;&#151; an amendment of FASB
    Statements No.&nbsp;133 and 140.</I>&#148; In February 2006, the
    FASB issued SFAS&nbsp;No.&nbsp;155 which amends
    SFAS&nbsp;No.&nbsp;133 to narrow the scope exception for
    interest-only and principal-only strips on debt instruments to
    include only such strips representing rights to receive a
    specified portion of the contractual interest or principal cash
    flows. SFAS&nbsp;No.&nbsp;155 also amends SFAS&nbsp;No.&nbsp;140
    to allow qualifying special-purpose entities to hold a passive
    derivative financial instrument pertaining to beneficial
    interests that itself is a derivative financial instrument.
    SFAS&nbsp;No.&nbsp;155 is effective for all financial
    instruments acquired, issued, or subject to a remeasurement (new
    basis) event occurring after the beginning of an entity&#146;s
    first fiscal year that begins after September&nbsp;15, 2006. It
    is not expected that the adoption of SFAS&nbsp;No.&nbsp;155 will
    have a material effect on the Company&#146;s consolidated
    financial statements.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10.0pt;color: #000000; background: #ffffff;">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B>55.&nbsp;</B></TD>
    <TD>
    <B>RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY
    OPERATING ACTIVITIES</B></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="55%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(As restated*)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,087,227</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,614,568</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,993,566</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Adjustments to reconcile net income to net cash provided by
    operating activities:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Depreciation of property, plant and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,779,520</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,438,557</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,570,739</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Write-down of assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>616,768</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 8.0pt;color: #000000; background: #ffffff;">
*&nbsp;The 2004 figures have been restated due to the adoption
of PSAK&nbsp;24R (see Note&nbsp;4a).
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-146

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>PERUSAHAAN PERSEROAN (PERSERO)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>P.T.&nbsp;TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; ">
<B>NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>DECEMBER 31, 2003, 2004 AND 2005</B>
</DIV>

<DIV align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">
<B>(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10.0pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="55%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8.0pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(As restated*)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss on procurement commitments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>79,359</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(366,024</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(317,941</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(344,686</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,383,446</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,270,136</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,177,268</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Foreign exchange (gain)&nbsp;loss</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(363,505</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,192,842</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>420,419</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Equity in net income of associated companies</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(2,819</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,420</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(10,879</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    (Gain) loss on sale of property, plant and equipment</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(182,883</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,089</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(46,193</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Insurance proceeds</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(27,580</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss on redemption of Telkomsel&#146;s bonds</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>44,628</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>19,038</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss on sale of long-term investments</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>46,595</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of goodwill and other intangible assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>730,659</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>872,330</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>918,153</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of unearned income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(61,812</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(93,164</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(149,824</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amortization of deferred charges</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,555</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25,751</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26,921</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Provision for doubtful accounts and inventory obsolescence</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>326,419</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>357,096</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>488,973</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income tax expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,861,090</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,178,526</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,183,887</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Minority interest in net income of subsidiaries</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,503,478</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,956,301</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>3,063,971</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Changes in assets and liabilities:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Trade accounts receivable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(827,772</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(670,103</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(706,726</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other accounts receivable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6,784</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>95,757</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(124,746</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Inventories</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>76,486</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(58,329</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(28,211</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Prepaid expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(84,690</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(179,573</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(578,364</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Prepaid taxes</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(127,607</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>173,189</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,217</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Prepaid pension benefit costs</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(260,041</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>208</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>722</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Trade accounts payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>593,826</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(47,618</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>284,599</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Other accounts payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(27,837</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(96,022</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1,602</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Taxes payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>477,961</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(105,991</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>156,089</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(779,917</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(65,078</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>419,465</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Unearned income</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>317,650</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>266,774</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>562,719</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Advances from customers and suppliers</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(30,884</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(78,028</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(55,343</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued pension and other post-retirement benefit costs</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>7,041</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(246,867</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(149,254</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued long service awards</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,504</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(41,196</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>74,683</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accrued post-retirement health care benefits</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>460,757</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(298,341</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>64,314</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest paid</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,178,332</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,348,919</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(1,200,484</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Interest received</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>369,982</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>321,677</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>341,848</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income tax paid</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3,905,317</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,132,359</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(4,938,916</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net cash provided by operating activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>12,852,532</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>16,051,480</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>21,102,680</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3.0pt;color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 8.0pt;color: #000000; background: #ffffff;">
*&nbsp;The 2004 figures have been restated due to the adoption
of PSAK&nbsp;24R (see Note&nbsp;4a).
</DIV>

<P align="center" style="font-size: 10.0pt;color: #000000; background: #ffffff;">F-147
</BODY>
</HTML>
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P.T. Telekomunikasi Indonesia Tbk.
Table of Contents
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 20-F
o
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g)
    OF THE SECURITIES EXCHANGE ACT OF 1934
OR
þ
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2005
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
OR
o
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
    THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report
Commission file number 1-14406
Perusahaan Perseroan (Persero)
P.T. Telekomunikasi Indonesia Tbk.
(Exact name of Registrant as specified 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) 452-1510
(62) (21) 521-5109*
(Address of Registrant's principal executive offices)
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 250 Rupiah per share
New York Stock Exchange
Series B Shares, par value 250 Rupiah per share
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 250 Rupiah per share
1
Series B Shares, par value 250 Rupiah per share
20,159,999,279
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities
Act.    Yes
o
No
þ
If this report is an annual or transition report, indicate by
check mark if the registrant is not required to file reports
pursuant to Section 13 or 15(d) of the Securities Exchange
Act of
1934.    Yes
o
No
þ
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the Registrant
was required to file such reports) and (2) has been subject
to such filing requirements for the past
90 days.    Yes
þ
No
o
Indicate by check mark whether the registrant is a large
accelerate filer, an accelerated filer, or an non-accelerated
filer. See definition of "accelerated filer and large
accelerated filer" in Rule 12b-2 of the Exchange Act.
(Check one):
Large accelerated
filer
þ
Accelerated
filer
o
Non-accelerated
filer
o
Indicate by check mark which financial statement item the
Registrant has elected to
follow.    Item 17
o
Item 18
þ
If this is an annual report, indicate by check mark whether the
registrant is a shell company (as defined in
Rule 12b-2 of the Exchange
Act).    Yes
o
No
þ
*
Investor Relations Unit, Graha Citra Caraka, Jl. Gatot Subroto,
    No. 52, 5th Floor, Jakarta 12570.
**
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
1
FORWARD LOOKING STATEMENTS
7
CONVENTIONS
7
PART I
Item 1.
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT
    AND ADVISERS*
8
Item 2.
OFFER STATISTICS AND EXPECTED TIMETABLE*
8
Item 3.
KEY INFORMATION
8
Item 4.
INFORMATION ON THE COMPANY
25
Item 5.
OPERATING AND FINANCIAL REVIEW AND
    PROSPECTS
78
Item 6.
DIRECTORS, SENIOR MANAGEMENT AND
    EMPLOYEES
140
Item 7.
MAJOR STOCKHOLDERS AND RELATED PARTY
    TRANSACTIONS
150
Item 8.
FINANCIAL INFORMATION
158
Item 9.
THE OFFER AND LISTING
160
Item 10.
ADDITIONAL INFORMATION
164
Item 11.
QUANTITATIVE AND QUALITATIVE DISCLOSURE
    ABOUT MARKET RISK
179
Item 12.
DESCRIPTION OF SECURITIES OTHER THAN EQUITY
    SECURITIES*
183
PART II
Item 13.
DEFAULTS, DIVIDEND ARREARAGES AND
    DELINQUENCIES*
183
Item 14.
MATERIAL MODIFICATIONS TO THE RIGHTS OF
    SECURITY HOLDERS AND USE OF PROCEEDS*
183
Item 15.
CONTROL AND PROCEDURES
183
Item 16.
RESERVED
186
Item 16A.
AUDIT COMMITTEE FINANCIAL EXPERT
186
Item 16B.
CODE OF ETHICS
186
Item 16C.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
186
Item 16D.
EXEMPTIONS FROM THE LISTING STANDARDS FOR
    AUDIT COMMITTEES
187
Item 16E.
PURCHASES OF EQUITY SECURITIES BY THE
    ISSUER AND AFFILIATED PURCHASERS*
188
PART III
Item 17.
CONSOLIDATED FINANCIAL STATEMENTS*
188
Item 18.
CONSOLIDATED FINANCIAL STATEMENTS
188
Item 19.
EXHIBITS
188
Ex-4.45 Supply Contract for The Procurement and Installation of Ring JASUKA Backbone between TELKOM and NEC-SIEMENS CONSORTIUM, dated June 10, 2005.
Ex-4.46 Supply Contract for Capacity Expansion of Submarine Cable System Tanjung Pandan-Pontianak between TELKOM and NEC Corporation, dated July 2005.
EX-12.1 CERTIFICATION PURSUANT TO SECTION 302
EX-12.2 CERTIFICATION PURSUANT TO SECTION 302
EX-13.1 CERTIFICATION PURSUANT TO SECTION 906
EX-13.2 CERTIFICATION PURSUANT TO SECTION 906
*
Omitted because the item is not applicable.
i
Table of Contents
DEFINITIONS
"ADS"
American Depositary Share, which is a certificate (known as an
    ADR) being traded on a U.S. securities market (such as New York
    Stock Exchange) representing a number of foreign shares. One ADS
    of TELKOM represents 40 of TELKOM's Series B shares.
    The ratio of shares to ADS is 40:1.
"ADSL"
(Asymmetric Digital Subscriber Line) is a technology that allows
    combinations of services including voice, data and one way full
    motion video to be delivered over existing copper feeder
    distribution and subscriber lines.
"AMPS"
(Advanced Mobile Phone System) is an analog mobile cellular
    system standard.
"ARPU"
(Average Revenue Per User) serves as an evaluation statistic in
    connection with a network operator's subscriber base. It is
    computed by dividing total revenues (including gross
    interconnection revenues) for a given period by the respective
    average number of subscribers for such period, except that for
    the mobile cellular service, revenues do not include connection
    fees, interconnection revenues, international roaming revenues
    from non-subscribers and dealer discounts.
"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 environment to facilitate the
    exchange of business information and automate commercial
    transaction designed to automate and optimize interactions
    between business partners.
"backbone"
refers to the main telecommunications network consisting of
    transmission and switching facilities connecting several network
    access nodes. The transmission links between nodes and switching
    facilities include microwave, submarine cable, satellite,
    optical fiber and other transmission technology.
"bandwidth"
refers to the capacity of a communication link.
"BTS"
(Base Transceiver Station) refers to equipment that transmits
    and receives radio telephony signals to and from other
    telecommunication systems.
"call completion rate"
is 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, or "ASR".
1
Table of Contents
"capacity utilization"
refers to the ratio of lines in service to local exchange
    capacity or installed lines.
"CDMA"
(Code Division Multiple Access) is a wide-band spread-spectrum
    network technology.
"DCS1800"
(Digital Communication System) is a mobile cellular system using
    GSM technology operating in the 1800 MHz frequency band.
"DGPT"
is the Director General of Post and Telecommunications.
"Directors' Decree on Internal Control"
is the decree of the Board of Directors, dated October 29,
    2004, titled "Internal Control over Financial Reporting in
    Compliance with the Sections 302 and 404 of the Sarbanes
    Oxley Act of 2002" on certain policies and procedures for
    effective internal controls and good corporate governance and
    early detection of errors, frauds and other misuses".
"distribution point"
is the point of interconnection between the dropwire and the
    secondary cable running to a cabinet and/or a local exchange.
"DLD"
refers to domestic long-distance telecommunications services
    such as long-distance telephone calls and leased lines services.
"downlink"
refers to the receiving portion of a satellite circuit extending
    from the satellite to the Earth.
"dropwire"
is the wire connecting the subscriber's premises to the
    distribution point.
"DTR"
(Distributable TELKOM Revenues) is the monthly revenue share
    payable by each KSO Unit to TELKOM under the KSO Agreements,
    being a specified percentage of total KSO revenues in a KSO Unit
    after deduction of specified KSO operating expenses and MTR.
"dualband"
refers to the capability of a mobile cellular network and mobile
    cellular handsets to operate across two frequency bands, for
    example GSM 900 and GSM 1800.
"duopoly system"
is a system allowing only two national operators, which in
    Indonesia's case are TELKOM and Indosat, to provide fixed
    line telecommunication services including domestic long-distance
    and international long-distance.
"earth station"
is the antenna and associated equipment used to receive or
    transmit telecommunication signals via satellite.
"Erlang"
refers to a unit of measurement of telephone traffic equal to
    one hour of conversation.
"existing installations"
refer to telecommunications facilities, including telephone
    lines, network infrastructure and related assets in existence in
    each KSO Division as of the beginning of each KSO Period plus
    certain facilities and equipment constructed or installed by
    TELKOM in the KSO Units after such dates to be managed by a KSO
    Investor.
2
Table of Contents
"fixed cellular"
refers to a form of fixed wireless technology which uses
    conventional cellular network configurations to link a
    subscriber at a fixed location to a local exchange.
"fixed line"
refers to fixed wireline and fixed wireless.
"fixed wireless"
refers to a local wireless transmission link using cellular,
    microwave or radio technology to link a subscriber at a fixed
    location to a local exchange.
"fixed wireline"
refers to a fixed path (wire or cable) linking a subscriber at a
    fixed location to a local exchange, usually with an individual
    phone number.
"frame relay"
is a packet-switching protocol (in which messages are divided
    into packets before they are sent) for connecting devices on a
    computer network that spans a relatively large geographical area.
"Government"
refers to the Government of the Republic of Indonesia.
"GPRS"
(General Packet Radio Service) is a data packet switching
    technology that allows information to be sent and received
    across a mobile network and only utilizes the network when there
    is data to be sent.
"GSM"
(Global System for Mobile Telecommunication) is a European
    standard for digital cellular telephone.
"IDD"
(International Direct Dialing) is a service that allows a
    subscriber to make an international call without the assistance
    or intervention of an operator from any telephone terminal.
"installed lines"
refer to complete lines fully built-out to the distribution
    point and ready to be connected to subscribers.
"intelligent network" or "IN"
is a service-independent telecommunications network where the
    logic functions are taken out of the switch and placed in
    computer nodes distributed throughout the network. This provides
    the means to develop and control services more efficiently
    allowing new or advanced telephony services to be introduced
    quickly.
"ISDN"
(Integrated Services Digital Network) is a network that provides
    end-to-end digital connectivity and allows simultaneous
    transmission of voice, data and video and provides high-speed
    Internet connectivity.
"ITRB"
refers to the Indonesian Telecommunications Regulatory Body.
"Kbps"
(Kilobits per second) is a measure of speed for digital signal
    transmission expressed in thousands of bits per second.
"KSO"
(Kerjasama Operasi) or Joint Operating Scheme, is a unique type
    of Build, Operate and Transfer arrangement with a consortium of
    partners in which the consortium invests and operates TELKOM
    facilities in regional divisions. The consortium partners are
    owned by international operators and private domestic companies,
    or in cases where TELKOM has acquired the consortium partner, by
    TELKOM.
3
Table of Contents
"KSO Agreements"
refer to the agreements, as amended from time to time, governing
    the operation of the network in the relevant KSO region for the
    KSO Period.
"KSO Period"
refers to period covered by the KSO Agreement.
"KSO Unit"
refers to a regional division of TELKOM managed and
    operated — pursuant to the relevant KSO Agreement.
"leased line"
is a dedicated telecommunications transmissions line linking one
    fixed point to another, rented from an operator for exclusive
    use.
"lines in service"
refer to revenue-generating lines connected to subscribers,
    including payphones, but not including mobile cellular
    subscribers or lines used internally by TELKOM.
"local call"
is the call among subscribers in the same numbering area without
    any prefix number being required.
"local exchange capacity"
refers to the aggregate number of lines at a local exchange
    connected and available for connection to outside plant.
"MHz"
(Megahertz) is a unit of measure of frequency. 1 MHz is
    equal to one million cycles per second.
"microwave transmission"
is a transmission consisting of electromagnetic waves in the
    radio frequency spectrum above 890 million cycles per
    second and below 20 billion cycles per second.
"MoC"
(Ministry of Communication). See "MoCI".
"MoCI"
refers to the Ministry of Communication and Information, to
    which telecommunications regulatory responsibility was
    transferred from the MoC in February 2005.
"Modern License"
is an operational license, contemplated in the Telecommunication
    Law, which replaces the existing operational license for basic
    telecommunications services.
"MoF"
refers to the Ministry of Finance.
"MTR"
(Minimum TELKOM Revenues) is the specified minimum amount
    payable monthly by each KSO Unit to TELKOM under the KSO
    Agreements.
"NMT-450"
(Nordic Mobile Telephone) is a form of analog mobile cellular
    service primarily installed in vehicles.
"optical fiber"
refers to cables using optical fiber and laser technology
    whereby modulating light beams representing data are transmitted
    through thin filaments of glass.
"outside plant"
is the equipment and facilities used to connect subscriber
    premises to the local exchange.
"PBH" or "Revenue-Sharing Arrangement"
(Pola Bagi Hasil) is a type of Build, Operate and Transfer
    arrangement scheme between TELKOM and domestic private
    companies. Under this scheme the private company invests in the
    telecommunication facilities to be operated by TELKOM.
4
Table of Contents
"PPLT"
refers to Penyediaan dan Pengembangan Layanan Telekomunikasi or
    Provision and Development of Telecommunications Services program
    established by TELKOM to provide telecommunication
    infrastructure to certain regions where telecommunication
    services are not available.
"PSDN"
(Packet Switched Data Networks) is a network using a switch
    device and sending packets of data through the network to some
    remote location.
"PSTN"
(Public Switched Telephone Network) is a telephone network
    operated and maintained by TELKOM and the KSO Units for and on
    behalf of TELKOM.
"RSA"
refers to the Revenue Sharing Agreement.
"RUIM" or "RUIMcard"
(Removable User Identity Module) is a "smart" card
    designed to be inserted into a fixed wireless telephone that
    uniquely identifies a CDMA network subscription and that
    contains subscriber-related data such as phone numbers, service
    details and memory for storing messages.
"satellite transponder"
is the radio relay equipment embedded on a satellite that
    receives signals from earth and amplifies and transmits the
    signal back to earth.
"SIM" or "SIMcard"
(Subscriber Identity Module) is a "smart" card
    designed to be inserted into a mobile cellular telephone that
    uniquely identifies a GSM network subscription and that contains
    subscriber-related data such as phone numbers, service details
    and memory for storing messages.
"SMS"
Short Messaging Service, a technology allowing the exchange of
    text messages between mobile cellular phones and between fixed
    wireless phones.
"switch"
is a mechanical, electrical or electronic device that opens or
    closes circuits, completes or breaks an electrical path, or
    selects paths or circuits, used to route traffic in a
    telecommunications network.
"trunk exchange"
is a switch that has the function of connecting one telephony
    switch to another telephony switch, which can be either a local
    or trunk switch.
"USO"
(Universal Service Obligation) is the service obligation imposed
    by the Government on all providers of telecommunications
    services for the purpose of providing public services in
    Indonesia.
"VoIP"
(Voice over Internet Protocol) is a means of sending voice
    information using the Internet Protocol.
"VPN"
(Virtual Private Network) is a secure private network
    connection, built on top of publicly-accessible infrastructure,
    such as the Internet or the public telephone network. VPNs
    typically employ some combination of encryption, digital
    certificates, strong user authentication and access control to
    provide secur-
5
Table of Contents
ity to the traffic they carry. They usually provide connectivity
    to many machines behind a gateway or firewall.
"VSAT"
(Very Small Aperture Terminal) is a relatively small antenna,
    typically 1.5 to 3.0 meters in diameter, placed in the
    user's premises and used for two-way communications by
    satellite.
"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 e-mail, Web
    sites, financial information, on-line banking, information and
    entertainment (infotainment), games and micro payments.
"WLL"
(Wireless Local Loop) is a means of providing local loop (the
    physical connection from the subscriber's premises to the
    carrier's point of presence or POP) facility without wires,
    which allows carriers to provide local loop with approximately 1
    Gbps or more in aggregate bandwidth per coverage area. WLL is
    particularly effective in rocky or soggy terrain.
6
Table of Contents
FORWARD LOOKING STATEMENTS
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") and the Private Securities Litigation
Reform Act of 1995, with respect to the financial condition,
results of operations and business of Perusahaan Perseroan
(Persero) P.T. Telekomunikasi Indonesia Tbk.
("TELKOM" or the "Company") and its
subsidiaries and certain plans and objectives of the Company or
the Company and its subsidiaries, wherever applicable, 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 the
Company's operations, performance and financial condition.
Such statements can be generally identified 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 risk and uncertainty 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 differ materially from those expressed or
implied by these forward looking statements. Important
information regarding risks and uncertainty is set forth
elsewhere in this annual report, including in Item 3.
"Key Information — D. Risk Factors,"
Item 5. "Operating and Financial Review and
Prospects — E. Off-Balance Sheet Arrangements,"
Item 5. "Operating and Financial Review and
Prospects — F. Tabular Disclosure of Contractual
Obligations" and Item 11. "Quantitative and
Qualitative Disclosures About Market Risk".
CONVENTIONS
In this Annual Report, unless otherwise specified or the context
otherwise requires, all references to "Indonesia" are
references to the Republic of Indonesia and all references to
the "U.S." and "United States" are
references to the United States of America. All references to
the "Government" herein are references to the
government of the Republic of Indonesia. References herein to
"Rupiah" and "Rp." are to the lawful
currency of Indonesia and all references to "US
Dollars" or "US$" are to the lawful currency of
the United States of America. For convenience, unless otherwise
specified, certain Rupiah amounts have been translated into US
Dollar amounts, based on the prevailing exchange rate of
Rp.9,830 = US$1.00, being the middle market spot rate of
exchange for Rupiah against US Dollar quoted by Reuters on
December 31, 2005. Such translations should not be
construed as representations that the Rupiah or US Dollar
amounts referred to could have been, or could be, converted into
Rupiah or US Dollars, as the case may be, at that or any other
rate or at all. The average middle market spot rate of exchange
for Rupiah against US Dollar quoted by Bank Indonesia on
December 31, 2005 was Rp.9,830 to US$1.00. See Item 3.
"Key Information — A. Selected financial
data — Exchange Rate Information" for further
information regarding rates of exchange between Rupiah and US
Dollars.
7
Table of Contents
PART I
ITEM 1.
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not applicable.
ITEM 2.
OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable.
ITEM 3.
KEY INFORMATION
A.
Selected financial data
TELKOM's consolidated financial statements for the year
2001 were audited by KAP Hans Tuanakotta Mustofa & Halim
(formerly KAP Hans Tuanakotta & Mustofa), the member firm of
Deloitte Touche Tohmatsu in Indonesia ("Deloitte").
TELKOM's consolidated financial statements for the year
2002 have been audited by KAP Haryanto Sahari & Rekan
(formerly KAP Drs. Hadi Sutanto & Rekan), the member
firm of PricewaterhouseCoopers in Indonesia ("PwC").
TELKOM's consolidated financial statements for the years
2003, 2004 and 2005 have been audited by KAP Siddharta Siddharta
& Widjaja, the member firm of KPMG International in
Indonesia ("KPMG"). KPMG is a Swiss cooperative of
which all firms are members. See Item 5. "Operating
and Financial Review and Prospects — A. Operating
Results — Changes in Methods of Accounting under
Indonesian GAAP". All such consolidated financial
statements were prepared in accordance with Indonesian GAAP,
which differs in certain significant respects from U.S. GAAP.
See Item 5. "Operating and Financial Review and
Prospects — A. Operating Results —
Summary of Significant Differences between Indonesian GAAP and
U.S. GAAP" and Note 54 to the Company's
consolidated financial statements, which provide a description
of the significant differences between Indonesian GAAP and U.S.
GAAP and a reconciliation to the amount of U.S. GAAP net income
and stockholders' equity of TELKOM for and as of the end of
each of the periods indicated in the consolidated financial
statements.
For the year 2005, 9 companies were consolidated into
TELKOM's consolidated financial statements, namely: PT
AriaWest International ("AriaWest", 100% owned by
TELKOM), PT Multimedia Nusantara ("Metra", 100%), PT
Graha Sarana Duta ("GSD", 100%), PT Pramindo Ikat
Nusantara ("Pramindo", 100%), PT Indonusa
Telemedia ("Indonusa", 96%), PT Dayamitra
Telekomunikasi ("Dayamitra", 100%),
PT Telekomunikasi Selular ("Telkomsel", 65%), PT
Napsindo Primatel Internasional ("Napsindo", 60%) and
PT Infomedia Nusantara ("Infomedia", 51%). In addition
to those companies, for the years 2003 and 2004, TELKOM
consolidated the financial statements of PT Pro Infokom
Indonesia ("PII", 51% owned by TELKOM). In 2004,
TELKOM increased its ownership interest in Dayamitra from 90% to
100%. In 2005, TELKOM increased its ownership interest in
Indonusa from 90% to 96%. See Item 4, "Information on
the Company — C. Business and Organizational
Structure — Information on Subsidiaries and Associated
Companies" and Note 1c to TELKOM's consolidated
financial statements.
8
Table of Contents
The following tables set forth a summary of the financial
information of TELKOM as of and for the years specified. This
information should be read in conjunction with Item 5.
"Operating and Financial Review and Prospects" and is
qualified in its entirety by reference to TELKOM's
consolidated financial statements and the related notes thereto
included elsewhere in this Annual Report.
Year Ended December 31,
2004
2001
2002
2003
(As Restated)
(6)
2005
2005
(US$
(Rp. in billion, except for data relating to shares, dividends and ADS)
million,
except for
data relating
to shares,
dividends
and ADS)
(1)
Consolidated Income Statement Data
Indonesian GAAP
OPERATING REVENUES
Telephone
Fixed lines
Local and domestic long-distance usage
5,226
5,448
6,562
7,439
7,223
735
Monthly subscription charges
998
1,475
1,949
2,935
3,290
335
Installation charges
98
130
223
201
197
20
Others
93
211
163
70
71
7
Total fixed lines revenues
6,415
7,264
8,897
10,645
10,781
1,097
Cellular
Air time charges
3,988
5,454
7,678
9,826
13,666
1,390
Monthly subscription charges
581
593
581
448
384
39
Features
10
8
6
91
457
46
Connection fee charges
129
172
194
56
64
7
Total cellular revenues
4,708
6,227
8,459
10,421
14,571
1,482
Total telephone revenues
11,123
13,491
17,356
21,066
25,352
2,579
Joint Operation Schemes
Minimum TELKOM Revenues (MTR)
1,474
1,320
900
296
269
27
Share in Distributable KSO Revenues (DKSOR)
733
801
583
350
319
33
Amortization of unearned initial investor payments
13
7
3
11
1
0
Total revenue under Joint Operation Schemes
2,220
2,128
1,486
657
589
60
Interconnection
1,424
2,831
4,162
6,188
7,742
788
Network
415
316
518
654
587
59
Data and Internet
673
1,552
3,109
4,809
6,934
705
Revenue-Sharing Arrangements
264
264
258
281
302
31
Other telecommunications services
165
221
227
293
301
31
Total Operating Revenues
16,284
20,803
27,116
33,948
41,807
4,253
9
Table of Contents
Year Ended December 31,
2004
2001
2002
2003
(As Restated)
(6)
2005
2005
(US$
(Rp. in billion, except for data relating to shares, dividends and ADS)
million,
except for
data relating
to shares,
dividends
and ADS)
(1)
OPERATING EXPENSES
Personnel
2,281
4,388
4,440
4,910
6,563
668
Depreciation
2,870
3,474
4,779
6,438
7,571
770
Operations, maintenance and telecommunication services
2,150
2,290
3,339
4,530
5,916
602
General and administrative
1,343
1,146
2,079
2,600
2,764
281
Marketing
220
375
503
882
1,126
114
Write-down of assets
—
—
—
—
617
63
Loss on procurement commitments
—
—
—
—
79
8
Total Operating Expenses
8,864
11,673
15,140
19,360
24,636
2,506
Operating Income
7,420
9,130
11,976
14,588
17,171
1,747
Other income (expenses)
Gain on sale of long-term investment in Telkomsel
—
3,196
—
—
—
—
Interest expense
(1,330
)
(1,583
)
(1,383
)
(1,270
)
(1,177
)
(120
)
Interest income
572
480
366
318
345
35
Gain (loss) on foreign exchange — net
(379
)
557
126
(1,221
)
(517
)
(53
)
Equity in net income (loss) of associated companies
(86
)
5
3
3
11
1
Others — net
353
(36
)
364
331
409
42
Other Income (Expenses) — net
(870
)
2,619
(524
)
(1,839
)
(929
)
(95
)
Income Before Tax
6,550
11,749
11,452
12,749
16,242
1,652
Tax expense
(2,007
)
(2,899
)
(3,861
)
(4,178
)
(5,184
)
(527
)
Income before minority interest in net income of subsidiaries
4,543
8,850
7,591
8,571
11,058
1,125
Minority interest in net income of subsidiaries, net
(475
)
(810
)
(1,504
)
(1,956
)
(3,064
)
(312
)
Net Income
4,068
8,040
6,087
6,615
7,994
813
Weighted average shares outstanding (millions)
20,160
20,160
20,160
20,160
20,160
Net income per share
201.81
398.80
301.95
328.10
396.51
0.04
Net income per ADS
8,072.20
15,951.80
12,077.83
13,124.14
15,860.25
1.61
Dividends declared per
    share
(2)
44.08
105.41
165.58
158.09
144.90
0.01
U.S.
    GAAP
(3)
Net income
4,298
8,587
5,791
6,468
7,840
798
Net income per share
213.20
425.96
287.23
320.86
388.89
0.04
Net income per ADS
8,528.17
17,038.21
11,489.40
12,834.47
15,555.74
1.58
10
Table of Contents
As of December 31,
2004
2001
2002
2003
(As Restated)
(6)
2005
2005
(US$ million)
(1)
(Rp. in billion)
Consolidated Balance Sheet Data
Indonesian GAAP
Total assets
33,036
44,307
50,283
56,179
62,171
6,325
Current
    liabilities
(4)
9,543
9,708
11,170
11,677
13,513
1,375
Other liabilities
3,447
5,383
6,258
8,222
7,728
786
Long-term debts
9,730
12,006
11,834
13,214
11,332
1,153
Total liabilities
22,720
27,097
29,262
33,113
32,573
3,314
Minority interest
1,235
2,596
3,708
4,938
6,305
641
Capital
    stock
(5)
5,040
5,040
5,040
5,040
5,040
513
Total stockholders' equity
9,081
14,614
17,313
18,128
23,292
2,370
U.S.
    GAAP
(3)
Total assets
32,449
44,623
51,347
56,702
63,481
6,440
Total stockholders' equity
7,766
13,911
16,285
19,571
24,568
2,499
(1)
The translations of Rupiah amounts into US Dollars are included
    solely for the convenience of the readers and have been made
    using the average of the market buy and sell rates of Rp.9,830
    to US$1 published by Reuters on December 31, 2005. The
    convenience translations should not be construed as
    representations that the Rupiah amounts have been, could have
    been, or can in the future be, converted into US Dollars at this
    or any other rate of exchange.
(2)
Dividends declared per share in 2001, 2002 and 2003 represent
    dividends per share after adjusting for the stock split that was
    effected in 2004. Dividends declared per share in 2004 comprised
    cash dividends for 2003 of Rp.150.98 per share and interim cash
    dividends declared in December 2004 of Rp.7.11 per share.
    Dividends declared per share in 2005 represent cash dividends
    for 2004 of Rp.152.01 per share deducted by interim cash
    dividends declared in 2004 of Rp.7.11 per share.
(3)
U.S. GAAP amounts reflect adjustments resulting from differences
    in the accounting treatment of termination benefits, foreign
    exchange differences capitalized to property under construction,
    interest capitalized on property under construction,
    revenue-sharing arrangements, employee benefit plans, equity in
    net income or loss of associated companies, land rights, revenue
    recognition, goodwill, capital leases, acquisition of Dayamitra,
    reversal of difference due to change of equity in associated
    companies, asset retirement obligations, and deferred income
    taxes. See Item 5. "Operating and Financial Review and
    Prospects — A. Operating Results —
    Summary of Significant Differences between Indonesian GAAP and
    U.S. GAAP" and Note 54 to the consolidated financial
    statements.
(4)
Includes current maturities of long-term debts.
(5)
As of December 31, 2004 and 2005, Issued and Paid-Up
    Capital Stock consists of one Series A Dwiwarna share
    having a par value of Rp.250 and 20,159,999,279 Series B
    shares having a par value of Rp.250 from an authorized capital
    stock comprising one Series A Dwiwarna share and
    79,999,999,999 Series B shares.
(6)
The 2004 consolidated financial statements have been restated to
    reflect the adoption of PSAK No. 24 (Revised 2004),
    "Employee Benefits" ("PSAK 24R"). See
    Note 4a to the consolidated financial statements. See
    Item 5. "Operating and Financial Review and
    Prospects — A. Operating Results — Changes
    in Methods of Accounting under Indonesian GAAP".
11
Table of Contents
Exchange Rate Information
The following table shows the exchange rate of Rupiah to US
Dollar based on the middle exchange rates at the end of each
month for the periods indicated. The Rupiah middle exchange rate
is calculated based on Bank Indonesia buying and selling rates.
No representations are made that the Rupiah or US Dollar
amounts referred to herein could have been or could be converted
into US Dollar or Rupiah, as the case may be, at any
particular rate or at all.
Year
At period end
Average
(1)
High
(2)
Low
(2)
(Rp. Per US$1.00)
2001
10,400
10,266
11,675
8,865
First Quarter
10,400
9,895
10,400
9,450
Second Quarter
11,440
11,391
11,440
11,058
Third Quarter
9,675
9,355
9,675
10,350
Fourth Quarter
10,400
10,422
10,435
10,400
2002
8,940
9,316
10,473
8,460
First Quarter
9,655
10,192
10,473
9,542
Second Quarter
8,730
9,109
9,775
8,460
Third Quarter
9,015
8,949
9,218
8,695
Fourth Quarter
8,940
9,058
9,326
8,815
2003
8,465
8,573
9,120
8,165
First Quarter
8,919
8,907
9,120
8,836
Second Quarter
8,285
8,488
8,906
8,165
Third Quarter
8,389
8,427
8,665
8,166
Fourth Quarter
8,465
8,471
8,583
8,365
2004
9,290
8,935
9,430
8,323
First Quarter
8,587
8,465
8,465
8,323
Second Quarter
9,415
8,992
9,430
8,574
Third Quarter
9,170
9,151
9,389
8,825
Fourth Quarter
9,290
9,126
9,355
8,960
2005
9,830
9,711
10,800
9,133
First Quarter
9,480
9,276
9,520
9,133
Second Quarter
9,713
9,548
9,755
9,435
Third Quarter
10,310
10,006
10,800
9,735
Fourth Quarter
9,830
9,992
10,300
9,735
2006
January
9,395
9,493
9,795
9,355
February
9,230
9,253
9,335
9,200
March
9,075
9,172
9,370
9,030
April
8,775
8,937
9,045
8,775
May
9,220
8,985
9,320
8,720
(1)
The average of the middle exchange rate announced by Bank
    Indonesia applicable for the period.
(2)
The high and low amounts are determined based upon the daily
    middle exchange rate announced by Bank Indonesia during the
    applicable period.
Source: Bank Indonesia
The exchange rates used for translation of monetary assets and
liabilities denominated in foreign currencies are the buy and
sell rates published by Reuters in 2003, 2004 and 2005. The
Reuters buy and sell rates, applied respectively to monetary
assets and liabilities, were Rp.8,430 and Rp.8,450 to US$1 as
12
Table of Contents
of December 31, 2003, Rp.9,280 and Rp.9,300 to US$1 as of
December 31, 2004 and Rp.9,825 and Rp.9,835 to US$1 as of
December 31, 2005. The Company does not guarantee that
assets and liabilities denominated in foreign currencies can be
converted into Indonesian Rupiah at the rates of exchange as of
December 31, 2005.
The consolidated financial statements are stated in Rupiah. The
translations of Rupiah amounts into US Dollars are included
solely for the convenience of the readers and have been made
using the average of the market buy and sell rates of Rp.9,830
to US$1 published by Reuters on December 31, 2005. The
convenience translations should not be construed as
representations that the Rupiah amounts have been, could have
been, or can in the future be, converted into US Dollars at this
or any other rate of exchange.
B.     Capitalization and
Indebtedness
Not applicable.
C.     Reason for the Offer and Use
of Proceeds
Not applicable.
D.     Risk Factors
TELKOM had a number of material weaknesses in its internal
    control over financial reporting as of December 31, 2003,
    2004 and 2005 and TELKOM concluded that as of December 31,
    2005 its disclosure controls were not effective, which could
    cause investors to lose confidence in its reported financial
    results and have an adverse effect on the trading price of its
    securities.
Reportable conditions (as defined under standards established by
the American Institute of Certified Public Accountants) relating
to TELKOM's internal control over financial reporting (as
defined in
Rules
13a-15(f)
and
15d-15(f)
of the
Exchange Act) were identified and communicated by KPMG in
connection with its audits of the consolidated financial
statements as of and for the years ended December 31, 2003,
2004 and 2005. As part of its communications, KPMG informed the
Audit Committee that it had identified "reportable
conditions" each of which constituted a "material
weakness" (as each such term is defined under
standards established by the American Institute of Certified
Public Accountants) in TELKOM's internal control over
financial reporting. TELKOM's principal executive officer
and principal financial officer concluded that because of the
"material weaknesses" identified, TELKOM's
disclosure controls and procedures as of December 31, 2003,
2004, and 2005 were not effective to ensure that information
required to be disclosed in the reports that TELKOM files and
submits under the Exchange Act is recorded, processed,
summarized and reported as and when required, and is accumulated
and communicated to TELKOM's management, including
TELKOM's principal executive officer and principal
financial officer, to allow timely decisions regarding required
disclosure. See Item 15. "Control and Procedures".
Since November 2003, TELKOM has been working to improve its
internal control over financial reporting, including those
needed to enable it to comply with Section 404 of the
Sarbanes-Oxley Act of 2002, as well as its disclosure controls
and procedures, and has taken a number of steps to address these
issues. See Item 15. "Control and Procedures".
TELKOM cannot provide any assurance that the steps that it has
taken and is continuing to take will result in all material
weaknesses being eliminated. TELKOM expects that its internal
controls over financial reporting and disclosure controls and
procedures will continue to evolve in the future. Any control
system, regardless of how well designed, operated and evaluated,
can provide only reasonable, not absolute, assurance that its
objectives will be met. Any failure to implement required new or
improved controls, or difficulties encountered in their
implementation, could adversely affect TELKOM's ability to
report financial results on a timely and accurate basis or cause
TELKOM to fail to meet its reporting obligations. Inadequate
internal controls over financial reporting or disclosure
controls and procedures could also cause investors to lose
13
Table of Contents
confidence in TELKOM's reported financial information,
which could have an adverse effect on the trading price of
TELKOM's securities.
Risks Relating to Indonesia
Current political and social events in Indonesia may
    adversely impact business activity in Indonesia.
Since 1998, Indonesia has experienced a process of democratic
change, resulting in political and social events that have
highlighted the unpredictable nature of Indonesia's
changing political landscape. These events have resulted in
political instability, as well as general social and civil
unrest on a number of occasions in the past few years. For
example, in June 2001, demonstrations and strikes affected at
least 19 cities after the Government mandated a 30%
increase in fuel prices. Similar demonstrations occurred in
January 2003, when the Government again tried to increase fuel
prices, as well as electricity and telephone charges. In both
instances, the Government was forced to drop or substantially
reduce such proposed increases. In October 2005 following
substantial increases in the market price of crude oil, the
Government raised fuel prices by approximately 80%, which also
led to numerous demonstrations and strikes.
Actions by separatist movements and clashes between religious
and ethnic groups have also resulted in social and civil unrest
in parts of Indonesia. In the province of Papua (formerly Irian
Jaya), there have been numerous clashes between supporters of
separatist movements and the Indonesian military. In the
provinces of Maluku and Central Sulawesi (Poso), clashes between
religious groups have resulted in thousands of casualties and
displaced persons in recent years. The Government has attempted
to resolve problems in these troubled regions with limited
success.
Political and related social developments in Indonesia have been
unpredictable in the past and there can be no assurance that
social and civil disturbances will not occur in the future and
on a wider scale, or that any such disturbances will not,
directly or indirectly, have a material adverse effect on us or
on an investment in the ADSs or Common Stock. Further, these
social and civil disturbances could continue to have a material
adverse effect on investment and confidence in and the
performance of the Indonesian economy and in turn our business.
Terrorist activities in Indonesia could destabilize
    Indonesia, which could adversely affect TELKOM's
    business.
Bombings have occurred in recent years, at government buildings,
foreign diplomatic facilities, night clubs and other locations,
including the Jakarta Stock Exchange building, the Police
Function Building in Jakarta, the departure lounge of
Jakarta's Soekarno-Hatta International Airport, the
parliament building in Jakarta and a shopping mall in Jakarta. A
bombing campaign struck religious buildings throughout Indonesia
in 2000. On October 12, 2002, over 200 people were killed
in a bombing at a tourist area in Bali. This terrorist attack
resulted in a significant decline in international tourism. On
August 5, 2003 a bomb exploded at the J.W. Marriott
Hotel in Jakarta killing at least 12 people and injuring
more than 150 people. On September 9, 2004, a bomb exploded
outside the Australian Embassy in Jakarta's central
business district, killing at least nine people and injuring
over 180 people. On May 28, 2005, two bombs exploded in a
crowded market in Tentena in central Indonesia, killing at least
20 people and injuring at least 40. In October 2005,
multiple bombs exploded in two locations in Bali, killing
22 people and injuring at least 50. Indonesian and United
States government officials have indicated that some of these
bombings may be the responsibility of Jemaah Islamiya, a
Southeast Asian-based terrorist network allegedly linked to the
international terrorist organization,
Al-Qaeda.
In May 2005,
the United States also closed its embassy in Indonesia for a few
days following an unspecified threat.
There can be no assurance that further terrorist acts will not
occur in the future. A number of governments have from time to
time issued warnings to their citizens in relation to a
perceived increase in the possibility of terrorist activities in
Indonesia, targeting foreign, particularly United States,
14
Table of Contents
interests. Such acts could destabilize Indonesia and increase
internal divisions within the Government as it considers
responses to such instability and unrest. Violent acts arising
from and leading to instability and unrest have in the past had,
and could continue to have, a material adverse effect on
investment and confidence in, and the performance of, the
Indonesian economy and our business.
Declines or volatility in Indonesia's currency
    exchange rates can have a material adverse impact on business
    activity in Indonesia.
The Government's exchange rate policies and any future
changes in the value of the Rupiah against the US Dollar or
other currencies could adversely affect TELKOM's financial
condition and results of operations. On August 14, 1997,
Bank Indonesia permitted the exchange rate for the Rupiah to
float without announcing a level at which it would intervene.
From August 1997 to mid-1998, the month-end value of the Rupiah
relative to the US Dollar declined from approximately
Rp.2,600 per US Dollar to as low as approximately Rp.15,000
per US Dollar. There can be no assurance that: (a) the
Rupiah will not be subject to continued depreciation or
volatility; (b) the current exchange rate policy will
remain the same; (c) the Government will act when necessary
to stabilize, maintain or increase the value of the Rupiah, or
that any such action, if taken, will be successful.
Continued depreciation or volatility of the Rupiah against the
US Dollar or other currencies could adversely affect general
economic conditions in Indonesia. Rupiah depreciation would also
drive up the Rupiah cost of TELKOM's capital expenditure
program since most of the equipment to be used in the expansion
of TELKOM's network capacity is sourced off-shore and
priced in foreign currencies, mainly in US Dollars and Euros,
while almost all of TELKOM's revenues are in Rupiah.
Changes in the current exchange rate policy may result in
significantly higher domestic interest rates, liquidity
shortages, capital or exchange controls or the withholding of
additional financial assistance by multilateral institutions.
The foregoing consequences, if they occur, could have a material
adverse effect on TELKOM's business. As of
December 31, 2005, the average exchange rate of Rupiah to
US Dollar, based on the Reuters middle buy and sell rates, was
Rp.9,830 per US Dollar.
Fluctuations in the exchange rate between the Rupiah and the US
Dollar could adversely affect, among other things, the Rupiah
cost of Telkom's network equipment purchases, the dollar
value of any amounts a holder or beneficial owner of ADSs will
receive in the event we issue dividends, the US Dollar
value of the proceeds a holder or beneficial owner would receive
upon the sale in Indonesia of shares of the Common Stock and the
secondary market price of the ADSs.
Indonesia ended its Extended Financing Facility with the
    International Monetary Fund and the consequences thereof are
    unpredictable.
In December 2003, the Government ended its Extended Financing
Facility ("EFF") program with the International
Monetary Fund ("IMF") and began to drawdown on its
gross foreign reserves, as well as on its outstanding balances
at the IMF. Considering the Government's current fiscal
deficit and modest foreign exchange reserves, the end of the EFF
has raised concerns about the ability of the Government to fund
subsidies for staples such as food and fuel, which, in turn,
could have extremely serious political and social consequences.
The end of the EFF also brings with it the end of the
Government's ability to reschedule Indonesia's Paris
Club bilateral foreign loans. Other consequences of ending the
EFF are not known at this stage. While the Government has sought
to address these concerns by issuing a White Paper setting forth
its fiscal strategy and policy objectives for 2004, there can be
no assurance that the Government's strategy will be
successful or that its objectives will be met in full or in part.
Indonesia no longer has access to the Paris Club but
    continues to rely on loans from the World Bank and the Asian
    Development Bank.
Since the financial crisis of 1997, the members of the Paris
Club have been an important source of funding for the
Government. The Paris Club is an informal voluntary group of
19 creditor countries
15
Table of Contents
that coordinates solutions for payment difficulties experienced
by debtor nations. The last debt rescheduling took place in
April 2002 when the Paris Club rescheduled approximately
US$5.4 billion of principal and interest due from the
Government between April 2002 and December 2003. This was done
by extending the period within which the amounts could be repaid.
In addition to the Paris Club, the World Bank and the Asian
Development Bank have been major sources of financing.
Disbursements from these sources have been slower than expected
in recent years due to the slow pace of institutional reforms in
Indonesia and concerns regarding the Government's
decentralization plan. As of the date of this Annual Report,
regional governments in Indonesia are not allowed to borrow in
foreign currency and any change to Indonesian law allowing them
to borrow in foreign currency could be a source of potential
debt service problems. The World Bank and Asian Development Bank
lending programs are subject to regular compliance reviews and
can be reduced or withdrawn at any time. The impact of any
elimination of lending cannot be assessed but is likely to be
materially adverse.
Indonesia's high level of sovereign debts may result
    in it being unable to service its debt obligations when they
    become due.
Indonesia's high level of sovereign debts has forced it to
negotiate with its major creditors several times since the 1997
financial crisis. For example, the Government held a round of
talks with the Paris Club donor countries and the IMF in April
2002 to discuss the rescheduling of Indonesia's debt due in
2002. In these talks, the Government sought to restructure not
just debt principal, but interest payments as well, totaling
US$2.6 billion. The meeting resulted in the rescheduling of
debt principal payments only, but no assurance can be given as
to Indonesia's capacity to meet these rescheduled debt
payments. While no further rescheduling has taken place, future
decisions to renegotiate Indonesia's existing sovereign
indebtedness cannot be ruled out. Such decisions may affect
Indonesia's sovereign credit rating and could have a
material adverse impact on investor confidence in Indonesia.
Indonesia's sovereign debt rating continues to be
    reviewed and revised by international rating agencies.
Beginning in 1997, certain recognized statistical rating
organizations, including Moody's Investors Service, Inc.
("Moody's") and Standard & Poor's Rating
Services ("S&P"), downgraded Indonesia's
sovereign rating and the credit ratings of various credit
instruments of the Government and a large number of Indonesian
banks and other companies. "The Government's long-term
foreign currency debt was rated B1 by Moody's as of
May 19, 2006, rated BB- by Fitch Ratings
("Fitch") as of March 3, 2006, and rated B+ by
S&P as of February 9, 2006." These ratings reflect
an assessment of the Government's overall ability to pay
its obligations and its willingness to meet its financial
commitments as they come due. No assurance can be given that
Moody's, S&P, Fitch or any other international credit
rating agency will not downgrade the credit ratings of Indonesia
or Indonesian companies. Any such downgrade would have an
adverse impact on liquidity in the Indonesian financial markets
and the ability of Indonesian companies, including TELKOM, to
raise additional financing and the interest rates at which such
additional financing is available.
Indonesia is vulnerable to natural disasters and other
    events beyond TELKOM's control, which could severely
    disrupt the normal operation of TELKOM's business and
    adversely affect TELKOM's operating results.
TELKOM's existing operations are primarily in Indonesia,
parts of which are vulnerable to natural disasters. Disruption
of operations for any reason, including earthquakes, tsunamis,
floods, volcanic eruptions, droughts, power outages or other
events beyond TELKOM's control, could cause disruptions to
operations and damage to equipment which would adversely affect
TELKOM's financial condition and results of operations.
16
Table of Contents
In 2002, a major flood in Jakarta affected TELKOM's
operations in Jakarta, where a significant portion of its
revenues are derived. In December 2004, northern parts of the
Indonesian island of Sumatra, and particularly the province of
Aceh, suffered severe damage following a massive earthquake
estimated to be of magnitude 9.3 on the Richter scale and a
series of tsunami waves on December 26, 2004. The tsunami
and the earthquake caused approximately Rp.54.9 billion
(US$5.6 million) of damages to TELKOM's assets and
equipment in the Aceh province, including 22 out of 44 switching
facilities and transmission facilities and disrupted over 35,000
telephone lines out of approximately 99,000 lines.
On March 28, 2005, a major earthquake estimated to be of
magnitude 8.7 on the Richter scale struck off the western coast
of Sumatra. Scientists and seismic experts believe that rather
than relieving stresses along the Sunda fault, located to the
south of Sumatra, the seismic stresses along the Sunda fault
continue unabated or have increased, and warned of the
possibility of further earthquakes and tsunamis. The increased
seismic activity has also coincided with volcanoes in Sumatra
and Java, some of which have started to spew ashes and lava in
the first quarter of 2006. Most recently, Mount Merapi in
Central Java began erupting in May 2006, and experts
believe a large eruption is imminent.
While TELKOM maintains several insurance policies relating to
TELKOM's assets which covered the losses resulting from
tsunami damage, it does not maintain business interruption
insurance, and there can be no assurance that the insurance
coverage will be sufficient to protect TELKOM from potential
losses resulting from natural disasters and other events beyond
its control. In addition, there can be no assurance that the
premium payable for these insurance policies upon renewal will
not increase substantially, which may adversely affect
TELKOM's financial condition and results of operations.
Risks relating to TELKOM and its subsidiaries
TELKOM's expansion plans may strain key resources and
    thereby adversely affect its business, financial condition and
    prospects.
To remain competitive and position TELKOM in gaining market
share, TELKOM has identified its primary business objective as
becoming a full service and network provider. To achieve this
objective, TELKOM has determined that it should increase its
focus on multimedia and other types of services in addition to
its present core business concentration on local, domestic
long-distance and mobile cellular services. The implementation
of measures designed to achieve these objectives could strain
TELKOM's managerial, financial and other resources, which
could adversely affect TELKOM's business, financial
condition and prospects.
TELKOM's controlling stockholder's interests may
    differ from those of TELKOM's other stockholders.
The Government has an aggregate interest of approximately 51.19%
of the issued and outstanding shares of TELKOM and has control
of TELKOM and the ability to determine the outcome of
substantially all actions requiring the approval of TELKOM
shareholders. The Government is also the holder of the Dwiwarna
share of TELKOM, which has special voting rights and veto rights
over certain matters, including the election and removal of the
Directors and Commissioners of TELKOM. Through the Ministry of
Communication and Information ("MoCI"), the Government
also exercises regulatory power over the Indonesian
telecommunications industry. There might be situations where the
objectives of the Government, as TELKOM's regulator and its
controlling shareholder, conflict with TELKOM's business
goals. In addition, there can be no assurance that the
Government will not direct opportunities to other
telecommunications service providers in which it holds an
interest.
Certain systems failures could, if they occur, adversely
    affect TELKOM's results of operations.
TELKOM's telecommunications services are carried through
its fixed line, cellular and data networks. All types of
networks use last mile access, regional metro junction and long
haul transmis-
17
Table of Contents
sion networks as a common network resource. For last mile
access, TELKOM operates Copper Access Network, Optical Access
Network and Wireless Access Network. The regional metro junction
and long haul transmission network operated by TELKOM consists
of optical fiber cable, microwave, submarine cable and satellite
transmission links.
Any failure of this integrated network, TELKOM's servers,
or any link in the transmission chain that results in an
interruption in TELKOM's operations or the provision of any
service, whether from operational disruption, natural disaster
or otherwise, could damage TELKOM's ability to attract and
retain subscribers and adversely affect its results of
operations, financial condition and prospects.
Regulators and other telecommunications operators may
    challenge TELKOM's ability to apply PSTN tariffs to its new
    CDMA-based fixed wireless phone service, which is marketed under
    the brand name TELKOMFlexi.
In December 2002, TELKOM introduced new CDMA-based fixed
wireless phone service, which is marketed under the brand name
TELKOMFlexi for both fixed and portable handsets. As of
December 31, 2005, this service was offered in
231 cities. CDMA-based fixed wireless technology enables
rapid development of telephone networks and reduces the capital
expenditures per line by obviating the need for the installation
of underground cables. TELKOMFlexi offers customers the ability
to use a wireless handset with limited mobility (within the same
area code). Customers generally have all features offered by
cellular services except roaming to other area codes and
internationally. Postpaid TELKOMFlexi customers are charged
tariffs that are similar to PSTN tariff rates for this service
while prepaid customers are charged tariffs slightly higher than
postpaid rates but with no monthly fees. In each case, both
TELKOMFlexi postpaid and prepaid tariffs are substantially lower
than tariffs for cellular services. Telecommunications
regulators, cellular operators and cellular trade associations
have sought and may in the future seek to impose limitations on
TELKOM's ability to provide fixed wireless services at PSTN
rates. If any such limitations are imposed, TELKOM could lose
part or all of the benefit of its investment in the network that
supports the TELKOMFlexi service. TELKOM may also be subject to
disputes with its regulators or competitors.
TELKOM may need to raise funds required for certain future
    expenditure requirements and the terms of any debt financing may
    subject TELKOM to restrictive covenants.
TELKOM may need to raise significant additional funds in order
to support its growth, undertake acquisitions, meet unexpected
contingencies and develop new or enhanced services and products.
It may also need to respond to competitive pressures, acquire
complementary businesses or technologies or take advantage of
opportunities. TELKOM cannot be certain that such additional
funding, if needed, will be available on acceptable terms, if at
all. Furthermore, any debt financing, if available, may involve
restrictive covenants, which may limit TELKOM's operating
flexibility with respect to certain business matters. If
adequate funds are not available on acceptable terms, TELKOM may
be unable to develop or enhance its services. It may also be
unable to take advantage of future opportunities or respond to
competitive pressures, any of which could have a material
adverse effect on TELKOM's business, results of operations
and financial condition.
TELKOM's ability to develop adequate financing
    arrangements is critical to support its capital
    expenditures.
The telecommunications industry is capital intensive in nature.
In order to satisfy customer demand and provide service and
technology that is comparable to and compatible with, other
telecommunications service providers, TELKOM must continue to
expand and modernize its network, which involves substantial
capital investment. TELKOM relies heavily on its internal funds,
two-step loans obtained through the Government and third-party
financing, including vendor financing to support the development
of its fixed line network. If TELKOM does not have sufficient
internal funds or is unable to obtain adequate vendor or other
third-party financing for its planned capital expenditures or
otherwise fund such expenditures through other financing
arrangements, TELKOM
18
Table of Contents
may have to forego, delay or postpone certain of its planned
capital expenditures. This may prevent TELKOM from being able to
expand sufficiently and upgrade its network, which could
adversely affect its revenues and growth.
Employee unions may negatively affect TELKOM's
    business.
Laws permitting the formation of labor unions, combined with
weak economic conditions, have resulted and may continue to
result, in labor unrest and activism in Indonesia. On
February 25, 2003, the Indonesian Parliament passed a new
employment law, Law No. 13 of 2003 (the "Employment
Law"), which took effect on March 25, 2003. The
Employment Law provides more protection for the employee, such
as requiring a ruling from the Industrial Relations Court for
termination of an employee in certain situations, and covers the
increment of severance amount, service and compensation payment
payable to terminated employees as well as to allow employees to
unionize without intervention from employers. The Employment Law
and new implementation regulations that may be issued thereunder
may substantially affect labor relations in Indonesia. In May
2000, TELKOM employees formed a union named "Serikat
Karyawan TELKOM" or "SEKAR". Membership with
SEKAR is not compulsory. TELKOM believes that its relations with
SEKAR are good. However, there can be no assurance that the
activities of employee unions will not materially and adversely
affect TELKOM's business, financial condition and prospects.
New technologies may adversely affect TELKOM's
    ability to remain competitive.
The telecommunications industry is characterized by rapid and
significant changes in technology. TELKOM may face increasing
competition from technologies being developed or that may be
developed in the future. New technologies, services or standards
could require significant changes to its business model, the
development of new products or the provision of additional
services. In addition, TELKOM may need to substantially upgrade
to a next generation network to implement convergent
technologies and upgrade its billing and credit control systems
to accommodate growth in its business and the adoption of new
technologies and services. New products and services may be
expensive to develop and may result in the introduction of
additional competitors into the marketplace. TELKOM cannot
accurately predict how emerging and future technological changes
will affect its operations or the competitiveness of its
services. Similarly, TELKOM cannot provide any assurances that
the technologies it adopts will not soon thereafter become
obsolete or subject to intense competition from new technologies
in the future. If TELKOM is unable to keep pace with rapid
technological changes, its business, financial condition and
results of operations could be materially and adversely affected.
TELKOM operates in a legal and regulatory environment that
    is undergoing significant reforms and such reforms may adversely
    affect TELKOM's business.
There are a number of uncertainties in the current regulatory
environment for the Indonesian telecommunications industry. In
particular, the Telecommunications Law No. 36 of 1999
("Telecommunications Law") provides key guidelines for
industry reforms, including industry liberalization,
facilitation of new entrants and changes to the industry's
competition structure. The Telecommunications Law only outlines
the framework and substantive principles for the liberalization
of the telecommunications industry. TELKOM considers that there
is uncertainty in the Indonesian regulatory environment with
regard to, among other things:
•
Interconnection:
TELKOM, including its subsidiaries such
    as Telkomsel, is obligated to allow other operators to
    interconnect their networks with those of TELKOM subject to
    entering into interconnection agreements with those other
    operators. As of the date of this Annual Report, TELKOM's
    ability to negotiate such interconnection agreements is limited
    by the provisions set forth in various ministerial decrees
    governing interconnection rates. On February 8, 2006, the
    MoCI issued Regulation No. 8/2006, which mandates a
    new cost-based interconnection tariff scheme for all
    telecommunications network and services operators. Under the new
    scheme, the operator of the network on which calls terminate
    would determine the interconnection charge to
19
Table of Contents
be received by it based on a formula to be mandated by the
    Government, which would be intended to have the effect of
    requiring that operators charge for calls based on the costs of
    carrying such calls. Such calculated interconnection charges
    must be presented in a Reference Interconnection Offer
    ("RIO") and reported to the ITRB. TELKOM submitted its
    RIO in April 2006. ITRB is expected to complete its review of
    RIOs submitted by large network operators, including TELKOM, by
    July 2006. The new interconnection tariff scheme will become
    effective on January 1, 2007. For further information on
    the interconnection scheme, see Item 4. "Information
    on the Company — B. Business Overview —
    Regulations — Interconnection". TELKOM can give
    no assurance regarding the impact, if any, of such adjustment on
    the interconnection revenues and costs on TELKOM and there can
    be no assurance that such impact would not have a material
    adverse effect on TELKOM's business, financial condition,
    results of operations and prospects.
•
Licenses:
TELKOM's separate licenses to provide
    fixed line services, DLD services and IDD services were replaced
    and combined into a single license issued on May 13, 2004.
    TELKOM also has a multimedia license that includes services such
    as Internet service provider, data communication and VoIP. The
    Government, with due regard to prevailing laws and regulations,
    may amend the terms of TELKOM's licenses and business
    authority at its discretion. It may also impose certain
    mandatory obligations on the license holders. See Item 4.
    "Information on the Company — B. Business
    Overview — Regulations — Modern
    License". Any breach of the terms and conditions of its
    licenses or business authority or failure to comply with
    applicable regulations may result in such licenses or business
    authority being revoked. Any revocation or unfavorable amendment
    of the licenses or business authority, or any failure to renew
    them on comparable terms, could have a materially adverse effect
    on TELKOM's business, financial condition, results of
    operations and prospects.
•
Tariffs:
In 1995, the Government implemented regulations
    providing a formula to establish the tariff adjustment for
    domestic fixed line telecommunications services. However, such
    annual tariff review adjustment has not been applied on a
    consistent basis. In addition, amendments to the current price
    cap policy allow operators to calculate yearly tariff
    adjustments beginning January 1, 2002, based on a formula
    to be stipulated by the Government. On January 29, 2002,
    the Government issued a letter to TELKOM stipulating a 45.49%
    increase in domestic fixed line telephone tariffs to be
    implemented over three years. For the year 2002 a tariff
    increase, with a weighted average of 15% increase, was
    implemented. In January 2003, the Government postponed the
    second tariff increase due to numerous public protests. However,
    on March 30, 2004, the Government, as recommended by the
    ITRB, announced that it would allow operators to adjust their
    tariffs, with the resulting weighted average of tariffs
    increasing by 9%. There can be no assurance that the Government
    will implement further tariff increases or that tariffs will
    keep pace with costs over time. Any failure of the Government to
    implement regular tariff increases could have a material adverse
    effect on our business, financial condition and results of
    operations.
•
Migration of Frequencies for 3G Service Providers:
On
    August 31, 2005, the MoCI issued a press release which
    announced that in order to conform with the international
    standards of the industry and as recommended by the
    International Telecommunications Union —
    Radiocommunication Sector
("ITU-R"),
the 1900 MHz frequency spectrum would only be used for the
    International Mobile Telecommunications- 2000
("IMT-2000"
or
"3-G")
network. The MoCI also announced that the CDMA-based technology
    network which TELKOM uses for its fixed wireless services can
    only operate in the 800 MHz frequency spectrum. At present,
    TELKOM utilizes the 1900 MHz frequency spectrum for its
    fixed wireless network in Jakarta and West Java areas while for
    other areas, TELKOM utilizes the 800 MHz frequency
    spectrum. As a result of the Government's decision,
    TELKOM's Base Station System ("BSS") equipment in
    Jakarta and West Java areas which are part of transmission
    installation and equipment for fixed wireless network can no
    longer be used commencing at the end of 2007. We expect that the
    BSS equipment will be
20
Table of Contents
completely replaced with the BSS equipment operating in
    800 MHz by mid-2007. On January 13, 2006, the MoCI
    issued MoCI Regulation No. 01/PER/M.KOMINFO/1/2006 which
    reaffirmed the Government's decision that TELKOM's
    fixed wireless network can only operate in the 800 MHz
    frequency spectrum and that the 1900 MHz is allocated for
    the
3-G
network. See
    Item 5. "Operating and Financial Review and
    Prospects — A. Operating Results —
    Overview — Write-down of Assets, Depreciation Expense,
    Loss on Procurement Commitments, and Operations, Maintenance and
    Telecommunication Services Expenses". There can be no
    assurance that TELKOM will not recognize further loss as a
    result of such Government decisions.
•
Termination of Wireless Local Loop ("WLL")
    License:
In the first quarter of 2005, the Government, in
    its efforts to rearrange the frequency spectra utilized by the
    telecommunications industry, issued a series of regulations
    which resulted in TELKOM not being able to utilize certain
    frequency spectra it currently uses to support its fixed
    wireline cable network commencing at the end of 2006. As a
    result of these regulations, certain of TELKOM's cable
    network facilities within the fixed wireline segment, which
    comprise primarily of WLL and approach link equipment (a
    transmission equipment to link BTSs to a local exchange)
    operating in the affected frequency spectra, can no longer be
    used commencing at the end of 2006. See Item 5.
    "Operating and Financial Review and Prospects —
    A. Operating Results — Overview — Write-down
    of Assets, Depreciation Expense, Loss on Procurement
    Commitments, and Operations, Maintenance and Telecommunication
    Services Expenses". There can be no assurance that TELKOM
    will not recognize further loss as a result of such Government
    decisions.
•
Indonesian Telecommunications Regulatory Body
    ("ITRB"):
The Telecommunications Law allows the
    Government to delegate its authority to regulate, supervise and
    control the telecommunications sector in Indonesia to an
    independent regulatory body, while maintaining the authority to
    formulate policies over the industry. Such delegation of
    authority to the ITRB was implemented under the MoC Decree
    No. 31/2003, dated July 11, 2003. The ITRB comprises
    officials from the Directorate General of Post and
    Telecommunication and the Committee of Telecommunications
    Regulations. There can be no assurance that the ITRB will not
    take actions that may be detrimental to TELKOM's business,
    financial condition, results of operations or prospects.
•
Competition in the Fixed Line Domestic Telecommunications
    Market:
Historically, TELKOM had the exclusive right to
    provide fixed line domestic telecommunications services in
    Indonesia. Pursuant to regulations introduced to implement the
    Telecommunications Law, the Government terminated TELKOM's
    monopoly in providing fixed line domestic telecommunications
    services. The MoC issued Indosat a license to provide local
    telephone services from August 2002. On May 13, 2004,
    Indosat received its commercial license to provide domestic
    long-distance telephone services. Indosat launched its CDMA
    fixed wireless access service under the brand name
    "StarOne" in Surabaya on May 29, 2004 and in
    Jakarta on July 25, 2004, thereby creating a "duopoly
    system" in Indonesia's fixed line domestic
    telecommunications market. As of December 31, 2005, Indosat
    offered this service in Jakarta, Bogor, Depok, Tangerang,
    Bekasi, Banten, Surabaya, Yogyakarta, Malang, Sidoarjo, Gresik,
    Batu, Madura (Bangkalan, Sampang, Sumenep), Pasuruan, and Medan.
    Based on the interconnection agreement between TELKOM and
    Indosat dated September 23, 2005, TELKOM and Indosat have
    agreed to open interconnection (i) of TELKOM's local
    fixed line network with Indosat's long-distance fixed line
    network; (ii) of Indosat's local fixed line network
    with TELKOM's long-distance fixed line network;
    (iii) between TELKOM's and Indosat's
    long-distance fixed line networks; (iv) of TELKOM's
    domestic fixed line network with Indosat's international
    fixed line network; and (v) Indosat's local fixed line
    network with TELKOM's international fixed line network,
    with the interconnection tariff being calculated on a
    call-by-call basis. On December 1, 2005, TELKOM and Indosat
    entered into an interconnection agreement for the
    interconnection of TELKOM's fixed network with
    Indosat's mobile cellular network and allowing
    Indosat's mobile customers to access TELKOM's IDD
    services. Therefore, Indosat is expected to expand its service
    coverage to other cities in Indonesia. Indosat also commenced
    offering limited domestic long-distance services for
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Table of Contents
calls within its network in late 2004. This greater competition
    in the fixed line market, including fixed wireless, could lead
    to a decline in TELKOM's existing subscriber base as
    subscribers choose to receive services from other providers.
    TELKOM's interconnection arrangements will be affected by
    the new cost-based interconnection scheme which was publicly
    announced in February 2006. An amendment to the interconnection
    agreement with Indosat reflecting the new cost-based
    interconnection scheme is expected to be effective by the end of
    2006.
•
DLD and IDD Services:
On March 11, 2004, the MoC
    issued Decree No. 28/2004, Decree No. 29/2004 and Decree
    No. 30/2004 that further implement the Government's
    policy of encouraging competition in the markets for DLD and IDD
    services. Based on Decree No. 28/2004, TELKOM, which
    currently uses "0" as the access code for its DLD
    service, was required by March 1, 2005 to cease using the
    "0" access code and to implement a three digit access
    code in the form of "01X" for access to its DLD
    service. However, TELKOM has not within the given deadline
    implemented, and does not expect in the near future to
    implement, a three digit access code, as extensive installation
    or upgrade of equipment will be required. TELKOM expects to
    incur significant costs in connection with the new requirement
    to establish three digit DLD access codes, including
    expenditures required to install or upgrade new switching
    facilities, create a new routing database, costs relating to
    customer education and other marketing costs. In response to the
    MoC Decree No. 28/2004, in June 2004, TELKOM submitted a
    letter to the ITRB highlighting the technical difficulties in
    implementing the three digit DLD access codes within the given
    deadline and the substantial costs involved, and requesting that
    TELKOM be allowed to continue using the "0" prefix for
    its DLD access prefix and that it be given an additional
five-year
period to
    implement the three digit DLD access codes. On April 1,
    2005, the MoCI, to which telecommunications regulatory
    responsibility was transferred, announced that it would make
    available to Indosat the "011" DLD access in five
    major cities that were technically ready for interconnection,
    including Jakarta, and progressively extend it to all other area
    codes within five years. TELKOM has also been assigned
    "017" as its DLD access code. However, the
    interconnection agreement between Indosat and TELKOM in these
    five cities does not contain any provisions on technical and
    business arrangements regarding the use of "011" and
    "017" DLD access codes. In the five-year interim
    period and thereafter, the "0" prefix may continue to
    be used by all operators, including TELKOM, as default code for
    each operator's customers to access the DLD service
    selected by the respective operator. Competition in the market
    for DLD services could lead to a decline in TELKOM's DLD
    revenues as subscribers choose to receive DLD services from
    other providers, such as Indosat. With regard to IDD services,
    on May 13, 2004 TELKOM received its commercial license from
    the Government to provide IDD services and began offering such
    services to customers on June 7, 2004. Nevertheless,
    competition among IDD service providers may limit TELKOM's
    ability to generate significant IDD revenues. On May 17,
    2005, the MoCI issued decree No. 6/2005. According to
    Decree No. 6/2005, the three digit access code in the form
    of "01X" and "0" access code for access to
    DLD services may be used. The "0" access code is being
    used to accommodate customers who prefer not to choose their
    long-distance carrier, while the "01X" access code has
    to be implemented gradually in local areas in which TELKOM has
    technical capabilities to support such services. By
    April 1, 2010, the "01X" long-distance services
    must be commenced in all TELKOM's local areas to
    accommodate customers who prefer to choose their long-distance
    carrier. For further information, see Item 4.
    "Information on the Company — B. Business
    Overview — Indonesian Telecommunications
    Industry — Regulations — DLD and IDD
    Services."
•
Compensation Risk:
The Telecommunications Law provides
    that TELKOM and Indosat will be compensated for the early
    termination of their exclusive rights. TELKOM previously had
    exclusive rights to provide fixed local and domestic
    long-distance services in Indonesia. TELKOM's exclusive
    right to provide fixed local telecommunications services was
    terminated by the Government in August 2002 and TELKOM's
    exclusive right to provide domestic long-distance services was
    terminated on March 30, 2004. The Government has determined
    the scheme of compensation for the termination of TELKOM's
    exclusive rights, which will consist of
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(i) expedited issuance of an IDD license to TELKOM, which
    was issued on May 13, 2004; (ii) approval of the
    reissuance and transfer of TELKOM's DCS 1800 license to
    Telkomsel, which took place on July 12, 2002; and
    (iii) a net cash payment to TELKOM of Rp.478 billion
    (after taxes). While the amount of the compensation payable to
    TELKOM has been determined, payment was contingent on
    appropriations to the State Budget for the MoCI, which requires
    approval by Parliament. On December 15, 2005, TELKOM signed
    an agreement on Implementation of Compensation for Termination
    of Exclusive Rights with the Directorate General of Post and
    Telecommunications of MoCI. Pursuant to this agreement, the
    Government agreed to pay Rp.478.0 billion to TELKOM over a
    five-year period. Under the plan, the Government paid
    Rp.90.0 billion in 2005 and shall pay Rp.90.0 billion
    in 2006 and then the remaining Rp.298.0 billion thereafter
    in installments or in lump-sum, which payment schedule will
    depend upon the Government's budgetary considerations. In
    addition, TELKOM is required by the Government to use funds
    received thereunder for development of Indonesian
    telecommunications infrastructure. TELKOM can provide no
    assurance that the Government will honor its promise to pay the
    balance within the next five years.
•
Identity Registration:
For prepaid subscribers, there is
    a new obligation regulated under the MoCI Decree
    No. 23/2005, issued on October 28, 2005. Pursuant to
    this Decree, TELKOM is required to obtain identity information
    for all of its prepaid customers on or prior to April 28,
    2006. Such an obligation may slow down revenue growth in 2006
    compared to 2005 and have an adverse impact on TELKOM's
    profit as TELKOM will have to incur additional expenditures on
    support systems and dealers' compensation. It may also
    present difficulties for TELKOM in retaining existing customers
    and expose TELKOM customers' identities to illegal use or
    government investigations. This identity registration
    requirement, however, will affect other competitors as well.
There can be no assurance that the amendment or interpretation
or implementation of current laws and regulations, or the
introduction of additional laws or regulations, will not
adversely affect TELKOM's business, financial condition and
prospects.
TELKOM's increasingly important cellular operations
    face significant constraints and competitive pressures.
TELKOM provides cellular telecommunications services primarily
through its subsidiary Telkomsel (GSM 900 Mhz and
1800 Mhz). Telkomsel has experienced rapid growth in its
subscriber-base in recent years and its revenue has become an
increasingly large component of TELKOM's consolidated
revenue. Telkomsel's future growth depends upon its ability
to manage capacity and spectrum constraints. Telkomsel has
experienced such constraints in the past and has therefore
deployed significant resources to eliminate such constraints.
Although Telkomsel is not currently experiencing such
difficulties, there is no guarantee that Telkomsel would not
face such constraints in the future, which may result in network
congestion, reduced service quality and an inability to increase
and retain its subscriber base.
The Indonesian cellular telecommunications market is highly
competitive. Currently, Telkomsel competes primarily with
Indosat and PT Excelcomindo Pratama ("Excelcomindo")
in attracting and retaining subscribers for its mobile cellular
telecommunications services. There are also several other new
competitors, including new CDMA cellular operators. Competition
between Telkomsel and all of these operators is based on various
factors such as pricing, network quality and coverage, range of
services offered and customer service. While TELKOM believes
Telkomsel has been successful in maintaining its market share to
date, there can be no assurance that Telkomsel will be
successful in competing in the cellular market in the future.
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Table of Contents
TELKOM's satellites have a limited life and
    substantial risk exists for
TELKOM-1
and
TELKOM-2
to be damaged
    or interrupted during operation and satellite loss or reduced
    performance may adversely affect our financial condition,
    results of operations and ability to provide certain
    services.
TELKOM's TELKOM-1 and TELKOM-2 satellites have limited
operational lifespans. A number of factors affect the
operational livespans of satellites, including the quality of
their construction, the durability of their component parts, the
amount of fuel on board, the launch vehicle used and the manner
in which the satellite is monitored and operated. The satellites
could fail before the end of their useful lives and repairing
these satellites while in orbit is not feasible. For further
information on the insurance coverage for TELKOM-1 and TELKOM-2
satellites, see Item 4. "Information of the
Company — B. Business Overview —
Insurance". While TELKOM has provided insurance for its
satellites, there can be no assurance that such insurance will
offer adequate coverage. The loss of its satellites may have a
material adverse effect on TELKOM's financial condition,
results of operations and ability to provide certain services,
particularly in the eastern parts of Indonesia which currently
relies largely on satellite coverage for telecommunication
services.
TELKOM is subject to Indonesian accounting and corporate
    disclosure standards that differ in significant respects from
    those applicable in other countries.
There may be less publicly-available information about
Indonesian public companies, including TELKOM, than is regularly
disclosed by public companies in countries with more mature
securities markets. TELKOM's audited consolidated financial
statements have been prepared in accordance with Indonesian
GAAP, which varies in certain significant respects from
U.S. GAAP. See Item 5. "Operating and Financial
Review and Prospects — A. Operating
Results — Summary of Significant Differences between
Indonesian GAAP and U.S. GAAP" and Note 54 to
TELKOM's consolidated financial statements.
Certain TELKOM employees, including present and former
    TELKOM directors, are subject to on-going police
    investigations.
There are on-going investigations by the West Java Police
Department as to the conduct of TELKOM's Director of Human
Resources Development, TELKOM's Director of Consumer, and
several other TELKOM employees (including one former TELKOM
director and one former President Director of Napsindo). As the
details of the investigations have not been made public, TELKOM
does not know the full nature or extent of the investigations or
the matters to which they relate, or whether any charges are
likely to be filed. Based on press reports, TELKOM understands
that the investigations relate principally to an alleged
violation of anti-corruption law regarding (i) the
retention by TELKOM of a consultant and an alleged overpayment
without compliance with proper procedures; and (ii) the
alleged provision of interconnection services to Napsindo,
TELKOM's subsidiary, and Globalcom, a Malaysian company, at
an incorrect tariff, and alleged use by Napsindo/Globalcom of
TELKOM's network for the provision of illegal VoIP
services. It is also understood that one of the investigations
relates to TELKOM's guarantee of a bank loan obtained by
Napsindo. To TELKOM's knowledge, no charges have been filed
against any of the persons investigated by the West Java Police
Department, although several of them (but not our Director of
Consumer) were held in custody in West Java pending completion
of the investigations. On May 10, 2006, those individuals
were released from police custody because the police were unable
to find any incriminating evidence to support the alleged
charges during the 120-day period they were held. 120 days
is the maximum period allowed for police custody of suspects for
investigation purposes. However, the investigation is ongoing.
There can be no assurance that the police will not find evidence
of wrong-doing, that charges will not be filed in relation to
the foregoing or that such persons or other TELKOM employees
will not be found guilty of any offence. Although TELKOM
believes that the investigations are without merit, to the
extent any of such persons are in custody, or are found guilty
of any offence, TELKOM is and
24
Table of Contents
would be deprived of their services. In addition, TELKOM does
not believe that there are any financial ramifications for
TELKOM as a result of the investigations.
TELKOM is incorporated in Indonesia and it may not be
    possible for investors to effect service of process or to
    enforce judgments obtained in the United States against
    TELKOM.
TELKOM is a limited liability company incorporated in Indonesia,
operating within the framework of Indonesian laws relating to
public companies and all of TELKOM's significant assets are
physically located in Indonesia. In addition, the majority of
TELKOM's Commissioners and Directors reside in Indonesia
and a substantial portion of the assets of such persons is
located outside the United States. As a result, it may not be
possible for investors to effect service of process, including
judgments, on TELKOM or such persons within the United States,
or to enforce against TELKOM or such persons in the United
States judgments obtained in United States courts, including
judgments predicated upon the civil liability provisions of the
United States federal securities laws or the securities laws of
any state within the United States, or upon other bases.
TELKOM has been advised by its Indonesian legal advisor that
judgments of United States courts, including judgments
predicated upon the civil liability provisions of the United
States federal securities laws, are not enforceable in
Indonesian courts, although such judgments could be admissible
as non-conclusive evidence in a proceeding on the underlying
claim in an Indonesian court. There is doubt as to whether
Indonesian courts will enter judgments in original actions
brought in Indonesian courts predicated solely upon the civil
liability provisions of the United States federal securities
laws. As a result, holders of ADSs or Common Stock would be
required to pursue claims against TELKOM or its Commissioners
and Directors in an Indonesian court.
Forward-looking statements reflect current expectations
    and may not be correct.
This document contains various forward-looking statements,
including statements regarding our expectations and projections
for future operating performance and business prospects. The
words "believe", "expect",
"anticipate", "estimate",
"project" and similar words identify forward-looking
statements. In addition, all statements other than statements of
historical facts included herein are forward-looking statements.
These statements reflect TELKOM's current expectations.
Although TELKOM believes that the expectations reflected in the
forward-looking statements are reasonable, TELKOM can give no
assurance that such expectations will prove to be correct. They
are subject to a number of risks and uncertainties, including
changes in the economic, social and political environments in
Indonesia. In light of the many risks and uncertainties
surrounding Indonesia, investors in the ADSs or the common
shares should bear in mind that TELKOM cannot guarantee that the
forward-looking statements described herein will transpire. All
subsequent written and oral forward-looking statements
attributable to TELKOM or persons acting on our behalf are
expressly qualified in their entirety by reference to these
risks.
ITEM 4.
INFORMATION ON THE COMPANY
A.
History and Development of the Company
TELKOM, a majority state-owned company, is the principal
provider of fixed line services in Indonesia. TELKOM's
majority-owned subsidiary Telkomsel is also the largest
Indonesian mobile cellular operator, as measured by subscribers
and revenues. The Company also provides a wide range of other
telecommunications services including interconnection, network,
data and Internet services and other telecommunications
services. Pursuant to its Articles of Association, TELKOM was
established for an unlimited period of time. The Company's
purposes and objectives are to operate telecommunications
networks and provide telecommunications and information services.
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 first made available in Indonesia in
1882 and, until 1906, were provided by privately-owned
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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 and Giro and PN
Telekomunikasi. In 1974, PN Telekomunikasi was further divided
into two state-owned companies, Perusahaan Umum Telekomunikasi
("Perumtel") to provide domestic and international
telecommunications services and PT Industri Telekomunikasi
Indonesia Tbk ("PT INTI"), to provide
telecommunications equipment manufacturing. In 1980, the
international telecommunications business was transferred to
Indosat.
In 1991, Perumtel was transformed into a "Persero", or
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 operations were segregated into
twelve regional operating units, known as "Witels,"
which were centrally controlled from 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 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; Division VI Kalimantan; and
Division VII Eastern part of Indonesia) and one Network
Division. The Company also entered into KSO Agreements pursuant
to which it transferred the right to operate five of its seven
regional divisions (regional divisions I, III, IV, VI and
VII) to private sector consortia, each of which involved one or
more prominent international telecommunications operators. The
KSO Agreements provided for the relevant KSO partner to manage
and operate the regional division for a fixed term, undertake
the construction of a specified number of fixed lines and, at
the end of the fixed term, transfer the existing and new
telecommunications facilities in the region to TELKOM for an
agreed amount of compensation. The KSO Agreements also provided
for TELKOM and the KSO partner to share revenues generated
during the term of the agreement.
On November 14, 1995, the Government sold TELKOM shares
through an initial public offering. TELKOM shares are listed on
the Jakarta Stock Exchange and the Surabaya Stock Exchange and
its shares, in the form of ADSs, are listed on the New York
Stock Exchange and the London Stock Exchange. Its shares were
also publicly offered without listing on the Tokyo Stock
Exchange. TELKOM is currently one of the largest companies by
market capitalization in Indonesia, with a market capitalization
of approximately Rp.118,943 billion as of December 31,
2005 and of approximately Rp.143,136 billion as of
May 24, 2006. The Government currently has an aggregate
interest of approximately 51.2% of the issued and outstanding
shares of TELKOM. The Government also holds the Dwiwarna share
of TELKOM, which has special voting and veto rights over certain
matters.
Based on the resolution of the Extraordinary General Meeting of
Stockholders on December 21, 2005, the Stockholders authorized a
plan to repurchase up to a maximum of 5% of TELKOM's
20,159,999,279 total issued and outstanding Series B shares
for a total repurchase amount not exceeding Rp.5,250,000
million. Pursuant to the share repurchase plan, as of
June 2, 2006, TELKOM has cumulatively repurchased an
aggregate of 8,373,500 Series B shares on either the
Jakarta Stock Exchange or the New York Stock Exchange,
representing less than 0.05% of the total issued and outstanding
Series B shares of 20,159,999,279 for a total repurchase
amount of Rp.61.4 billion (US$6.2 million). These
transactions are in compliance with the limitations set forth in
the resolution. For further information on the share repurchase,
see Item 7. "Major Stockholders and Related Party
Transactions — A. Major Stockholders".
Following the Indonesian economic crisis that began in mid-1997,
certain KSO partners experienced difficulties in fulfilling
their obligations to TELKOM, which led to certain disputes. As a
result,
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TELKOM has in recent years acquired or entered into agreements
to acquire control of its KSO partners in regions I, III and VI,
and amended the terms of the KSO agreement with its KSO partner
in region IV to obtain legal right to control financial and
operating decisions of Regional Division IV. For a more complete
description of the acquisition of control of its KSO partners in
regions I, III and VI, acquisition of control of region IV, and
TELKOM's KSO arrangements, see Item 10.
"Additional Information — C. Material
Contracts" and Item 4. "Information on the
Company — B. Business Overview — Joint
Operation Scheme".
In 1999, the Government passed Telecommunications Law
No. 36 which became effective in September 2000. The
Telecommunications Law provides key guidelines for industry
reforms, including industry liberalization, facilitation of new
entrants and enhanced competition. Under the prior
telecommunications law, TELKOM and PT Indonesian Satellite
Corporation ("Indosat") maintained joint ownership in
most telecommunications companies in Indonesia. The Government
reforms called for the progressive elimination of these joint
shareholdings to promote competition. As a result, in 2001,
TELKOM acquired Indosat's 35% interest in Telkomsel,
resulting in TELKOM owning 77.72% of the shares of Telkomsel and
Indosat acquired TELKOM's 22.5% interest in Satelindo and
37.7% interest in Lintasarta. In 2002, TELKOM sold 12.72% of
Telkomsel to Singapore Telecom Mobile Pte Ltd ("SingTel
Mobile"), resulting in TELKOM's ownership being
reduced to 65% of the shares of Telkomsel.
Pursuant to the Telecommunications Law, the Government as of
August 1, 2001 terminated the exclusive rights of TELKOM to
provide fixed line services in Indonesia and Indosat to provide
international direct dial services. TELKOM's exclusive
right to provide domestic local service was terminated in August
2002 and TELKOM's exclusive right to provide domestic
long-distance service was likewise terminated in August 2003. On
May 13, 2004, TELKOM received its commercial license to
provide IDD fixed line services and began offering such services
on June 7, 2004. The MoC issued Indosat a license to
provide local telephone services from August 2002. On
May 13, 2004, Indosat received its commercial license to
provide domestic long-distance telephone services. Indosat
launched its CDMA fixed wireless access service under the brand
name "StarOne" in Surabaya on May 29, 2004 and in
Jakarta on July 25, 2004, thereby creating a "duopoly
system" in Indonesia's fixed line domestic
telecommunications market. As of the date of this Annual Report,
Indosat is able to provide nationwide DLD services through its
CDMA-based fixed wireless network and its interconnection
arrangements with TELKOM.
For a description of the important events in the development of
the Company's business since the beginning of the
Company's last three financial years to the date of this
Annual Report, see Item 5. "Operating and Financial
Review and Prospects — A. Operating
Results — Overview". A description of the
Company's principal capital expenditures and divestitures,
since the beginning of the Company's last three financial
years to the date of this Annual Report is set forth in
Item 5. "Operating and Financial Review and
Prospects — B. Liquidity and Capital
Resources". Information concerning the principal capital
expenditures and divestitures currently in progress is also
described in Item 5. "Operating and Financial Review
and Prospects — B. Liquidity and Capital
Resources". The Company is domiciled in the Republic of
Indonesia. It is incorporated in and under the legislation of
the Republic of Indonesia. The address of the Company's
registered office is No. 1, Jalan Japati, Bandung, 40133,
Indonesia and the telephone number of the Company's
registered office is
(62) (22)
452-1510.
B.
Business Overview
General
TELKOM is the main provider of fixed line telecommunications
services in Indonesia and is the majority owner of Telkomsel,
which is the largest Indonesian mobile cellular operator, as
measured by subscribers and revenue. The Company also provides a
wide range of other telecommunications
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services including interconnection, network, data and Internet
services and other telecommunications services. TELKOM reports
revenues in the following categories:
•
Fixed lines (which consists of fixed wireline and fixed
    wireless);
•
Cellular;
•
Joint Operation Schemes (KSO);
•
Interconnection;
•
Network;
•
Data and Internet;
•
Revenue-Sharing Arrangements; and
•
Other Services (including revenues from telephone directory
    services and building management services).
For segment reporting purposes, TELKOM has four segments:
(i) fixed wireline, (ii) fixed wireless,
(iii) cellular and (iv) other. See Note 46 to the
consolidated financial statements. The fixed wireline segment
provides local, domestic long-distance and international
(starting 2004) telephone services, and other telecommunications
services (including, among others, leased lines, telex,
transponder, satellite and Very Small Aperture Terminal-VSAT) as
well as ancillary services. The fixed wireless segment provides
local and domestic long-distance CDMA-based telephone services,
as well as other telecommunication services using
limited-mobility wireless handsets within a local area code. The
cellular segment provides basic telecommunication services,
particularly mobile cellular telecommunication services.
Operating segments that do not individually represent more than
10% of the Company's revenues are presented as
"Other" comprising the telephone directories and
building management businesses.
For 2005, no single customer, other than interconnection
customers, accounted for more than 1% of TELKOM's total
operating revenues and TELKOM's top 100 customers, other
than interconnection customers, together accounted for no more
than 2% of its total operating revenues. For the purpose of
calculating operating revenues, TELKOM treats each state-owned
enterprise owned by the Government as a single customer.
TELKOM's business does not experience significant
seasonality.
Fixed Line Services
Fixed line services are comprised mainly of local and domestic
long-distance services. TELKOM is the principal provider of
fixed line services in Indonesia. In 2005, TELKOM provided fixed
line services in Divisions I, II, III, IV, V and VI. In
2005, revenues from fixed line services in these divisions
contributed Rp.10,781.3 billion (US$1,096.8 million),
or 25.8% of total operating revenues. Beginning January 20,
2004, when TELKOM acquired control of operations of Regional
Division IV, TELKOM began providing fixed line services in
Division IV.
Fixed Wireline Services
Fixed wireline subscribers pay one-time installation charges,
ongoing monthly subscription charges and usage charges for
local, domestic long-distance and international services. Usage
charges are generally uniform nationwide and are based on call
distance, call duration and the time of day at which calls are
made. In addition, subscribers are provided with a number of
value-added features, such as voicemail and information services
and billing and directory assistance, which are billed on a
monthly basis.
TELKOM began offering IDD services, under the brand name
"Telkom International Call 007", or "TIC
007," on June 7, 2004. TELKOM reports its IDD revenues
under international interconnection
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revenues as this service requires interconnection between TELKOM
and network operators in other countries. See
"— Interconnection Services" below. Through
its VoIP service, which is known as "TelkomGlobal
017", TELKOM already provides international call services
based on VoIP technology. TELKOM records its revenues from the
VoIP service under "Data and Internet Services" as
this service uses IP and data-based infrastructure. See
"— Data and Internet Services" below.
Fixed Wireless Services
In December 2002, TELKOM began offering a limited mobility
(within a local area code) CDMA-based fixed wireless phone
service under the brand name "TELKOMFlexi" for both
fixed and portable handsets. TELKOM's rollout of this
service began in the three cities of Surabaya, Denpasar and
Balikpapan and, as of December 31, 2005, was available in
231 cities. TELKOM's rollout of this limited mobility fixed
wireless service is occurring concurrently with its use of CDMA
fixed wireless technology for the development of its fixed line
network. CDMA-based fixed wireless technology enables rapid
development of telephone networks and the reduction of capital
expenditures per line by reducing and often eliminating the need
for layout of cables. TELKOM intends to continue to rapidly
develop its CDMA-based fixed wireless network and expand its
TELKOMFlexi service to other cities and regions in Indonesia. As
of December 31, 2005, TELKOM had 1,448 BTSs and
3.7 million line units deployed, of which 1,357 BTSs and
3.3 million line units were financed by TELKOM and 91 BTSs
and 0.3 million line units were established under the RSA
scheme. As of December 31, 2005, TELKOM had 4,061,867
TELKOMFlexi lines in service.
TELKOMFlexi subscribers have the option of postpaid and prepaid
services. Postpaid subscribers pay one-time activation charges,
ongoing monthly subscription charges and usage charges for
local, domestic-long distance and international services, which
charges are generally the same as those paid by fixed line
subscribers. Prepaid subscribers are required to purchase
starterpacks containing RUIM cards and vouchers or refills, and
pay only usage charges, which are typically higher than those
paid by postpaid subscribers. Prepaid subscribers may purchase a
Rp.35,000 starterpack, which include a Rp.35,000 voucher.
Refills are made through purchasing vouchers, or through
voucherless electronic and ATM channels, in amounts ranging from
Rp.10,000 to Rp.500,000, depending on the refill method used.
Vouchers and refills purchased remain active for limited periods
from the date of purchase, ranging from 15 days for a
Rp.10,000 voucher or refill to 210 days for a Rp.500,000
voucher or refill. TELKOM generally provides a 30-day grace
period after the expiry of the active period in which only
incoming calls are allowed.
TELKOMFlexi subscribers are also provided with a number of
value-added features, such as SMS, WAP, a web portal, ring
tones, voicemail and information services, such as billing,
directory assistance and other content services. The revenues
from these services are reported in the Data and Internet
category. See "— Data and Internet Services"
below. Customers generally have all features offered by cellular
services except roaming to other local area codes and
internationally. In June 2004, TELKOM launched a
"FlexiCombo" service which allows each subscriber to
have up to three telephone numbers, with each number assigned
for use in one of three different cities (area codes), but
without local area code or international roaming. As of
December 31, 2005, the "FlexiCombo" service was
available in 231 cities.
Cellular Services
TELKOM provides its mobile cellular services through its
65%-owned subsidiary Telkomsel. Cellular revenues grew by 39.8%
from Rp.10,421.3 billion (US$1,121.8 million), or
30.7% of TELKOM's total operating revenues, for the year
ended December 31, 2004 to Rp.14,571.0 billion
(US$1,482.3 million), or 34.8% of TELKOM's total
operating revenues, for the year ended December 31, 2005.
Over the same period, the total number of Telkomsel's
mobile cellular subscribers (pre-paid and post-paid) increased
by 49.0% from approximately 16.3 million at the end of 2004
to approximately 24.3 million as of December 31, 2005.
Of the total subscribers as of December 31, 2005,
approximately 22.8 million were pre-paid and approximately
1.5 million were post-paid. Based on data developed by
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Telkomsel from various sources, Telkomsel had an estimated 52%
share of the GSM cellular market in Indonesia as of
December 31, 2005, compared to an estimated 54% market
share as of December 31, 2004.
Telkomsel provided GSM cellular services in Indonesia through
its own network and internationally through the
376 networks operated by 244 international roaming partners
in 148 countries as of the end of 2005. As of December 31,
2005, Telkomsel had the largest network of any of the cellular
operators in Indonesia, providing coverage to over 90% of
Indonesia's population, including all counties in Indonesia
and all sub-counties in Java and Bali.
Telkomsel provides its subscribers with the option of a prepaid
service under the brand name "SimPATI," or a postpaid
service under the brand name "KartuHALO." In May 2004,
Telkomsel launched a new prepaid brand "Kartu As,"
which was intended to target the lower segment of the market as
well as customers who travel frequently within Indonesia, by
offering free domestic roaming and lower tariffs on local and
domestic long-distance calls, with no difference between tariffs
for calls during peak and off-peak hours. On February 1,
2005, Telkomsel introduced new flat tariff for
simPATI — Rp.150 per 30 seconds for any call within
Telkomsel's network throughout Indonesia during off-peak
time. Further, on March 15, 2005, in order to accelerate
simPATI growth and to decrease the simPATI churn rate, Telkomsel
launched a new brand called "simPATI 10HOKI" which
offers ten new benefits, including 10 free SMSs, a free 10
minute call and 10 free contents download. Telkomsel also offers
tailor-made postpaid services for corporate customers and a
postpaid family service under the brand name
"HALOkeluarga." In August 2005, Telkomsel launched new
"HALObebas" packages for its post-paid customers which
allow customers who subscribe to any kartuHALO package to enjoy
free roaming facilities as part of their basic service.
Generally, postpaid subscribers pay one-time activation charges,
ongoing monthly subscription charges and usage charges for
roaming, SMS, local, domestic-long distance and international
services. All postpaid subscribers enjoy free national roaming
and also choose among the following options: (a) special
tariff for calls to five favorite numbers within
Telkomsel's network; (b) 150 free SMSs per month; or
(c) waiver of the monthly subscription charge.
Prepaid customers purchase a starter package, the price of which
starts at Rp.15,000 for Kartu As customers and Rp.15,000 for
SimPATI customers, depending on the value of the pre-paid
voucher included in the package. For Kartu As customers, the
Rp.15,000 starter package contains a SIM card and a voucher
worth Rp.15,000. For SimPATI customers, the Rp.25,000 starter
package contains a SimPATI SIM card and a voucher worth
Rp.15,000. SimPATI subscribers can buy pre-paid vouchers ranging
in value from Rp.20,000 to Rp.1,000,000 to increase the value of
their SIM cards, while Kartu As subscribers can buy prepaid
vouchers ranging from Rp.5,000 to Rp.100,000. The
customer's prepaid account can be topped up electronically
or by supplemental refill vouchers. When refill vouchers are
purchased, subscribers call an automated telephone number and
enter a 14-digit code printed on their voucher in order to
activate or supplement their account with the new prepaid
amount. Kartu As and SimPATI starter packages and refill
vouchers may be purchased at any of Telkomsel's service
centers and distribution outlets. Electronic refills may also be
purchased at selected automatic teller machines, via telephone
banking and over the Internet. In June 2004, Telkomsel
introduced a new electronic refill service called
"M-KIOS" which allows prepaid customers to refill with
a mobile handset as the transaction terminal through secure
means. In September 2004, Telkomsel introduced an automatic
refill service that permits payments through VISA credit cards,
pursuant to which a prepaid customer can elect to have a prepaid
account refilled automatically in one of the following ways:
(i) whenever the prepaid account balance falls below
Rp.10,000; (ii) a fixed amount monthly; or (iii) on
demand, through SMS. The prepaid customer credits generally have
a predetermined expiry date.
Provided that they meet certain credit-related eligibility
requirements, SimPATI customers may sign up for Telkomsel's
post-paid KartuHALO services at any time without having to
change their telephone numbers. While Kartu As and SimPATI
customers do not pay an activation fee or monthly subscription
charges, they pay higher usage charges than postpaid subscribers.
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On May 26, 2005, Telkomsel launched its trial run of 3G
services in Jakarta. Telkomsel became the first Indonesian
telecommunication company to implement a trial run of such
services. Telkomsel continues to expand its 3G network and
is conducting feasibility studies, field tests and marketing of
its 3G services. In February 2006, Telkomsel, Indosat,
Excelcomindo, PT Hutchison CP Telecommunications
("HCPT") and PT Lippo Telekom were awarded separate
licenses to operate the 3G network. The licenses will expire in
ten years. Telkomsel has already completed its trial run period,
but the service is not yet available to the public.
Telkomsel also offers cellular users value added services such
as SMS, international roaming, GPRS, MMS, multi-party calling,
call forwarding, call waiting, caller number display and
non-display, ring back tone (which allows callers to the
subscriber of the ring back tone service to hear a pre-selected
ringing tone), mobile banking, SMS to e-mail services and other
personal mobile data services, the revenues from which are
reported in the Data and Internet category. See
"— Data and Internet Services" below.
The following table sets forth selected historical information
on Telkomsel's subscriber base for the periods indicated:
As of or for the Year Ended December 31,
2003
2004
2005
Cellular
    subscribers
(1)
KartuHALO (Postpaid)
1,007,034
1,327,549
1,470,755
SimPATI (Prepaid)
8,581,773
11,557,758
16,004,631
Kartu As (Prepaid)
—
3,405,201
6,793,967
Deactivations
(2)
KartuHALO (Postpaid)
265,355
317,020
372,921
SimPATI (Prepaid)
2,823,025
8,470,819
15,836,633
Kartu As (Prepaid)
—
824,489
12,105,848
Average monthly churn
    rate
(3)
KartuHALO (Postpaid)
2.3
%
2.3
%
2.1
%
SimPATI (Prepaid)
4.0
%
6.8
%
8.2
%
Kartu As (Prepaid)
—
5.0
%
14.9
%
ARPU
(4)
KartuHALO (Postpaid) (Rp.'000)
314
304
291
SimPATI (Prepaid) (Rp.'000)
95
84
84
Kartu As (Prepaid) (Rp.'000)
—
48
45
(1)
Prepaid subscribers may purchase SIM-cards and refill vouchers
    with values ranging from Rp.20,000 to as much as Rp.1,000,000.
    For Kartu As, the voucher values range from Rp.5,000 to
    Rp.100,000. The following table shows the respective active
    periods for Telkomsel's SimPATI and Kartu As prepaid
    packages, respectively:
Period during which subscribers
SimPATI Value of Voucher
will have access to services
Rp.20,000
45 days
Rp.50,000
60 days
Rp.100,000
90 days
Rp.150,000
150 days
Rp.200,000
180 days
Rp.300,000
210 days
Rp.500,000
240 days
Rp.1,000,000
270 days
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Period during which subscribers
Kartu As Value of Voucher
will have access to services
Rp.5,000
30 days
Rp.10,000
30 days
Rp.25,000
30 days
Rp.50,000
30 days
Rp.100,000
30 days
(2)
Includes voluntary and involuntary deactivations.
(3)
The average monthly churn rate for a year is computed by adding
    the monthly churn rates during the year and dividing by 12. The
    monthly churn rate is computed by dividing the number of
    subscribers deactivated during the month by the number of
    subscribers at the beginning of the month.
(4)
Refers to Average Revenue per User which is calculated by taking
    the sum of the ARPU for each month of the year and dividing by
    12. ARPU is computed by dividing total cellular revenues for
    either postpaid or prepaid subscribers (excluding connection
    fees, interconnection revenues, international roaming revenues
    from non-subscribers and dealer discounts) for each month by the
    respective average number of postpaid or prepaid cellular
    subscribers for that month.
In June 2004, Telkomsel introduced an enhanced data transmission
technology known as "EDGE," or Enhanced Data rates for
GSM Evolution, which offers enhanced data transmission speeds
for handsets equipped to handle EDGE. As of December 31,
2005, EDGE was available in Jakarta, Surabaya, Batam, Semarang
and Bali. Telkomsel intends to continue to develop EDGE
technology and expand this service to other major cities in
Indonesia.
Joint Operation Scheme
TELKOM and its remaining KSO partner, PT Bukaka SingTel
International, provided fixed line and other services in
Regional Division VII. In 2005, TELKOM's revenues from KSO
Regional Division VII (including amortization of unearned
initial investor payments) contributed Rp.588.7 billion
(US$59.9 million), or 1.4% of total operating revenues.
TELKOM entered into agreements to establish the KSOs in 1995 and
pursuant to such agreements transferred the right to operate
Regional Divisions I, III, IV, VI and VII to private sector
consortia, each of which involved one or more prominent
international telecommunications operators. TELKOM then retained
the right to operate divisions II and V, its two largest
divisions. The KSO Agreements provided for the relevant KSO
partner to manage and operate the Regional Division for a fixed
term, undertake the construction of a specified number of fixed
lines and, at the end of the fixed term, transfer the existing
and new telecommunications facilities in the region to TELKOM
for a pre-determined agreed amount of compensation. The KSO
Agreements also provided for TELKOM to receive the following:
(a) one-time initial payment from the KSO partners;
(b) guaranteed minimum monthly payments or Minimum TELKOM
Revenues ("MTR"); and (c) additional monthly
revenue-sharing payments or Distributable TELKOM Revenues
("DTR") from the revenues of the KSO Unit after
payments of MTR and certain operating expenses. The KSO partners
were granted licenses to provide fixed line services in the
respective regions.
Following the Indonesian economic crisis that began in mid-1997,
certain KSO partners experienced difficulties in fulfilling
their obligations to TELKOM. In order to assist the KSO partners
in meeting their obligations and to maintain the continuity of
the KSO Agreements, all of the KSO partners entered into a
Memorandum of Understanding with TELKOM on June 5, 1998
which reduced the minimum line construction obligations of the
KSO partners, decreased TELKOM's share of KSO revenues for
1998 and 1999 and cancelled TELKOM's option to purchase the
assets of the KSO before the end of the KSO period. Beginning
January 1, 2000, the parties reverted to the terms of the
original KSO agreements with respect to MTR and DTR payments.
Due to the severity of the crisis, these measures did not solve
the significant difficulties faced by the KSO partners and
TELKOM has in recent years acquired or entered into agreements
to acquire control of its KSO partners in Regional Divisions I,
III and VI, and amended the terms of the KSO Agreement with
respect to Regional Division IV to acquire control of the KSO IV
operations.
32
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TELKOM consolidated the revenues from Regional Division I
(Sumatera) and Regional Division VI (Kalimantan) following their
acquisitions in 2001 and 2002, respectively. TELKOM's
portion of KSO revenues for the last three years
(2003 — 2005) are indicated in the following table:
2003
2004
2005
KSO Division
MTR
DTR
MTR
DTR
MTR
DTR
(Rp. in billion)
(Rp. in billion)
(Rp. in billion)
Division III (West Java and
    Banten)
(1)
242.4
90.0
—
—
—
—
Division IV (Central
    Java)
(2)
404.3
184.6
35.2
15.7
—
—
Division VII (Eastern Indonesia)
253.2
308.4
260.8
333.8
268.6
318.6
Total
899.9
583.0
296.0
349.5
268.6
318.6
(1)
For 2003, MTR and DTR are from January 1 to July 31, 2003.
    TELKOM consolidated Regional Division III (West Java and Banten)
    from July 31, 2003 following the acquisition of a 100%
    equity interest in AriaWest on July 31, 2003. TELKOM
    consolidated Rp.377.9 billion of operating revenues from
    Regional Division III (West Java and Banten) from July 31,
    2003 through December 31, 2003, Rp.1,016.8 billion and
    Rp.1,498.9 billion in 2004 and 2005, respectively.
(2)
On January 20, 2004, TELKOM and MGTI entered into an
    agreement to amend and restate the KSO Agreement with respect to
    Regional Division IV (Central Java). See Item 10.
    "Additional Information — C. Material
    Contracts — PT Mitra Global Telekomunikasi
    Indonesia." As a result of the amended and restated KSO
    agreement, TELKOM acquired Regional Division IV. TELKOM
    consolidated Rp.1,398.0 billion and Rp.1,653.2 billion
    of operating revenues from Regional Division IV (Central Java)
    from February 1, 2004 through December 31, 2004 and in
    2005, respectively. For 2004, MTR and DTR for Regional Division
    IV represent MTR and DTR generated by Regional Division IV in
    January 2004.
The following describes the developments in recent years in
which TELKOM acquired or entered into agreements to acquire
control of its KSO partners in Regional Divisions I, III and VI,
and amended the terms of the KSO Agreement with respect to
Regional Division IV to acquire control of the KSO IV operations.
On April 19, 2002, TELKOM entered into a Conditional Sale
and Purchase Agreement to acquire 100% of the issued and paid up
share capital of its KSO partner in Regional Division I,
Pramindo. Under the terms of the agreement, TELKOM agreed to
acquire the shares of Pramindo in three tranches: in August 2002
(30%), September 2003 (15%) and December 2004 (55%). TELKOM has
provided US$384.4 million in its accounts as the aggregate
consideration for this transaction. Of the
US$384.4 million, TELKOM made an initial payment of
US$9.3 million (Rp.82 billion) in August 2002 and
issued promissory notes (series I and II) dated August 2002
for the remaining amount. The agreement granted the selling
shareholders a number of protective rights and was conditional
upon TELKOM meeting its payment obligations under the promissory
notes. The series I promissory notes had a face value of
approximately US$372.2 million, while the aggregate amount
of the series II promissory notes was estimated to be
approximately US$2.9 million. The promissory notes were
payable in ten unequal quarterly installments through December
2004 which were funded by monthly amounts transferred by TELKOM
to an escrow account. Under the agreement, TELKOM also provided
a loan of US$86 million (Rp.765 billion) to Pramindo
which was used to repay loans from the IFC, one of the selling
shareholders. TELKOM also made an additional payment of
Rp.250 billion in respect of a working capital
reimbursement to the selling shareholders. TELKOM obtained
control of Pramindo as of the closing in August 2002. On
January 28, 2004, TELKOM signed a short-term loan agreement
with ABN AMRO Bank N.V. Jakarta in the amount of approximately
US$130 million and on March 15, 2004 TELKOM used the
loan proceeds to repurchase the outstanding promissory notes
that were due on June 15, 2004, September 15, 2004 and
December 15, 2004. This allowed TELKOM to accelerate the
purchase of the remaining 55% of Pramindo that it did not yet
own. As of the date of this Annual Report, TELKOM beneficially
owns 100% of Pramindo.
On July 31, 2003, TELKOM acquired 100% of the shares of its
KSO partner for Regional Division III, AriaWest for an
aggregate consideration of US$38.67 million in cash
(US$20 million of which was paid when the purchase
agreement was signed on May 8, 2002 and the remaining
US$18.67 million was paid on July 31, 2003) and
US$109.1 million in promissory notes. The promissory notes,
which are interest-
33
Table of Contents
free, are payable in 10 semi-annual installments. At the
same time, in consideration of the release of AriaWest's
outstanding obligations to its lenders, TELKOM also repaid
approximately US$99 million of AriaWest's debt
(including interest of US$25.0 million) on behalf of
AriaWest and entered into a new loan agreement for approximately
US$197 million with AriaWest's lenders. TELKOM and
AriaWest also entered into a settlement agreement settling
claims and disputes involving alleged material breaches of the
KSO Agreement by each party. Pursuant to the settlement
agreement, TELKOM and AriaWest irrevocably settled, discharged
and released claims and counterclaims in their ICC arbitration
proceeding and TELKOM agreed to pay a settlement amount of
US$20 million. As a result of the acquisition of AriaWest
and the settlement of the ICC arbitration in 2002, for the year
ended December 31, 2002 TELKOM reversed the provision of
Rp.511.9 billion which was previously made with respect to
certain receivables from KSO Unit III and accrued the settlement
amount of Rp.179.0 billion in its consolidated financial
statements for the year ended December 31, 2002. The ICC
arbitration proceeding was settled as of July 31, 2003. On
December 30, 2004, TELKOM fully repaid the balance of the
AriaWest loan that it assumed, amounting to
US$151.9 million (including principal due in December 2004
of US$24.6 million and interest of US$4.3 million).
On January 20, 2004, TELKOM and MGTI entered into an
agreement to amend and restate the KSO Agreement with respect to
Regional Division IV. Under the amended and restated KSO
agreement, the rights to operate fixed-line telecommunication
services in KSO IV region are transferred to TELKOM and
KSO IV is operated under the management, supervision,
control and responsibility of TELKOM. In addition, for the
remaining KSO period, TELKOM is entitled at its sole discretion
and expense to construct new telecommunications facilities in
Regional Division IV. MGTI receives fixed monthly payments,
while TELKOM is entitled to the balance of the KSO revenues
after the monthly amounts due to MGTI and operating expenses. If
the KSO IV unit is unable to or does not for any reason pay
MGTI the fixed monthly payments due to it, TELKOM is obligated
to make up any deficiency. At the end of the KSO period
(December 31, 2010), all rights, title and interest of MGTI
in existing property, plant and equipment (including new
additional installations) and inventories shall be transferred
to TELKOM at no cost. As a result of the amended and restated
KSO agreement, TELKOM obtained the legal right to control
financial and operating decisions of Regional Division IV for a
purchase price of US$390.7 million, or
Rp.3,285 billion, which represents the present value of the
fixed monthly payments (totaling US$517.1 million) to be
paid by TELKOM to MGTI from 2004 through 2010 plus direct cost
of the business combination. TELKOM has accounted for this
transaction as a business combination using the purchase method
of accounting in 2004.
On May 17, 2001, TELKOM acquired 90.32% of the issued and
outstanding shares of its KSO partner for Regional Division VI,
Dayamitra, and purchased a call option and granted a put option
with respect to the 9.68% remaining shares of Dayamitra, for an
aggregate consideration of approximately US$130.8 million
(including a US$8.9 million post-closing working capital
adjustment to the purchase price, and excluding
consultants' fees of approximately US$3.3 million,
which was capitalized as part of the acquisition cost) which was
to be paid in installments. TELKOM paid an initial amount of
US$18.3 million on May 17, 2001, the
US$8.9 million post-closing working capital adjustment to
the purchase price on August 10, 2001 and the balance of
US$103.6 million in eight quarterly installments of
approximately US$12.9 million between August 17, 2001
and May 17, 2003. On December 14, 2004, TELKOM
exercised its call option to acquire the remaining 9.68% of the
shares of Dayamitra with a strike price of US$16.2 million.
The purchase price for 9.68% shares of Dayamitra was
US$22.1 million (Rp.203.0 billion), which represents
the present value of the option strike price of
US$16.2 million to be paid to an escrow account from
December 26, 2004 through March 26, 2006, plus the
option purchase price of US$6.3 million and payment for
Dayamitra's adjusted working capital of US$1.0 million.
On June 11, 2002, TELKOM and its KSO partner for Regional
Division VII, PT Bukaka SingTel International ("Bukaka
SingTel"), entered into a Memorandum of Understanding
pursuant to which they agreed to cooperate in providing
infrastructure for fixed wireless access using CDMA 2000 1x in
KSO VII region. On January 14, 2003, TELKOM and Bukaka
SingTel entered into a Co-Operation Agreement on Fixed Wireless
CDMA Facilities Construction in KSO Regional Division VII (the
"Co-
34
Table of Contents
Operation Agreement") that implemented the terms of the
Memorandum of Understanding. Under the terms of the Co-Operation
Agreement, TELKOM, through its Fixed Wireless Division, will
invest US$30.2 million and Rp.28.4 billion for the
construction of fixed wireless CDMA facilities for 146,700 line
units in Denpasar, Makasar, Manado, Kupang and Mataram, which
facilities will be managed, operated and maintained by Bukaka
SingTel. The new facilities are expected to be completed by
2006, with TELKOM and Bukaka SingTel sharing the revenues
generated by these new facilities. See Item 10.
"Additional Information — C. Material
Contracts."
TELKOM consolidated Dayamitra in 2001, Pramindo in 2002 and
AriaWest in 2003, upon acquisition of a majority ownership
interest or control in those KSO partners. In addition, under
the amended and restated KSO Agreement with respect to Regional
Division IV entered into on January 20, 2004, TELKOM
consolidated the operating results of KSO IV from
February 1, 2004, being the nearest convenient balance
date. Accordingly, the revenue sharing percentage in those KSOs
is no longer relevant. As of December 31, 2005, PT Bukaka
SingTel International is the only remaining KSO partner that has
not been acquired or is not controlled by TELKOM. The following
table sets forth certain information regarding KSO VII as of
December 31, 2005, which has been derived from the KSO
Agreements, amendments to the KSO Agreements and other related
sources.
Division VII
KSO Partner
PT Bukaka SingTel International
Shareholders in the KSO partner:
Foreign telecommunications operator
Singapore Telecom International Pte. Ltd. (40.00%)
Indonesian and other shareholders
PT Bukaka Telekomindo International (51.50%); Transpac Capital
    (8.50%)
Revenue Sharing (TELKOM: KSO Partner)
35 : 65
End of KSO Period
2010
Interconnection Services
TELKOM receives revenues from other telecommunications operators
providing fixed line, cellular, international long-distance and
other services that interconnect with TELKOM's network. In
2005, revenues from interconnection services contributed
Rp.7,742.1 billion (US$787.6 million), or 18.5% of
total operating revenues.
TELKOM enters into interconnection agreements with one- to
three-year terms with other telecommunications network
operators, including Indosat and Satelindo, Indonesia's IDD
service providers and cellular operators, establishing the fees
payable by the respective operators and the procedures for
routing calls through the networks of the respective operators.
Most of the short-term (one-year) interconnection agreements are
entered into with telecommunications network operators.
Beginning in 2004, following the merger of Indosat, Indosat
Multi Media Mobile ("IM3") and Satelindo in 2003,
Indosat assumed the obligations of Satelindo and IM3 under their
respective interconnection agreements with TELKOM.
In 2006, as a result of new regulations regarding DLD and IDD
services and the implementation of the cost-based
interconnection scheme, which was promulgated on
February 8, 2006, TELKOM expects to amend all of its
interconnection agreements with other domestic network operators
to adjust, among other provisions, routing procedures, network
configuration and interconnection fees in accordance with the
cost-based interconnection scheme. Accordingly, there can be no
assurance that TELKOM's interconnection revenues and costs
will not change. For further information on the interconnection
scheme, see Item 4. "Information on the
Company — B. Business Overview —
Regulations — Interconnection"; and Item 3.
"Key Information" — D. Risk
Factors — Risks relating to TELKOM and its
subsidiaries — TELKOM operates in a legal and
regulatory environment that is undergoing significant reforms
and such reforms may adversely affect TELKOM's
business".
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Table of Contents
TELKOM's interconnection traffic volumes are set forth in
the following table for the periods indicated:
Year Ended December 31,
2001
2002
2003
2004
2005
(millions of minutes)
Mobile Cellular
    Interconnection
(1)
Incoming paid minutes
2,355.4
2,830.9
3,463.7
4,235.1
4,863.6
Outgoing paid minutes
2,689.3
3,854.5
4,872.1
6,448.0
7,514.9
Fixed Line
    Interconnection
(2)
Incoming paid minutes
115.6
128.4
130.1
136.7
612.3
Outgoing paid minutes
34.7
39.6
30.9
51.1
493.5
Satellite Phone Interconnection
Incoming paid minutes
2.4
12.6
16.1
14.7
10.7
Outgoing paid minutes
0.5
5.6
7.5
8.2
6.5
International
    Interconnection
(3)
Incoming paid minutes
286.8
303.3
444.1
427.6
596.4
Outgoing paid minutes
241.9
200.3
149.7
158.1
185.5
Total
Total Incoming paid minutes
2,760.2
3,275.2
4,054.0
4,814.1
6,083.0
Outgoing paid minutes
2,966.4
4,100.0
5,060.2
6,665.4
8,200.4
(1)
Includes interconnection with Telkomsel.
(2)
Fixed line interconnection minutes reflect interconnection with
    the networks of PT Bakrie Telecom (formerly PT Radio Telepon
    Indonesia or Ratelindo), PT Batam Bintan Telekomunikasi, and for
    2004 and 2005, Indosat.
(3)
International interconnection minutes are derived from
    interconnection with Indosat's international network and,
    starting 2004, incoming and outgoing calls using TIC 007 as well.
TELKOM's paid minutes from Telkomsel for 2001 —
2005 are set forth in the following table.
Year Ended December 31,
2001
2002
2003
2004
2005
(millions of minutes)
Incoming paid minutes
1,289.9
1,672.6
2,011.8
2,354.1
2,709.1
Outgoing paid minutes
1,266.0
2,001.6
2,610.3
3,422.1
4,251.5
On June 7, 2004, TELKOM began offering IDD fixed line
services under the brand name "TIC 007." Revenues from
IDD services are reported as international interconnection
revenues. In order to facilitate interconnection of
international calls, TELKOM has entered into international
telecommunications service agreements with telecommunications
operators in several countries. In addition, as TELKOM does not
have agreements with telecommunication operators in each of its
IDD destinations, TELKOM has entered into agreements with
certain major carriers such as Singapore Telecommunications
Limited ("SingTel"), Telekom Malaysia Berhad
("Telekom Malaysia"), MCI Inc. ("MCI") and
others for such operators to act as hubs to route international
calls to their destinations.
Network Services
TELKOM provides satellite transponder leasing, satellite
broadcasting, VSAT, audio distribution, satellite-based leased
lines and terrestrial-based leased lines. In 2005, revenues from
network services contributed Rp.586.6 billion
(US$59.7 million), or 1.4% of total operating revenues.
TELKOM's customers for network services include businesses
and other telecommunications operators. Customers may enter into
agreements that can be for services as brief as a few minutes in
the case of broadcasts or long-term agreements for services over
the course of one to five years.
36
Table of Contents
Data and Internet Services
TELKOM provides SMS for fixed line, fixed wireless and cellular
phones, dial-up and broadband Internet access, data network
services (including VPN frame relay and IP VPN), VoIP services
for international calls, ISDN lines and other multimedia
services. In 2005, revenues from data and Internet services
contributed Rp.6,934.3 billion (US$705.4 million), or
16.6% of total operating revenues.
In October 2004, TELKOM introduced a premium prepaid dial-up
Internet access service. In 2005, an average of approximately
500,000 telephone subscribers accessed its TELKOMNet Instan and
premium prepaid dial-up Internet service per month, representing
an increase of 10% over the prior year. Subscribers utilized a
total of 2.8 billion minutes of TELKOMNet Instan and
877,921 minutes of premium prepaid dial-up service in 2005. As
of December 31, 2005, TELKOM also had 30,622 broadband
Internet access subscribers, which was available in Jakarta and
Surabaya.
In September 2002, TELKOM began offering a premium VoIP
international calling service under the name
"TELKOMGlobal-017" and a standard VoIP international
calling service under the name "TELKOMSave" and TELKOM
is currently providing both services in several cities in
Indonesia, including Jakarta, Surabaya, Bandung, Medan and
Denpasar. As of December 31, 2005, TELKOM's VoIP
services allowed subscribers access to 633 destination points in
236 countries through agreements which TELKOM has entered into
with eight global carriers (including two global carriers for
outgoing only, three global carriers for incoming only and three
global carriers for incoming and outgoing) and wholesalers that
allow TELKOM to access their international networks. VoIP is a
low-cost phone service that is accessed by dialing a special
international long-distance prefix. On March 11, 2004, the
MoC issued Decree No. 28/2004 and Decree No. 31/2004,
which stated that VoIP access codes must be changed from three
digits to five digits ("010XY"), and on April 1,
2005, the MoCI announced that the five digit VoIP access codes
must be implemented by all operators by December 31, 2005.
On May 17, 2005, MoCI Regulation No. 7/2005 was
ratified, which changes the VoIP access codes to
(i) "010XY" for single stage method; and (ii)
"170XY" for double stage method, respectively,
effective January 1, 2006. The single stage method refers
to direct dialing services without subscription validation. The
double stage method refers to direct dialing services whereby
subscription validation is required before dialing the
destination number. As at January 2006, the access codes for
TELKOM's VoIP service are "017" for single stage
and "17017 (prepaid) and 17071 (postpaid)" for double
stage.
The Company plans to increase the number of access points in
Indonesia and abroad from which its customers are able to access
its VoIP services. In 2005, there was a total of
300.6 million outgoing (using either TELKOMSave or
TELKOMGlobal) and incoming (from TELKOM's global partners)
VoIP minutes called, representing an increase in VoIP minutes
called of 11.6 million, or 4.0%, over the prior year.
Incoming VoIP minutes called increased by 21.0% from
178.2 million minutes in 2004 to 215.6 million in
2005. However, outgoing VoIP minutes called decreased by 23.3%
from 110.8 million minutes in 2004 to 85.0 million
minutes in 2005. VoIP revenues (consisting of incoming and
outgoing) decreased by Rp.26.2 billion, or 8.2%, in 2005,
principally due to a 27.8% decrease in traffic of outgoing
international VoIP calls, primarily resulting from TELKOM's
focused marketing efforts to promote TELKOM's IDD service
(TIC-007),
an
alternative to VoIP.
Certain information about TELKOM VoIP services is set forth in
the following table:
Item
TELKOMGlobal 017
TELKOMSave
Tariff
Discount up to 40% of normal IDD rate
Discount up to 60% of normal IDD rate
Dial
One stage
Two stage
Quality/Technology
Premium VoIP
Standard VoIP
Revenue-Sharing Arrangements
(PBHs)
TELKOM has entered into separate agreements with several
investors under revenue-sharing arrangements to develop fixed
lines, public card-phone booths (including their maintenance) and
37
Table of Contents
related supporting telecommunications facilities. In 2005,
revenues from revenue-sharing arrangements amounted to
Rp.302.3 billion (US$30.8 million), or 0.7% of
TELKOM's total operating revenues.
As of December 31, 2005, the Company has 90 revenue-sharing
arrangements with 63 partners. The revenue-sharing
arrangements were located mostly in Palembang, Pekanbaru,
Jakarta, East Java and Kalimantan with concession periods
ranging from 16 to 176 months.
Under the revenue-sharing arrangements, the investors finance
the costs incurred in constructing telecommunications
facilities. Upon completion of the construction, the Company
manages and operates the facilities and generally bears the cost
of repairs and maintenance during the revenue-sharing period.
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.
Generally, the revenues earned from the customers in the form of
line installation charges are allocated in full to the
investors. The revenues from outgoing telephone pulses and
monthly subscription charges are shared between the investors
and the Company based on certain agreed ratios.
Under revenue-sharing arrangements entered into before October
2002, TELKOM guaranteed a specific internal rate of return to
the investors. However, since October 2002, TELKOM no longer
guarantees an internal rate of return for new revenue sharing
arrangements it enters into. In February 2004, TELKOM began
implementing its PPLT program in the Regional Divisions that it
controls. Pursuant to the PPLT program, division heads are
allowed to enter into agreements for the development of
telecommunications facilities with partners within each regional
division. In deciding what agreements to enter into, division
heads are required to consider certain business factors and act
within specified parameters. Priority is also given to the
development of CDMA facilities.
To date, TELKOM has entered into 32 PPLTs for fixed wireless
services and 53 PPLTs for fixed wireline services.
Other Services
TELKOM also provides a variety of other services, such as:
•
telephone directory, which TELKOM provides through its
    majority-owned subsidiary, Infomedia;
•
cable and pay television and related services, which it provides
    through its majority-owned subsidiary, Indonusa; and
•
telex and telegram services.
In 2005, revenues from other services amounted to
Rp.301.0 billion (US$30.6 million), or 0.7% of
TELKOM's total operating revenues.
Network Infrastructure
Fixed line Network and
Backbone
Fixed Wireline Network.
TELKOM's fixed line network
comprises a hierarchy of exchanges ranging from local exchanges
through trunk exchanges. Each local exchange is connected to the
subscriber's premises by equipment and facilities called
outside plant. Outside plant includes wireline (optical fiber
and copper) and wireless local transmission links and the
distribution facilities joining them. All of TELKOM's
switching facilities at the local and trunk exchanges are now
digital. TELKOM believes that this substantially increases
network efficiency, performance and call routing flexibility.
TELKOM's total number of fixed wireline lines in service in
all divisions, including those lines in KSO VII which are owned
by the KSO VII partner and will be transferred to TELKOM at
the end of the
38
Table of Contents
KSO period, has increased from approximately 8.6 million as
of December 31, 2004 to approximately 8.7 million as
of December 31, 2005.
The following table sets forth statistics relating to
TELKOM's fixed wireline network since 2001:
As of or for the Year Ended December 31,
Operating Statistics
2001
(1)
2002
(2)
2003
(3)
2004
(4)
2005
(4)
Exchange capacity
Non-KSO Divisions
5,135,108
6,643,688
7,810,766
8,786,887
9,138,167
KSO
    Divisions
(9)
3,669,336
2,459,950
1,608,455
954,465
1,045,366
Total
8,804,444
9,103,638
9,419,221
9,741,352
10,183,533
Installed lines
Non-KSO Divisions
4,725,268
6,157,149
7,235,035
8,264,999
8,497,255
KSO
    Divisions
(9)
3,316,406
2,234,892
1,548,070
931,999
998,901
Total
8,041,674
8,392,041
8,783,105
9,196,998
9,496,156
Lines in
    service
(5)
Non-KSO Divisions
4,270,243
5,701,900
6,792,300
7,714,977
7,787,693
KSO
    Divisions
(9)
2,948,695
2,039,608
1,422,028
844,373
898,438
Total
7,218,938
7,741,508
8,214,328
8,559,350
8,686,131
Subscriber lines
Non-KSO Divisions
4,005,106
5,386,430
6,441,973
7,323,304
7,413,769
KSO
    Divisions
(9)
2,831,168
1,952,226
1,365,114
816,208
869,631
Total
6,836,274
7,338,656
7,807,087
8,139,512
8,283,400
Public telephones
Non-KSO Divisions
265,137
315,470
350,327
391,673
373,924
KSO
    Divisions
(9)
117,527
87,382
56,914
28,165
28,807
Total
382,664
402,852
407,241
419,838
402,731
Leased lines in service
Non-KSO
    Divisions
(6)
4,973
8,193
8,213
8,887
11,333
KSO
    Divisions
(9)
2,631
1,879
1,162
382
575
Total
7,604
10,072
9,375
9,269
11,908
Fixed wireline subscriber pulse
    production
(7)
(millions)
Non-KSO Divisions
34,342
44,326
50,848
58,314
57,926
KSO
    Divisions
(9)
24,047
16,788
11,413
6,838
9,743
Total
58,389
61,114
62,261
65,152
67,669
Call completion rate (%)
Local
Non-KSO Divisions
75.8
75.8
76.8
78.6
80.4
KSO
    Divisions
(9)
72.5
75.5
78.4
77.9
80.8
Combined
73.9
75.6
77.3
78.5
80.4
Domestic long-distance
Non-KSO Divisions
65.4
65.5
67.5
70.9
74.0
KSO
    Divisions
(9)
85.6
68.1
74.7
74.9
75.8
Combined
65.7
66.6
69.5
71.5
74.3
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Table of Contents
As of or for the Year Ended December 31,
Operating Statistics
2001
(1)
2002
(2)
2003
(3)
2004
(4)
2005
(4)
Fault
    rate
(8)
Non-KSO Divisions
0.8
4.6
4.4
3.4
3.8
KSO
    Divisions
(9)
3.1
8.9
3.5
1.9
2.0
Combined
3.9
5.2
4.1
3.2
3.6
(1)
For 2001, Non-KSO Divisions refer to Divisions II, V and
    VI, while KSO Divisions refer to Divisions I, III, IV and
    VII.
(2)
For 2002, Non-KSO Divisions refer to Divisions I, II, V and
    VI, while KSO Divisions refer to Divisions III, IV and VII.
(3)
For 2003, Non-KSO Divisions refer to Divisions I, II, III,
    V and VI, while KSO Divisions refer to Divisions IV and VII.
(4)
For 2004 and 2005, Non-KSO Divisions refer to Divisions I,
    II, III, IV, V and VI, while KSO Divisions refer to
    Division VII.
(5)
Lines in service are comprised of subscriber lines and public
    telephone lines and include the following number of lines in
    service operated by TELKOM pursuant to revenue-sharing
    arrangements. Such lines in service under revenue-sharing
    arrangements amounted to 430,477, 443,316, 511,108, 396,926 and
    201,485 as of December 31, 2001, 2002, 2003, 2004 and 2005,
    respectively.
(6)
Excludes leased lines for TELKOM's network and multimedia
    businesses.
(7)
Consists of pulses generated from local and domestic
    long-distance calls, excluding calls made from pay phones and
    mobile cellular phones.
(8)
Faults per 100 connected lines per month. The calculation
    formula was changed in January 2002 to include indoor
    installation and mass fault. The previous measure of fault
    consisted of exchange and outdoor cable fault.
(9)
Divisions classified as KSO Divisions differ year by year due to
    acquisitions in certain years. See footnotes (1) to
    (4) above.
The following table sets forth certain information relating to
the Company's (including KSOs) fixed line network in each
of its operating divisions as of December 31, 2005:
Division III
(West Java
Division IV
Division VII
Division I
Division II
and
(Central
Division V
Division VI
(East
(Sumatra)
(Jakarta)
Banten)
Java)
(East Java)
(Kalimantan)
Indonesia)
Total
Local exchange capacity
1,718,298
4,143,568
1,361,042
1,336,697
2,528,891
737,019
1,375,074
13,200,589
Total lines in service
1,921,532
3,856,340
1,095,093
1,182,022
2,806,761
676,766
1,209,484
12,747,998
Capacity
    utilization (%)
(1)
111.83
93.07
80.46
88.43
110.99
91.82
87.96
96.57
Installed
    lines
(2)
1,910,363
4,081,046
1,345,872
1,273,593
2,458,347
760,927
1,339,469
13,169,617
Utilization
    rate (%)
(1)
100.58
94.49
81.37
92.81
114.17
88.94
90.30
96.80
Employees
(3)
3,740
6,548
1,967
2,020
2,757
956
3,213
21,201
Population
    (millions)
(4)
55.14
30.72
26.94
46.90
38.89
14.54
33.73
246.86
TELKOM line penetration (%)
(5)
3.48
12.55
4.07
2.52
7.22
4.66
3.59
5.16
(1)
Capacity utilization (lines in service/exchange capacity) and
    utilization rate (lines in service/installed lines) consist of
    fixed wireline and fixed wireless. The rate can exceed 100%
    since the exchange capacity in fixed wireless (MSC and BTS) is
    calculated by assuming traffic allocation per subscriber of
    60 mE (mili Erlang).
(2)
Total for 2005 includes 130,947 fixed wireless line units
    established under RSA scheme.
(3)
Does not include employees for support divisions, such as
    TELKOM's long distance, fixed wireless, multimedia and
    construction divisions.
(4)
Source
: Indonesian Central Bureau of Statistics
    (estimated figures).
(5)
TELKOM's penetration based on the estimated population
    figures.
Fixed Wireless Network.
TELKOM's fixed wireless
network comprises a hierarchy of exchanges originating from MSC
(Mobile Switching Center) and connecting with each other through
trunk exchanges. Each MSC is connected to BSS (Base Station Sub
System) that comprises BSC (Base Station Controller) and BTS
(Base Transceiver Station), which connect equipment at a
customer's premises (handheld device and fixed wireless
terminal) to TELKOM's fixed wireless network.
TELKOM's total number of fixed wireless lines in service
has increased from approximately 1.4 million as of
December 31, 2004 to approximately 4.1 million as of
December 31, 2005.
40
Table of Contents
The following table sets forth statistics relating to
TELKOM's fixed wireless network since 2002:
As of or for the Year Ended December 31,
2002
(1)
2003
(2)
2004
(3)
2005
(3)
Exchange capacity
    (MSC)
(7)
Non-KSO Divisions
—
666,050
1,952,644
2,687,348
KSO
    Divisions
(6)
—
61,550
179,700
329,708
Total
—
727,600
2,132,344
3,017,056
Installed lines
    (BTS)
(7)
Non-KSO Divisions
8,621
659,497
2,291,212
3,332,893
KSO
    Divisions
(6)
—
116,150
179,717
340,568
Total
8,621
775,647
2,470,929
3,673,461
Lines in
    service
(4)
Non-KSO Divisions
8,527
237,749
1,317,673
3,750,821
KSO
    Divisions
(6)
—
27,038
111,695
311,046
Total
8,527
264,787
1,429,368
4,061,867
Subscriber lines
Non-KSO Divisions
8,510
237,200
1,313,978
3,739,095
KSO
    Divisions
(6)
—
27,038
111,695
311,046
Total
8,510
264,238
1,425,673
4,050,141
Public telephones
Non-KSO Divisions
17
549
3,695
11,726
KSO
    Divisions
(6)
—
—
—
—
Total
17
549
3,695
11,726
Fixed wireless subscriber pulse production/ minutes
    production
(5)(8)
(millions)
Non-KSO Divisions
14
214
989
3,254
KSO
    Divisions
(6)
—
4
125
299
Total
14
218
1,114
3,553
(1)
For 2002, Non-KSO Divisions refer to Divisions I, II, V and
    VI, while KSO Divisions refer to Divisions III, IV and VII.
(2)
For 2003, Non-KSO Divisions refer to Divisions I, II, III,
    V and VI, while KSO Divisions refer to Divisions IV and VII.
(3)
For 2004 and 2005, Non-KSO Divisions refer to Divisions I,
    II, III, IV, V and VI, while KSO Divisions refer to
    Division VII.
(4)
Lines in service are comprised of subscriber lines and public
    telephone lines and include the lines in service operated by
    TELKOM pursuant to the revenue-sharing arrangements. Such lines
    in service under revenue-sharing arrangements amounted to 8,208,
    63,005 and 130,947 as of December 31, 2003, 2004 and 2005,
    respectively.
(5)
Fixed wireless usage was measured in subscriber pulse before
    2004, and in minutes beginning 2004 due to the installation of
    new equipment. Therefore, fixed wireless usage beginning 2004
    and prior to 2004 are not comparable.
(6)
The number of divisions classified as KSO Divisions varies year
    to year due to KSO acquisitions in certain years. See footnotes
    (1) to (3) above.
(7)
The capacity of BTS and MSC are calculated by assuming traffic
    allocation per subscriber to be 60 mE (mili Erlang). However,
    the average traffic used per subscriber in 2005 was only 18 to
    30 mE. Therefore, the capacity of BTS and MSC can
    accommodate more than 6 million subscribers, respectively.
(8)
Consists of minutes usage generated from local and domestic
    long-distance calls, excluding calls made from pay phones and
    mobile cellular phones.
TELKOM began offering a limited mobility CDMA-based fixed
wireless phone service under the brand name
"TELKOMFlexi" in December 2002. For more information
on TELKOMFlexi, see Item 4. "Information on the
Company — B. Business Overview —
General — Fixed Wireless Services". As of
December 31, 2005, TELKOM had 4,061,867 TELKOMFlexi lines
in service (consisting of 3,930,920 lines in service in non-RSA
areas and 130,947 lines in service in RSA areas).
Backbone.
TELKOM's telecommunications network
consists of transmission and switching facilities connecting
several network access nodes. The transmission links between
nodes and switching facilities include microwave, submarine
cable, satellite, optical fiber and other transmission
technology.
41
Table of Contents
The following table sets forth certain information on the
transmission capacity of TELKOM's backbone transmission
facilities as of December 31, 2005.
Capacity
Percentage
(number of Transmission
of total
medium circuits)
capacity
Optical fiber cable
13,827
71.17
Microwave
3,682
18.95
Submarine cable
1,562
8.04
Satellite
357
1.84
Total
19,428
100.00
For more information on TELKOM's satellites, see
"Other Network Infrastructure" below.
Mobile Cellular
Network
Telkomsel.
Since its incorporation in 1995, Telkomsel has
been providing GSM cellular services throughout Indonesia
through its own network. Telkomsel has the largest network
coverage of any of the cellular operators in Indonesia,
providing coverage to over 90% of Indonesia's population,
including all counties in Indonesia and all sub-counties in Java
and Bali. Telkomsel currently operates a nationwide GSM/DCS
cellular network using a total of 30 MHz of radio frequency
bandwidth. This consists of 7.5 MHz in the 900 MHz
band and 22.5 MHz in the 1800 MHz band. Both networks
operate as a single integrated dual band network. Telkomsel has
rolled out GPRS services nationwide since October 2002. In
February 2004, Telkomsel introduced an enhanced data
transmission technology known as "EDGE," or Enhanced
Data rates for GSM Evolution, which offers enhanced data
transmission speeds for handsets equipped to handle EDGE. As of
December 31, 2005, EDGE was available in Jakarta, Surabaya,
Batam, Semarang and Bali.
The Telkomsel network is an integrated network of (i) base
transceiver stations containing transmitters, receivers and
other equipment that communicate by radio signals with cellular
telephone handsets within the range of the base transceiver
station, (ii) digital switch centers that route calls to
the proper destinations and (iii) transmission facilities
that link the digital switch centers to other cell sites. The
various components of the network are connected primarily by
microwave transmission, trunk lines owned by Telkomsel and other
fixed lines. In addition, through agreements with TELKOM,
Telkomsel leases certain of TELKOM's facilities, including
leased lines, integrated management system and information
system facilities, land, sites and towers. As of
December 31, 2005, Telkomsel's digital network had
9,895 BTSs, 71 cellular switching centers, 259 base station
controllers and 79,912 transmitting and receiving exchanges,
with an overall network capacity capable of supporting
26.2 million subscribers.
For each of the years ended December 31, 2003, 2004 and
2005 Telkomsel made capital expenditures for the development and
expansion of its cellular network of approximately
Rp.5,348.8 billion, Rp.4,982.7 billion and
Rp.10,085.7 billion (US$1,026.0 million), respectively.
Prior to 2002, TELKOM (through its business division, TELKOM
Mobile) and Telkomsel, had been independently working on the
construction of separate DCS 1800 networks. TELKOM had been
granted 15 MHz of radio frequency bandwidth in the 1800 MHz
band. In January 2002, Telkomsel entered into a
co-operation
agreement
with TELKOM (the "Telkomsel Co-operation Agreement"),
the purpose of which was to set the framework for the transfer
of TELKOM's mobile telecommunications business and its
DCS 1800 license to Telkomsel and for Telkomsel to assume
certain obligations and assets of TELKOM connected with the DCS
1800 network, including the assumption of TELKOM's rights
and obligations under a supply contract with Siemens. On
April 3, 2002, pursuant to the Telkomsel
Co-operation
Agreement,
Telkomsel purchased TELKOM's assets relating to TELKOM
Mobile and TELKOM transferred its TELKOM Mobile employees to
Telkomsel. Telkomsel also assumed all of TELKOM's rights
and obligations under various contracts connected with its
TELKOM Mobile business.
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Table of Contents
Pursuant to the terms of the Telkomsel Co-operation Agreement,
TELKOM undertook to have its DCS 1800 license cancelled and
re-issued to Telkomsel so that Telkomsel would have 15 MHz of
radio frequency in addition to its own 7.5 MHz of radio
frequency in the 1800 MHz band. The MoC re-issued the license to
Telkomsel on July 12, 2002.
Data and Internet
Network
TELKOM began operating data network services in 1997 and has
since continued to develop and expand its network progressively.
As of December 31, 2005, TELKOM's
IP-based
network
covered 127 cities nationwide with routers in 174 nodes
nationwide. TELKOM will continue to expand its
IP-based
network
shifting its primary revenue source from narrowband services to
broadband services. The
IP-based
network serves
as the backbone network for high quality VPNs, VoIP and for
Internet service providers. TELKOM has remote access servers in
98 locations with 145 nodes in Indonesia used for its
"TELKOMNet Instan"
dial-up
Internet
services. For corporate customers requiring high performance and
secured virtual private networks, TELKOM provides a premium
service known as VPN Frame Relay.
Since 2004, TELKOM has provided fixed-line based broadband
access services under the brand name "Speedy". As of
December 31, 2005, there were over 30,000 subscribers in
the areas where such services were available, such as Jakarta,
Surabaya and Makasar. TELKOM expects the subscriber base of
Speedy to grow significantly over the next 12 months.
"Speedy" is currently available in Division II
(Jakarta), Division V (Surabaya) and Division VII and
is expected to cover all of Divisions I to VII by the end
of 2006. Subscribers of Speedy typically are residential dial-up
users with a monthly usage of more than Rp.250,000, small
office/home office ("SOHO") companies, travel agents,
Internet cafe and schools.
International Network
TELKOM received its commercial license from the Government to
provide IDD services on May 13, 2004 and began offering IDD
fixed line services under the brand name "TIC 007" on
June 7, 2004. According to an internal study, TELKOM's
current market share in terms of call volume in this market is
52%. To route outgoing IDD and incoming international calls,
TELKOM has three international gateways, in Batam, Jakarta and
Surabaya. At present, TELKOM has no intention to develop any new
gateways. According to a study conducted by TELKOM in September
2005, three gateways are sufficient to accommodate TELKOM's
international call volume. Nonetheless, TELKOM plans to improve
the capacities of each gateway and the bandwidth of its
international links.
To connect its domestic network to the global network, TELKOM
primarily relies on the following microwave, international cable
and satellite links: (i) microwave link between Batam and
Johor (Malaysia); (ii) TIS (Thailand-Indonesia-Singapore)
cable system, which is an international submarine fiber optic
cable system deployed by TELKOM, SingTel and CAT Telecom Public
Company Limited and completed in November 2003, which connects
Indonesia (Batam), Singapore (Changi) and Thailand (Songkhla)
and was extended to Hong Kong in July 2004; (iii) Intelsat
satellites. TELKOM completed developing the ground segment to
link its network to the Intelsat satellites in December 2004;
and (iv) Dumai Melaka cable system, which is an
international submarine fiber optic cable system deployed by
TELKOM and Telekom Malaysia to connect Dumai (Indonesia) to
Melaka (Malaysia) and completed in December 2004. These multiple
international links provide flexibility for TELKOM to
interconnect with foreign operators.
In order to facilitate interconnection of international calls,
TELKOM has entered into international telecommunications service
agreements with telecommunications operators in several
countries. In addition, as TELKOM does not have agreements with
telecommunication operators in each of its IDD destinations,
TELKOM has entered into agreements with SingTel, Telekom
Malaysia, MCI and other entities for such operators to act as
hubs to route international calls to their destinations. TELKOM
plans to enter into additional international telecommunications
service agreements with telecommuni-
43
Table of Contents
cations operators for direct interconnection, particularly
operators in the top 20 destinations for its outgoing IDD
traffic.
Other Network Infrastructure
As of December 31, 2005, the Company also operated the
TELKOM-1 and
TELKOM-2
satellites and 199 earth stations, including one satellite
control system. TELKOM-1 has 36 transponders including 12
extended
C-band
transponders and 24 standard
C-band
transponders and
TELKOM-2
has 24
standard
C-band
transponders. TELKOM uses its satellites for the following
purposes:
•
Network backbone transmission;
•
Rural telecommunications services;
•
Back-up transmission capacity for the national
    telecommunications network;
•
Satellite broadcasting, VSAT and multimedia services;
•
Satellite transponder capacity leasing;
•
Satellite-based lease line; and
•
Teleport (earth station satellite uplinking and downlinking
    services to and from other satellites).
Network Development
Fixed line Network
Development
1. Fixed Wireline Network
Development
In 2004, TELKOM substantially completed the expansion of its
Java fiber optic backbone. TELKOM entered into an agreement on
June 10, 2005 with a consortium consisting of NEC
Corporation and PT Siemens Indonesia to further develop its
Java-Sumatra-Kalimantan network by the end of 2006.
TELKOM also had several network developments projects that were
ongoing as of December 31, 2005, which included the
development of:
•
fiber optic backbone infrastructure in Kalimantan (Borneo) from
    Banjarmasin to Samarinda;
•
fiber optic backbone infrastructure in Sulawesi from Makasar to
    Palu;
•
fiber optic regional junction in greater Jakarta, Surabaya (East
    Java) and Bandung — Cirebon (West Java);
•
IP DSLAM project offering broadband access to all users in
    Indonesia;
•
submarine cable system between Jakarta and Batam which
    facilitates the connection between domestic link and
    international link;
•
transmission backbone infrastructure for Java island;
•
IP-based network; and
•
installation of Softswitch Class 4 in Jakarta, Bandung,
    Semarang and Surabaya to replace the outmoded TDM switch.
To further develop its communications services, TELKOM also
plans to:
•
continue to implement soft switch technologies to move towards a
    next generation network;
•
continue to enhance its network through the progressive
    replacement of its old copper access network with optical access
    network; and
•
continue network integration and quality improvement.
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Table of Contents
2. Fixed Wireless Network
Development
TELKOM continues to develop and expand its network
infrastructure. TELKOM signed agreements with a consortium led
by Samsung Electronics Co. Ltd. in December 2002, with a
consortium led by Ericsson in December 2002, with
Motorola, Inc. in March 2003, and with PT INTI in August
2003, for the development of a total of 1,656,300 base station
subsystem lines and network and switching subsystem lines based
on CDMA fixed wireless technology. These projects were to be
completed by mid-2006 but were accelerated and completed in 2005
to satisfy increasing market demand. See Item 10.
"Additional Information — C. Material
Contracts." TELKOM also had several on-going network
development projects as of December 31, 2005, which
included the development of fixed wireless services in
forty-four locations, consisting of forty locations in Jakarta,
two locations in Sumatera and two locations in Sulawesi.
Mobile Cellular Network
Development
In 2004, Telkomsel extended its GSM coverage to cover all
counties in Indonesia. It also continued to improve the quality
of its coverage in Jakarta, Surabaya and other major cities
through the addition of microcells and expansion of its fiber
optic transmission backbone. In 2005, Telkomsel added, among
other equipment, 3,690 BTSs and 30,580 transmitting and
receiving exchanges, thereby expanding its cellular network to
cover the entire areas of Java and Bali. Telkomsel plans to
continue to install additional BTSs to further expand its
coverage, further expand its fiber optic transmission backbone
for major cities in Java, install additional microcells and
install additional transmitting and receiving exchanges,
particularly in provincial areas, to further improve the quality
of its coverage, upgrade its switching equipment to increase
network capacity, and expand its intelligent network used in
connection with its prepaid products.
Data Network
Development
In 2005, TELKOM continued to improve the quality of its data
network by adding capacity and coverage, increasing the capacity
and coverage area of its network management system, as well as
improving its billing system, security and access to its data
network. TELKOM developed IP core network in 15 cities to
support the soft switch implementation, increased the number of
Backbone nodes in 114 locations to 326 locations and
raised the internet gateway capacity to 600 Mbps. It also
extended the coverage for TelkomNet Instan and VPN Dial services
in 53 locations in Sumatera as well as Eastern Indonesia
and developed Host to Host in 28 banks, enabling customers to
pay their phone bills using ATM machines. TELKOM also expanded
the coverage of its high performance IP backbone and related IP
infrastructure to increase its IP traffic capacity. TELKOM
appointed a consortium consisting of Juniper Networks (Hong
Kong), Ltd, PT Siemens Indonesia and PT Datacom Diangraha
to develop its IP core network for Rp.29.8 billion, through
a letter agreement in December 2004 and formalized by a contract
dated April 1, 2005. The project was awarded after holding
an e-auction, and was completed in December 2005.
In 2005, TELKOM also improved the quality and coverage of its
broadband Internet access network by continuing to expand its
ADSL broadband access network, which currently covers
Division II (Jakarta) and Division V (East Java).
TELKOM deployed a nationwide ADSL broadband Internet access
network, and entered into a contract for the development of this
network. Due to an insufficient customer base for ADSL broadband
access network services, however, the expansion was not
completed in the third quarter of 2005 as originally scheduled,
except for Division VII. In February 2004, TELKOM launched
a quality enhancement program for the broadband access network
called the "JAWARA Broadband" program to modernize the
broadband access networks of TELKOM and improve the quality of
such access networks. In 2005, the program resulted in an
increase in the number of broadband access networks supported by
xDSL broadband internet service by 26%.
45
Table of Contents
TELKOM-2
Satellite
TELKOM signed a US$73.1 million contract with Orbital
Sciences Corporation to build the
TELKOM-2
satellite
based on Orbital's
STAR-2
platform, to
replace TELKOM's Palapa
B-4
satellite, which
was taken out of service in August 2005. The
TELKOM-2
satellite has
a capacity of 24 standard
C-band
transponders,
with transponder specifications similar to those of the TELKOM-1
satellite. TELKOM-2 has a 15 years
in-orbit
life and is
expected to provide increased coverage of the Asian region and
the Indian subcontinent compared to Palapa
B-4.
TELKOM believes
that the satellite will support TELKOM's network for voice,
video and data communications.
On November 8, 2002, TELKOM signed a US$62.9 million
agreement with Arianespace S.A., which covers the cost of
launching
TELKOM-2.
TELKOM launched
TELKOM-2
on
November 17, 2005.
Capital Expenditures
For more information on TELKOM's principal capital
expenditures, see Item 5. "Operating and Financial
Review and Prospects — B. Liquidity and Capital
Resources — Capital Expenditures".
Business Strategy
TELKOM's objective is to become a leading full
telecommunication services and network company in Indonesia
providing a wide range of communications services. The
Company's vision is to become a leading "InfoCom"
player in the region, with a mission to provide one-stop
services with excellent quality and competitive prices to
customers and to manage its business using best practices,
utilizing competitive advantages and maximizing synergies.
TELKOM believes that Indonesia's telecommunications market
remains underdeveloped with low penetration rates for both fixed
lines and mobile cellular lines compared to other countries in
Southeast Asia. TELKOM believes that the strong demand for
telecommunications services has largely been responsible for the
growth of its fixed line and wireless business in recent years
and will continue to offer favorable growth opportunities in the
future. TELKOM expects that fixed line and wireless services
will continue to contribute the substantial majority of its
operating revenues in the near term. It has developed broad
strategies to retain its existing customers, to acquire new and
lost customers and to further penetrate the market through
customer relationship management (such as the setting up of its
enterprise service division and account management teams),
product leadership and diversification, competitive pricing and
one-gate distribution channels.
The key elements of TELKOM's strategy are:
Strengthening the Fixed
Wireline and Fixed Wireless Business
Indonesia has one of the lowest fixed line penetration rates in
Southeast Asia. As of December 31, 2005, a majority of
total lines in service were in the major metropolitan areas of
Jakarta, Surabaya, Semarang, Bandung, Medan and Denpasar.
TELKOM aims to strengthen its fixed wireline and fixed wireless
business by:
•
increasing its fixed line penetration rate more quickly and with
    lower capital expenditure per line through the rapid roll-out of
    fixed wireless technology, revenue sharing arrangements, new
    partnership agreements and pay as you grow schemes;
•
increasing the use of TELKOMFlexi and value added services;
•
strengthening its interconnection business by establishing a
    service center dedicated to telecommunications operators and
    other interconnection customers, opening more gateways to other
    telecommunications operators, offering more attractive pricing
    and providing enhanced billing services;
46
Table of Contents
•
strengthening PlasaTELKOM as a point of sale for TELKOM's
    services; and
•
developing and expanding its IDD fixed line business, which
    TELKOM began offering to customers on June 7, 2004.
Strengthening its Backbone
Network
In order to provide a better quality of service to its
customers, TELKOM intends to continue to increase the capacity,
coverage and quality of its network by, among other things,
using an optical network for high speed backbone transmission
infrastructure such as its Java optical backbone, HPBB Sumatera
(2002-2003),
Trans
Borneo and Trans Sulawesi
(2004-2005)
and by its
launch of the new TELKOM-2 satellite to replace the Palapa B-4
satellite. In addition, TELKOM aims to manage synergies among
utility providers in order to enhance backbone capacity and
access network penetration, expanding its optical network,
upgrading to a next generation network with the installation of
advanced switching systems, constructing international microwave
and submarine links and upgrading its systems to provide
integrated billing for new services.
Maintaining Telkomsel's
Leading Position in the Industry
The Company regards the cellular business as having the greatest
opportunity for revenue growth. The Company provides its
cellular services through Telkomsel, a market leader in the
cellular business in Indonesia. Based on industry statistics,
Telkomsel had an estimated market share as of December 31,
2005 of approximately 52% of the GSM cellular market,
maintaining its position as the largest nationwide licensed GSM
cellular operator in Indonesia and representing a slight
decrease from its estimated market share of 54% as of
December 31, 2004. TELKOM intends to promote the further
development of Telkomsel's business by, among other things,
offering bundling of and
one-stop
shopping for,
TELKOM's and Telkomsel's products and services, and
expanding Telkomsel's network capacity to enable Telkomsel
to meet the projected needs of its customer base through 2006.
In order to focus on Telkomsel and GSM technology, TELKOM has
sold its interests in cellular operators PT Telekomindo
Selular Raya ("Telesera"), PT Metro Selular Nusantara
("Metrosel") and PT Komunikasi Selular Indonesia
("Komselindo") which utilize analog and other first
generation non-GSM technologies.
TELKOM believes that the 35% equity interest of Singapore
Telecom Mobile Pte Ltd ("SingTel Mobile") in Telkomsel
increases Telkomsel's ability to access SingTel
Mobile's technological and commercial expertise in the
cellular business and increases opportunities for cooperation
between Telkomsel and SingTel Mobile in the development of new
products, thereby strengthening and better positioning Telkomsel
to face competition from other mobile cellular operators.
The key elements of Telkomsel's strategy for its business
include:
•
taking advantage of commercial, operational and network
    synergies with TELKOM and sharing best-practices and know-how
    with SingTel Mobile;
•
continuous capacity and coverage expansion at pre-defined
    quality levels to handle subscriber growth;
•
maintaining or improving market share by continuously aligning
    the characteristics and features of Telkomsel's service
    offerings to the evolving needs of its customer, enhancing its
    products and services portfolio (including its EDGE and GPRS
    services), expanding network capacity and improving service
    quality;
•
ensuring that Telkomsel has the IT infrastructure in place to
    fulfill its vision and mission, with special focus on areas such
    as billing, service delivery and customer service; and
•
achieving service levels at par with world class mobile service
    providers through its call center footprint and aggressive
    pursuit of service oriented goals.
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Developing its Fixed
Wireless Business
TELKOM began offering a limited mobility CDMA-based fixed
wireless phone service under the brand name
"TELKOMFlexi" in December 2002. For more information
on TELKOMFlexi, see Item 4. "Information on the
Company — B. Business Overview — Fixed
Wireless Services". TELKOM plans to continue to expand its
CDMA-based fixed wireless networks in all of its regional
divisions by constructing CDMA-based fixed wireless networks.
Compared to fixed wireline networks, CDMA-based networks are
generally faster and easier to construct and provide customers
with greater flexibility and mobility. In April 2005, TELKOM
introduced the "GB3" program in order to attract more
TELKOMFlexi customers. Through increased brand image, market
penetration and call generation, the "GB3" program
helped increase the customer base of TELKOMFlexi by
2.1 million customers from 1.4 million customers in
December 2004 to 3.5 million customers in June 2005. TELKOM
believes the deployment of a CDMA-based fixed wireless network
and its TELKOMFlexi business will provide TELKOM a competitive
advantage in the face of liberalization and increased
competition in the fixed line market.
Developing its Data and
Internet Business
TELKOM intends to grow its data and Internet business by, among
other things:
•
increased investment in TELKOM's broadband infrastructure
    (such as ADSL, Hybrid Fiber/ Coaxial and satellite);
•
focusing on retaining and acquiring customers with high demand
    for data services by offering competitive pricing for high-speed
    data and Internet services (including value-added services) and
    full VPN IPs, and by expanding TELKOM's backbone and
    network access technology;
•
giving customers greater Internet access options, such as
    through wireless hotspot technology and the bundling of Internet
    access services with TELKOMFlexi and Telkomsel products;
•
developing and offering new value-added services and products,
    such as e-payment services for banks and other financial
    institutions and wireless data content for GPRS and MMS users;
•
expanding the international coverage of TELKOM's data and
    Internet services by entering into agreements with additional
    global carriers and wholesalers; and
•
expanding the coverage and quality of its Internet Protocol
    backbone to increase data and Internet traffic capacity.
Reducing Cost of
Capital
TELKOM recognizes that the increasingly competitive Indonesian
telecommunications market requires TELKOM to develop additional
network capacity, improve operational efficiency and diversify
its sources of financing. TELKOM's internally generated
cash flows and direct borrowing from banks and other lenders may
not be sufficient to fund aggressive plans to grow its business.
As a result, since the end of 2002 TELKOM has sought to
implement a "pay as you grow" scheme for its
additional network capacity in order to:
•
share investment risks with its suppliers;
•
reduce its asset base and outsource non-core businesses; and
•
mitigate financing, commercial, operational, technical and
    capacity risks.
"Pay as you grow" involves arrangements in which
TELKOM and its equipment suppliers agree that a percentage of
the contract cost will be paid up front (for example, 25%) and
the balance will be paid once lines are put into service. TELKOM
and its suppliers also agree to work together to plan and design
networks, assess capacity requirements and determine timetables
for procurement. The "pay as you grow" scheme allows
TELKOM to pay the equipment vendors based on the attainment of a
certain
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number of customers in the related area/facility or within one
year from completion date, whichever is earlier. Vendors
participating in this "pay as you grow" scheme have
assessed the risk of entering into such scheme and, up to the
date of this Annual Report, have only been willing to enter into
this scheme for projects that they believe have high customer
potential. Accordingly, vendors have always been paid by TELKOM
within a few months after the equipment has been delivered. Only
a relatively small number of equipment vendors are invited to
participate in "pay as you grow" programs and supply a
substantial portion of TELKOM's infrastructure and other
equipment needs.
Increasing TELKOM and Telkomsel Synergy
TELKOM seeks to increase its synergy with Telkomsel, and to
promote the sharing of facilities and information, the combining
of resources and increased coordination. These resources include
network, marketing, infrastructure support (such as information
technology, logistics, human resources development and
procurement) as well as products and services (such as new
product development, bundling/packaging of services and
interconnection). Specific examples include:
•
joint corporate account handling to be able to offer a complete
    suite of services to relevant corporate customers;
•
utilizing the group's combined customer base to deliver
    each other's relevant products (such as the offering of
    TELKOM's 007 IDD service to Telkomsel's customers with
    specific benefits and a joint promotion campaign);
•
joint promotion and marketing activities on a case-by-case basis
    whenever this generates additional benefits to the group;
•
consolidated procurement programs and processes to obtain
    competitive prices for common purchases and implement an
    e-auction process as a standard bid price mechanism;
•
sharing of operational facilities (such as sites, towers,
    mechanical and electrical facilities); and
•
information sharing and in certain cases joint deals with
    content providers for mobile data services.
Pay TV Services
TELKOM provides pay-TV services through its subsidiary, PT
Indonusa Telemedia ("Indonusa") under the brand name
TELKOM-VISION through HFC-based SMATV and the Internet. It
currently has approximately 29,000 subscribers.
Customer Service
TELKOM
TELKOM provides customer services through:
•
Walk-in customer service points.
TELKOM's walk-in
    customer service points ("Plasa Telkom") provide
    convenient and comprehensive access to TELKOM's customer
    services including product and service information requests and
    complaints, activation of services, customer billing, payments,
    account suspensions, service features and marketing promotions.
    As of December 31, 2005, TELKOM had more than 800 customer
    service points in total, including 53 customer service
    points in Jakarta and 48 in Surabaya, and including
    163 customer service points operated by its KSO Unit. In
    2006, TELKOM plans to expand its services at customer service
    points to include electronic payment services via Electronic
    Data Capture ("EDC") using on-site terminals.
•
Call centers and Internet.
TELKOM operates call centers
    in many cities in Indonesia, including in the KSO regions.
    Customers are provided a number 08001 TELKOM (toll free for
    corporate customers) to speak directly to customer service
    operators who are trained to handle customer
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requests and complaints and to provide up-to-date information on
    matters such as customer bills, promotions and service features.
    Billing information may also be obtained through the Internet
    for customers in Divisions I to VI. Since December 2004, TELKOM
    has also introduced on a trial basis SMS at a service point for
    customers in Jakarta and East Java and charges such customers at
    the regular SMS rates. Customers are also provided access to
    directory services for which a charge is levied. TELKOM promotes
    the use of call centers, SMS and the Internet over walk-in
    customer service points for its retail customers.
•
Enterprise service and account management teams.
To focus
    on its corporate customers that contribute between
    Rp.50 million to Rp.500 million to TELKOM's
    monthly revenues, particularly corporations with national
    operations, TELKOM has set up an enterprise service division in
    Jakarta, which seeks to develop its business in this segment of
    the market. TELKOM provides these customers with account
    management teams, each comprising an account manager supported
    by personnel from the relevant operational departments, to
    provide a single point of contact for all of the customer's
    communications needs, including integrated communications
    solutions. TELKOM has also divided its enterprise service and
    account management teams into six segments, namely,
    (i) Financial and Banking, (ii) Government,
    Army & Police, (iii) Manufacturing,
    (iv) Mining & Construction,
    (v) Trade & Industrial Park, and
    (vi) Trading & Service. To cater to such
    customers, the enterprise service division works on integrating
    various product and service offerings to provide total
    telecommunications solutions, including voice telecommunications
    services, multimedia services and certain office automation and
    network monitoring and controlling services. TELKOM has also set
    up similar account management teams at the regional level to
    focus on corporations with regional operations within Indonesia.
    As of December 31, 2005, TELKOM had 689 national and
    regional-level account managers that cover Divisions I to
    VI and KSO VII, a 9% increase from 634 account managers as
    of December 31, 2004. It plans to further increase the
    number of such teams.
•
Service level guarantee program.
TELKOM has had a service
    level guarantee program for its fixed line customers in
    Divisions II and V since May 2001 and has been
    implementing a service level guarantee program on a national
    basis since June 2002. The service level guarantee program
    provides guarantees of certain minimum levels of service
    relating to, among others, new line installations, restoration
    of disconnected lines and billing complaints, and provides for
    non-cash compensation, such as free subscription for a certain
    period, to be awarded to customers where such minimum service
    levels are not met.
Telkomsel
Telkomsel provides customer services through:
•
GraPARI Customer Services Centers:
As of
    December 31, 2005, Telkomsel had 64 GraPARI customer
    services centers ("GraPARI centers"). Telkomsel's
    GraPARI centers provide convenient and comprehensive access to
    Telkomsel's customer services. GraPARI centers handle
    product and service information requests and complaints and
    typically focus on activation of services, customer billing,
    payments, account suspensions, service features, network
    coverage, IDD, roaming information and marketing promotions. See
    "— Sales, Marketing and Distribution".
•
Caroline:
"Caroline", or Customer Care On-Line,
    is a 24 hour toll-free telephone service. Telkomsel's
    customers may speak directly to customer service operators who
    are trained to handle customer requests and complaints and to
    provide up-to-date information on matters such as customer
    bills, payments, promotions and service features.
•
Anita:
"Anita", or Aneka Informasi dan Tagihan,
    is an SMS service available only to Telkomsel's KartuHALO
    subscribers.
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Subscribers may use dedicated Anita telephone lines to obtain
billing information as well as usage information through SMS.
Sales, Marketing and Distribution
TELKOM
TELKOM distributes and sells its principal products and
services, including fixed wireless services but excluding mobile
cellular services, through six primary distribution channels:
•
Walk-in customer service points.
Customers have access to
    certain products and services in these walk-in customer service
    points. See "— Customer Service" above.
•
Account management teams.
Account management teams
    promote TELKOM's products and services in an integrated
    manner to TELKOM's larger business customers. See
    "— Customer Service" above.
•
Public telecommunications kiosks.
Small businesses in
    cooperation with TELKOM have established public
    telecommunications kiosks throughout Indonesia. Customers can
    access basic telecommunications services, including local,
    domestic long-distance and international telephony, send
    facsimiles, telexes and telegrams, access the Internet and
    purchase phone-cards and TELKOMFlexi starter packs and vouchers.
    TELKOM generally provides discounts to such kiosks of 30%
    compared with subscriber telephone rates. Kiosks operate on a
    non-exclusive basis and may also provide products and services
    of other operators.
•
Authorized dealers and retail outlets.
These are located
    throughout Indonesia and primarily sell phone-cards and
    TELKOMFlexi subscriptions, starter packs and vouchers.
    Independent dealers and retail outlets pay for all products they
    receive at a discount, operate on a non-exclusive basis and may
    also sell products and services of other operators.
•
Website.
Through its website, customers can obtain
    information on TELKOM's major products and services and
    gain access to certain of its multimedia products.
•
Public telephones.
Customers can make local, domestic
    long-distance and international telephone calls through public
    telephones.
TELKOM's marketing communications program includes the use
of print and television advertising, customer service and
distribution personnel, infrastructure and special promotional
campaigns to strengthen its brand name, increase its profile and
educate the general public about itself and its products and
services. TELKOM is continuing to develop its marketing
communications program to promote all of its core businesses as
it seeks to evolve into a full service telecommunications
provider.
Telkomsel
Telkomsel sells its cellular services through three primary
distribution channels:
(i)
its 64 GraPARI centers (as of December 31, 2005),
(ii)
a network of authorized dealers (operating over 12,000 retail
    outlets throughout Indonesia as of December 31, 2005)
    selling primarily prepaid SIM cards and vouchers, and
(iii)
other outlets such as banks and photo shops.
Independent dealers and other outlets pay for all products they
receive, such as starter packs and prepaid vouchers, at a
discount. Independent dealers sell Telkomsel's cellular
services on a non-exclusive basis and may also sell products and
services of other cellular operators.
Telkomsel markets its KartuHALO product and services to specific
target groups, focusing on corporate end-users, and
HALOkeluarga, product and services to professionals who tend to
generate higher usage and, therefore, higher revenues. Telkomsel
has established dedicated corporate account
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teams to market its services to large corporate customers and to
manage on-going client relationships. Its prepaid products and
services are targeted at a much broader customer base.
Telkomsel advertises through a variety of media for strategic
branding and promotions. In addition, Telkomsel employs
marketing methods such as bill inserts and point-of-sale
displays in order to target programs, events and promotions at
particular segments of the market. Telkomsel's marketing
strategy also includes conducting on-going market analysis to
better understand its targeted subscribers and to gather
feedback on customer preferences. It conducts such analysis with
a view to improving and introducing new services to cater to the
requirements of existing customers and to attract new
subscribers.
Billing, Payment and Collection
TELKOM's customers are billed on a monthly basis. Customers
are billed according to the regional division in which they are
located, although they may request bills from several regions to
be combined. The billing process is computerized within each
region. Payment can be made within the respective regions,
through designated automated teller machines, at post offices
and banks that act as collecting agents and in certain areas by
direct deposit via telephone transfer or by automatic debit
through banks and Internet banking. However, for payments that
are overdue for three months or more, customers are required to
make such payments only at TELKOM's customer service
points. TELKOM issues bills on the fifth day of each month and
payment of the bill is due by the 20th day of that same month.
If payment is not received by the due date of the bill,
customers are provided with reminders by way of automated
telephone calls and reminder letters, nominal late fees are
levied and increasing levels of call barring are implemented.
Services will be terminated if no payment is received after two
months from the due date, although TELKOM does not cut off
service to its Government subscribers. After an account is
terminated, the customer may only re-subscribe for services
after making the overdue payment, including payment of late
fees, and by completing a new application.
The following is a summary of TELKOM's overdue payment
policy for "Lines in Service" ("Sambungan Pokok
Telepon") and TELKOMFlexi (excluding Government
subscribers) effective since April 1, 2006:
Stage
Overdue Payment
Charge
Penalty
I
1-10 days
5% of the total outstanding receivables, subject to the minimum
    charge of Rp.5,000
Out-going isolation (i.e., restricted to receiving incoming
    calls only)
II
11-40 days
10% of overdue bill subject to minimum charge of Rp.10,000
Total isolation (i.e., no outgoing or incoming calls)
III
41-60 days
15% of overdue bill subject to minimum charge of Rp.15,000
Service disconnected
IV
More than 60 days
15% of overdue bill subject to minimum charge of Rp.15,000
Service disconnected and associated number subject to termination
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The following is a summary of TELKOM's overdue payment
policy for Speedy (excluding Government subscribers), effective
since April 1, 2006:
Stage
Overdue Payment
Charge
Penalty
I
1-10 days
5% of the total outstanding receivables
Total isolation
II
11-40 days
10% of overdue bill
Total isolation
III
41-60 days
15% of overdue bill
Service disconnected
IV
More than 60 days
15% of overdue bill
Service disconnected and associated number subject to termination
The following is a summary of TELKOM's overdue payment
policy for WARTEL and Warung TELKOM, kiosk telephone operators
which use TELKOM's networks, effective since April 1,
2006:
Stage
Overdue Payment
Charge
Penalty
I
1-20 days
5% of the total outstanding receivables
Total isolation
II
21-50 days
10% of overdue bill
Service disconnected
III
More than 50 days
15% of overdue bill
Service disconnected and associated number subject to termination
TELKOM currently provides billing services for Indosat in
connection with their IDD services, for which it charges a flat
fee for each bill.
Management of Customer Receivables
TELKOM does not collect deposits from subscribers. TELKOM has
historically been the only provider of fixed line
telecommunication services in Indonesia and has approximately
12.4 million subscriber lines comprises 8.3 million
subscriber lines on its fixed wireline network and
4.1 million subscriber lines on its fixed wireless network.
A delinquent subscriber, except for Government, police and
military customers, is subject to late fees, increasing levels
of call barring and, eventually, disconnection of the service
after approximately 3 months of delinquency. Since the
monthly bill for the average customer is insignificant and the
customer is required to pay a reinstallation fee, the overdue
payment and all late fees when the customer intends to
resubscribe, there is little incentive for the customer not to
pay his outstanding bill. In addition, TELKOM screens potential
customers for fixed line by reviewing identity card and
electricity billing statements and by visiting the residence of
such potential customers. Accordingly, TELKOM believes that the
collectibility of its receivables is reasonably assured.
In the case of private retail customers, TELKOM generally
provides for 100% of the outstanding debt where the amount has
been outstanding for more than three months. In the case of
Government, police and military customers, TELKOM generally
provides for 25% of the outstanding debt where the amount has
been outstanding between 7 and 12 months, 50% where the
amount has been outstanding between 13 and 24 months and
100% where the amount has been outstanding for more than
24 months. TELKOM does not charge any late fees or interest
on its overdue accounts for Government subscribers.
Telkomsel
Telkomsel bills its KartuHALO post-paid subscribers on a monthly
basis, in arrears based on: (i) the minutes of use for
cellular services; (ii) any additional, chargeable
value-added services utilized during the period; and
(iii) subscription charges for basic and other services
included in their subscription plan. Postpaid subscribers can
choose among three options: (a) special tariff for calls to
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five favorite numbers within Telkomsel's network;
(b) 150 free SMSs per month; or (c) waiver of the
monthly subscription charge.
Telkomsel offers its KartuHALO post-paid subscribers a variety
of payment options, including payment by cash, cheque, credit
card, direct deposit via telephone transfer or automatic debit
through banks and participating credit card companies. Payments
may be made at any of Telkomsel's GraPARI centers,
designated automatic-teller machines or through over-the-counter
facilities (mostly at post offices and banks with whom Telkomsel
has an arrangement).
Telkomsel issues bills to retail customers on the fifth day of
each month and payment of the bill is due by the 20th day of
that same month (corporate customers can choose the day of the
month that they would like their bill due and Telkomsel issues
the bill approximately 15 days prior to such date). If
payment is not received by the due date of the bill, subscribers
are provided with reminders by way of automated telephone calls
or SMS, and the customer will be barred from making any outgoing
calls or receiving any incoming roaming calls. If there is no
payment of the overdue sum within one month from the due date of
the relevant bill, the customer will be further barred from
receiving all incoming calls. If no payment is received within
two months of the due date of payment, the customer's
account will then be terminated, although Telkomsel will
continue to seek payment and may seek the assistance of a debt
collection agency. After an account is terminated, the customer
may only re-subscribe for services after making the overdue
payment and by completing a new application. Telkomsel does not
charge any late fees or interest on its overdue accounts.
Insurance
As of December 31, 2005, TELKOM's property, plant and
equipment, including optical fibers but excluding multi-pair
cables, were insured against the risk of fire, theft and other
specified risks for an aggregate coverage value of Rp.20.3
trillion (US$2.1 billion). TELKOM maintained additional
insurance coverage as of such date of US$191.5 million in
the event of a total loss of the TELKOM-1 and TELKOM-2
satellites. In connection with the TELKOM-1 satellite, TELKOM
has procured in-orbit insurance coverage in the amount of
US$54.5 million. This coverage has been subject to daily
reductions on a straight-line basis since November 7, 2004.
As of January 1, 2006, the coverage amount is
US$48.2 million and it is expected to reduce to zero by
2014. In connection with the TELKOM-2 satellite, which was
successfully launched on November 17, 2005, TELKOM has
procured insurance to cover both the satellite and launch
services. With regard to the TELKOM-2 satellite, TELKOM has
procured (i) a satellite launch and in-orbit insurance
providing coverage of US$72.3 million to cover the event of
a total loss of the satellite in the period between lift-off and
up to one year in orbit, and (ii) post separation and
in-orbit insurance coverage of US$71.0 million to cover the
event of a total loss in the period between the separation of
the satellite from the launcher up to one year in orbit. As of
December 31, 2005, TELKOM also maintained general insurance
coverage for motor vehicles of Rp.105.9 billion
(US$10.8 million). TELKOM does not maintain business
interruption insurance.
TELKOM's subsidiaries separately insure their property in
such amounts and in accordance with the policies determined and
implemented by the subsidiaries themselves. Telkomsel has an
electronic equipment and industrial all-risk insurance policy
underwritten by a consortium led by PT Asuransi Ramayana Tbk in
the amount of US$2,789.2 million. The policy provides cover
for Telkomsel's network equipment, facilities,
infrastructure and buildings although it excludes losses
suffered as a result of war, civil war, rebellion, revolution,
terrorism, insurrection or military or usurped power, amongst
other exclusions. Telkomsel also has general insurance for motor
vehicle liabilities and comprehensive general liabilities.
Telkomsel does not maintain business interruption insurance.
Indonesian Telecommunications Industry
Overview
Since 1961, telecommunications services in Indonesia have been
provided by a succession of state-owned companies. As in other
developing economies, the expansion and modernization of
telecommu-
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nications infrastructure play an important role in
Indonesia's general economic development. Moreover, the
nation's large population and rapid economic growth have
led to significant unmet demand for telecommunications services.
The Government has extensive regulatory authority and
supervisory control over the telecommunications sector,
primarily through the MoCI. The Government has historically
maintained a monopoly over telecommunications services within
Indonesia. Recent reforms have attempted to create a regulatory
framework to promote competition and accelerate the development
of telecommunications facilities and infrastructure. The
regulatory reforms embodied in new regulations, which came into
effect on September 8, 2000, are intended to increase
competition by removing monopolistic controls, increase the
transparency and predictability of the regulatory framework,
create opportunities for strategic alliances with foreign
partners and facilitate the entrance of new participants to the
industry. The deregulation of the telecommunications sector is
closely linked to the national economic recovery program
supported by the IMF.
Fixed line and cellular penetration are low in Indonesia by
international standards. As of December 31, 2005, Indonesia
had an estimated fixed line penetration (excluding
Indosat's fixed wireless subscribers) of 5% and an
estimated cellular penetration of 21%, according to an internal
study.
TELKOM believes that there are a number of trends in the
telecommunications industry in Indonesia which include:
•
Continued growth. TELKOM believes the telecommunications
    industry will continue to grow, as continued development of
    Indonesia's economy is expected to increase demand for
    telecommunications services.
•
Migration to wireless networks. TELKOM anticipates that wireless
    services will become increasingly popular as a result of wider
    coverage areas and improving wireless network quality, declining
    handset costs and the proliferation of prepaid services.
•
Increasing competition. TELKOM anticipates an increasingly
    competitive Indonesian telecommunications market as a result of
    the Government's regulatory reforms.
Regulations
Overview
The Government exercises both regulatory authority and
supervisory control over the telecommunications industry in
Indonesia. The legal framework for the telecommunications
industry is based on specific laws, government regulations and
ministerial decrees enacted and issued from time to time. The
Government currently regulates the telecommunications sector
through the MoCI. The MoCI is responsible for the overall
supervision and regulation of the industry. Within the MoCI,
various directorates and bureaus carry out specific regulatory
duties. The MoCI has authority to issue implementing decrees,
which are typically broad in scope, thereby giving the MoCI
considerable latitude. Pursuant to such decrees, the MoCI
defines the scope of exclusivity, formulates and approves
tariffs, determines USOs and controls many factors affecting
TELKOM's competitive position, operations and financial
condition. The MoCI, as regulator, has the authority to grant
new licenses for the establishment of new joint ventures and
other arrangements, particularly in the telecommunications
sector.
Prior to March 1998, the Ministry of Tourism, Post and
Telecommunications (the "MTPT") was responsible for
the regulation of telecommunications in Indonesia, but, with
reorganization of the Government following the 1999 General
Elections, the MoC was given the regulatory responsibilities. In
2005, pursuant to a presidential decree, such regulatory
responsibilities were transferred to the MoCI. Through the DGPT,
a directorate under the MoCI, the Government regulates the radio
frequency spectrum allocation for all operators, including
TELKOM, which are required to obtain a license from the MoCI for
each of their services utilizing radio frequency spectrum. All
telecommunications
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operators are also required to pay for radio frequency spectrum
usage. The Government also requires all telecommunications
operators to pay a concession license fee of 1% of its collected
operating revenues.
The overall program of telecommunications sector deregulation is
closely linked to the national economic recovery program
supported by the IMF. The national plan is documented in the
Memorandum of Economic and Financial Policies (the
"MEFP"), as further clarified in the Letters of Intent
to the IMF in January and May 2000. The main focus of the MEFP
is to stabilize the economy and regain trust through a
comprehensive plan based on:
•
Deregulation;
•
Promoting competition;
•
Liberalization;
•
Restructuring;
•
Improving market access; and
•
Introducing market-oriented regulations.
The Government's telecommunications reform policy is
formulated in its "Blueprint of the Indonesian
Government's Policy on Telecommunications", as
contained in the MoC's Decree No. KM 72 of 1999
dated July 20, 1999 (the "Blueprint"). The
policies stated in the Blueprint are intended to:
•
Increase the sector's performance in the era of
    globalization;
•
Liberalize the sector with a competitive structure by removing
    monopolistic controls;
•
Increase transparency and predictability of the regulatory
    framework;
•
Create opportunities for national telecommunications operators
    to form strategic alliances with foreign partners;
•
Create business opportunities for small and medium enterprises;
    and
•
Facilitate new job opportunities.
The recent regulatory reforms of the Indonesian
telecommunications sector have their foundation in
Telecommunications Law No. 36 of 1999, which came into
effect on September 8, 2000 (the "Telecommunications
Law").
On September 15, 2003 the Government issued the Economic
Policy Package pursuant to Presidential
Instruction No. 15 dated September 15, 2003. The
Government intends to improve efficiency, capacity and equity in
telecommunications by putting in place the infrastructure for an
additional 3 million fixed lines and 43,000 fixed lines in
remote areas. Further, on March 30, 2004, the MoC issued
Announcement No.PM.2/2004 regarding the Implementation of the
Telecommunications Sector Restructuring, which stated, among
other matters, that the Government will require operators to
install a minimum of 1.4 million lines in 2004 and
10.7 million lines by 2008.
Telecommunications Law
The Telecommunications Law provides key guidelines for industry
reforms, including industry liberalization, facilitation of new
entrants and enhanced transparency and competition. Under the
Indonesian regulatory framework, the Telecommunication Law only
outlines the substantive principles of the subject matter.
Detailed provisions implementing the Telecommunications Law will
be provided in the implementation regulations consisting of
Government regulations, ministerial decrees and decrees of the
DGPT.
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The new Telecommunications Law eliminates the concept of
"organizing entities", thus ending TELKOM's and
Indosat's status as organizing entities with responsibility
for coordinating domestic and international telecommunications
services, respectively, for the industry. To enhance
competition, the Telecommunications Law specifically prohibits
monopolistic practices and unfair competition among
telecommunications operators.
The role of the Government is to become that of an impartial
policy maker and supervisor of the telecommunications sector. As
stipulated in the Telecommunications Law and in order to ensure
transparency in the regulatory process, an independent
regulatory body was established on July 11, 2003 to
regulate, monitor and control the telecommunication industry.
The Indonesian Telecommunications Regulatory Body
("ITRB") is comprised of officials from the DGPT and
the Committee of Telecommunication Regulations and is headed by
the Director General of Post and Telecommunication Services.
Members of the Committee of Telecommunication Regulations were
appointed on December 19, 2003.
MoC Decree No. 67/2003 stipulates the relationship between
the MoC, from which telecommunications regulatory responsibility
was transferred to the MoCI in February 2005, and ITRB. As part
of its regulatory function, ITRB is authorized to (i) carry
out the selection or evaluation for licensing of
telecommunications networks and services in accordance with the
MoCI's policy, and (ii) propose to the MoCI the
operation performance standards for telecommunications networks
and services, service quality standards, interconnection charges
and equipment standardization. As part of its monitoring
function, the ITRB is authorized to monitor and is required to
report to the MoCI on (i) the implementation of the
operation performance standards for telecommunications networks
and services, (ii) the competition among network and
service operators, and (iii) compliance with the
utilization of telecommunication equipment in accordance to the
applicable standards. As part of its controlling function, the
ITRB is also authorized and required to report to the MoCI
regarding (i) the facilitation of any dispute resolution
among network and service operators, and (ii) the control
of the use of telecommunications equipment and implementation of
service quality standards. Decisions of the ITRB are in the form
of a DGPT decree.
New Service Categories
The Telecommunications Law classifies telecommunications
providers into three categories: (i) telecommunications
network providers; (ii) telecommunications services
providers; and (iii) special telecommunications providers.
Under these categories, telecommunications network operations
and/or provision of telecommunications services may be carried
out by any legal entity established for that purpose.
Under the Telecommunications Law, licenses are required for each
category of telecommunications service. A telecommunications
network provider is licensed to own and/or operate a
telecommunications network. A telecommunications service
provider is licensed to provide services by leasing network
capacity from other network providers. Special
telecommunications licenses are required for providers of
private telecommunications services for purposes relating to
broadcasting and national security interests. MoC Decree
No. KM 20/2001 (as amended by Decree No. KM 29/2004)
and MoC Decree No. KM 21/2001 (as amended by Decree
No. KM 30/2004) implement the provisions of the
Telecommunications Law regarding these new categories of
telecommunications network and services operations.
Modern License
Pursuant to the Telecommunications Law the existing licenses for
telecommunication services were replaced with the so-called
"Modern Licenses", which TELKOM received in May 2004.
In addition to granting the license holder the right to provide
telecommunication services, the Modern License also imposes
certain mandatory obligations on the license holder. These
obligations include, among others, construction obligations,
service obligations, network performance obligations and
contributing 0.75%
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of their gross revenues for Universal Service Obligations
("USO"). The license holder is required to fulfill the
mandatory obligations set forth in its Modern License and the
failure to comply with such obligations may result in the
revocation of its Modern License. TELKOM's separate
licenses to provide fixed line services, DLD services and IDD
services were replaced and combined into a single license issued
on May 13, 2004. TELKOM also has a multimedia license that
includes services such as Internet service provider, data
communication and VoIP.
Exclusivity
Under the previous regulatory regime that precedes the
Telecommunications Law, TELKOM was granted a monopoly to provide
domestic local fixed line telecommunications services until
December 31, 2010 and domestic long-distance
telecommunications services until December 31, 2005.
Indosat and Satelindo (prior to the merger of Satelindo into
Indosat in November 2003) were granted a duopoly for exclusive
provision of basic international telecommunications services
until 2004.
The Telecommunications Law did not expressly terminate the
existing exclusivity rights of TELKOM and Indosat. In an effort
to support the undertakings of TELKOM and Indosat during their
respective initial public offerings and to maintain the
Government's credibility among foreign investors, the
Government announced that termination of the exclusivity rights
would be subject to agreement between the relevant incumbents
and the Government, whereby incumbents would be eligible for
compensation in exchange for early termination of these
exclusivity rights.
On August 1, 2001, the Government through the DGPT,
announced the early termination of TELKOM's and
Indosat's exclusivity rights for local and domestic-long
distance telecommunications services (in the case of TELKOM) and
IDD (in the case of Indosat). The announcement stated that it is
the Government's intention that Indosat would receive a
license to provide local telephone services and a license to
provide domestic long-distance and that TELKOM would receive a
license to provide IDD services at the end of 2003. The
Government appointed an appraiser to resolve differences of
opinion regarding the amount of compensation to be provided to
TELKOM and Indosat for early termination of their exclusivity
rights. On March 30, 2004, the MoC announced that the
Government shall pay to TELKOM Rp.478 billion (net of
taxes) as compensation. The Parliament approved
Rp.478 billion as such compensation, which payment will be
made over a 5-year period. See Item 3. "Key
Information — D. Risk Factors — Risks
Relating to TELKOM and its Subsidiaries — TELKOM
operates in a legal and regulatory environment that is
undergoing significant reforms and such reforms may adversely
affect TELKOM's business."
As affirmed by the Government, TELKOM received a commercial
license to provide IDD services, which was issued on
May 13, 2004. Indosat received a commercial license to
provide local telephone services, which was issued in August
2002, and a commercial license to provide domestic long-distance
services, which was issued on May 13, 2004.
Competition
Despite the termination of exclusivity rights, the Government
does not prohibit or discourage operators from attaining a
dominant position with regard to telecommunications services.
The Government, however, does prohibit operators from abusing a
dominant position. On March 11, 2004, the MoC issued Decree
No. 33/2004, which sets forth measures to prohibit the
abuse of their dominant position by network and service
providers. Dominant providers are determined based on factors
such as their scope of business, coverage area of services and
whether they control a particular market. Specifically, the
Decree prohibits a dominant provider from engaging in practices
such as dumping, predatory pricing, cross-subsidies, compelling
consumers to use such provider's services (to the exclusion
of competitors) and hampering mandatory interconnection
(including discriminating against specific providers).
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Interconnection
Pursuant to the express prohibitions on activities that may
create monopolistic practices and unfair business competition,
the Telecommunications Law provides for fair interconnection of
networks to allow "any to any connectivity".
Interconnection fees are to be agreed by each network provider
and calculated in a transparent manner. The Telecommunications
Law provides guidance with respect to the interconnection scheme
between telecommunication network providers. Currently,
interconnection costs paid for interconnection with
TELKOM's fixed line network vary, depending on the type of
interconnected operator (e.g. IDD, cellular, fixed wireline,
fixed wireless or satellite), and are determined in accordance
with MoC Decree No. 46/1998 (IDD and IDD, DLD and DLD,
cellular and DLD, cellular and cellular, cellular and IDD), as
amended by MoC Decree No. 37/1999 (DLD and IDD) and MoC
Decree No. KU506/1997 (fixed wireline and fixed wireless).
For IDD and satellite operators, interconnection costs are based
on termination and origination charges. Interconnection costs
for fixed wireline and fixed wireless operators are based on
revenue sharing fixed under Decree No. KU506/1997.
Interconnection costs paid by mobile cellular operators are
based principally on negotiations between the network providers
and in the event no agreement is reached by the providers, the
interconnection costs are to be determined in accordance with
MoC Decree No. 46/1998.
On February 8, 2006, the MoCI issued
Regulation No. 8/2006, which mandates a new cost-based
interconnection tariff scheme for all telecommunications network
and services operators, and amends and supercedes MoC Decree
No. 46/1998, MoC Decree No. 37/1999 and MoC Decree
No. KU506/1997. Under the new scheme, the operator of the
network on which calls terminate would determine the
interconnection charge to be received by it based on a formula
to be mandated by the Government, which would be intended to
have the effect of requiring that operators charge for calls
based on the costs of carrying such calls. Pursuant to
Regulation No. 8/2006, each telecommunication network
operator is required to prepare and submit to the ITRB a
reference interconnect offer (the "RIO"), which must
prescribe the type of interconnection services offered by the
network operators and the tariffs charged for each of the
offered services. Such calculated interconnection charges must
be presented in a RIO and reported to the ITRB. TELKOM submitted
its RIO in April 2006. ITRB is expected to complete its review
of RIOs submitted by large network operators, including TELKOM,
by July 2006. The new interconnection tariff scheme will become
effective on January 1, 2007. Pursuant a transition clause
in the Regulation, existing interconnection agreements remain
valid as long as the parties to the agreements so agree and to
the extent that the existing agreements do not conflict with the
Regulation. This new regulation is intended to ensure that
interconnection among network operators is conducted on the
basis of the principles of transparency and non-discrimination.
To reflect the new cost-based interconnection scheme, TELKOM
expects to enter into amendments to its existing interconnection
arrangements with other network operators, including Indosat.
Negotiations pertaining to such amendments are scheduled to
commence in August 2006 and be finalized by the end of 2006. See
Item 3. "Key Information" — D. Risk
Factors — Risks relating to TELKOM and its
subsidiaries — TELKOM operates in a legal and
regulatory environment that is undergoing significant reforms
and such reforms may adversely affect TELKOM's
business".
DLD and IDD Services
Historically, DLD and IDD services could only be offered by
TELKOM and Indosat, respectively (See —
"Exclusivity"). After the Government terminated the
exclusivity rights of TELKOM and Indosat, it stated its
intention to allow TELKOM to offer IDD services and Indosat to
offer DLD services, as well as allowing greater competition in
the market for DLD and IDD services. On March 11, 2004, the
MoC issued Decree No. KM 28/2004, Decree No. KM
29/2004 and Decree No. KM 30/2004, which implemented the
new policy regarding IDD and DLD services. Under these Decrees:
•
DLD and IDD network operators may offer DLD and IDD service as
    part of basic telephony service;
•
Each DLD and IDD operator must use a distinct 3-digit access
    code for its DLD and IDD service;
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•
Customers may freely select their DLD and IDD providers; and
•
DLD and IDD fixed telecommunication network operators (currently
    only TELKOM and Indosat) may now provide DLD and IDD basic
    telephony services.
TELKOM has been granted authority to use "007" as its
IDD access code. Based on Decree No. 28/2004, TELKOM, which
currently uses "0" as the access code for its DLD
service, was required by March 1, 2005 to cease using the
"0" access code and to implement a three digit access
code in the form of "01X" for access to its DLD
service. However, TELKOM has not within the given deadline
implemented, and does not expect to in the near future to
implement, a three digit access code, as extensive installation
or upgrade of equipment will be required. TELKOM expects to
incur significant costs in connection with the new requirement
to establish three digit DLD access codes, including
expenditures required to install or upgrade new switching
facilities, create a new routing database, costs relating to
customer education and other marketing costs. In response to the
MoC Decree No. 28/2004, in June 2004, TELKOM submitted a
letter to the ITRB highlighting the technical difficulties in
implementing the three digit DLD access codes within the given
deadline and the substantial costs involved, and requesting that
TELKOM be allowed to continue using the "0" prefix for
its DLD access prefix and that it be given an additional five
year period to implement the three digit DLD access codes. On
April 1, 2005, the MoCI announced that it would make
available to Indosat the "011" DLD access in five
major cities that were technically ready for interconnection,
including Jakarta, and progressively extend it to all other area
codes within five years. TELKOM has also been assigned
"017" as its DLD access code. On March 31, 2005,
TELKOM and Indosat entered into an amended interconnection
agreement, extending the coverage of their local fixed line
network from Jakarta, Surabaya and Malang to cover Medan, Batam,
Bandung, Bogor, Balikpapan, Yogyakarta and their surrounding
areas. This amendment also allows automatic renewal of local
coverage without entering into further amendments, except when
there is a change in the business scheme, such as a change in
the tariff scheme or a change in the settlement method from
call-by-call basis to wholesale basis. On September 23,
2005, TELKOM and Indosat entered into an interconnection
agreement related to interconnection between
(i) TELKOM's local fixed line network and
Indosat's long-distance fixed line network;
(ii) Indosat's local fixed line network and
TELKOM's long-distance fixed line network;
(iii) TELKOM's and Indosat's long-distance fixed
line networks; (iv) TELKOM's domestic fixed line
network and Indosat's international fixed line network; and
(v) Indosat's local fixed line network and
TELKOM's international fixed line network, with the
interconnection tariff being calculated on a call-by-call basis.
Six cities, which include Medan, Batam, Jakarta, Surabaya,
Balikpapan and Denpasar, are covered under this interconnection
agreement. On December 1, 2005, TELKOM and Indosat entered
into another interconnection agreement enabling each
party's customers to make domestic calls between
Indosat's mobile network and TELKOM's fixed line
network and allowing Indosat's mobile customers to access
TELKOM's IDD service by dialing "007". This
agreement overrides all existing interconnection agreements on
mobile and fixed line network between TELKOM and Indosat. In the
five-year interim period and thereafter, the "0"
prefix may continue to be used by all operators, including
TELKOM, as default codes for each operator's customers to
access the DLD service selected by the respective operator.
On May 17, 2005, the MoCI issued decree No. 6/2005.
According to Decree No. 6/2005, the three digit access code
in the form of "01X" and "0" access code for
access to DLD services may be used. The "0" access
code is being used to accommodate customers who prefer not to
choose their long-distance carrier, while the "01X"
access code has to be implemented gradually in local areas in
which TELKOM has technical capabilities to support such
services. By April 1, 2010, the "01X"
long-distance services must be commenced in all TELKOM's
local areas to accommodate customers who prefer to choose their
long-distance carrier.
Indonesian
Telecommunications Regulatory Body
On July 11, 2003, the Indonesian Telecommunications
Regulatory Body ("ITRB") was established as the
implementing agency of the Telecommunications Law. Under MoC
Decree No. KM 31/2003, the ITRB is authorized to regulate,
monitor and control the operations of the telecommunications
sector.
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The ITRB is composed of officials from the DGPT and the
Committee of Telecommunication Regulations. Combined with
further privatization of TELKOM and Indosat, the establishment
of such an independent regulatory body is intended to reduce the
Government's role in the telecommunications industry from
that of being the telecommunications industry's financier,
operator, regulator and licenser to becoming primarily the
industry's licenser and regulator.
In 2003 the MoC also announced the establishment of the
Telecommunication Traffic Clearing System ("SKTT"),
which will assist the ITRB in the performance of its functions
and which will be responsible for all interconnection matters.
It is expected that through the SKTT, the ITRB will obtain
accurate data about the profile of interconnection traffic among
operators so as to ensure transparency in the charging of
interconnection fees. The actual operation of the SKTT will be
undertaken by PT Pratama Jaringan Nusantara, a private entity
selected by the MoC on February 18, 2004, which will act
under the supervision and control of the ITRB. As of the date of
this Annual Report, the SKTT has not commenced operations.
Consumer Protection
Under the Telecommunications Law, each operator must provide
guarantees for consumer protection in relation to quality of
services, usage or service fees, compensation and other matters.
The law also allows customers injured or damaged by negligent
operations to file claims against negligent providers.
Universal Service
Obligations
Under the Telecommunications Law, all telecommunications network
operators and service providers are bound by a Universal Service
Obligation, which requires such network operators and
telecommunication service providers to make contribution towards
providing universal telecommunication facilities and
infrastructure or other forms of compensation. On
September 3, 2003, the DGPT issued a letter stating that
telecommunications operators in Indonesia will be required to
contribute 0.75% of gross revenues (with due consideration for
bad debt and interconnection charges) for USO development. On
March 11, 2004, the MoC issued Decree No. 34/2004,
which stated that USO facilities must meet the following minimum
requirements: (a) the facilities should meet the standards
of basic telephony services, including facsimile and dial-up
Internet services; (b) the facilities should provide basic
public telephony services, with domestic long-distance,
international and mobile access; (c) the facilities should
provide telecommunication services that are capable to transmit
and receive data; (d) the facilities should be accessible
for emergency services; and (e) the facilities should
utilize equipment that has been certified by the DGPT. Tariffs
for services provided under the USO program are based on the
applicable PSTN tariffs. On March 30, 2004, the MoC issued
Announcement No. PM. 2/2004, which sets forth the basic
policies underlying the USO program and required
telecommunications operators in Indonesia to contribute 0.75% of
gross revenues (with due consideration for bad debt and
interconnection charges) for USO development. On
September 30, 2005, the MoCI issued Regulation
No. 15/2005 which provides that the USO contribution in the
amount of 0.75% of the gross revenues is to be made payable per
quarter, per semester or annually, at the latest on
March 31 of the following year, to the State Treasury
through a certain determined account. As of April 30, 2006,
TELKOM and its subsidiaries have paid Rp.213.1 billion out
of total USO amount payable of Rp.307.7 billion for the
fiscal year 2005.
Implementing Regulations
To date, the Government has issued several implementing
regulations relating to the Telecommunications Law, including
Government Regulation No. 52/2000 ("Operation of
Telecommunications") and Government Regulation
No. 53/2000 ("Utilization of Radio Frequency Spectrum
and Satellite Orbit"), as well as ministerial decrees,
including No. KM 20/2001 ("Operation of
Telecommunications Networks"), No. KM 21/2001
("Operation of Telecommunications Services"),
No. KM 12/2002 ("Completing MPPT Decree
No. KM.
79/PR-301/MPPT-95
on Procedures for the Tariff Adjustment of
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Domestic Basic Telecommunications Services"),
No. KM 40/2002 ("Guidance for Tariff
Implementation of State Revenue on Tax from Cost of Utilization
Right of Radio Frequency Spectrum"),
No. KM 23/2002 ("Internet Telephony Service for
Public"), No. KM 31/2003 ("Indonesian
Telecommunication Regulatory Body"),
No. KM 28/2004 ("Amendments to the Decree of the
Minister of Communication No. KM. 4/2001 of
Fundamental Technical Plan National 2000),
No. KM 29/2004 ("Amendments to the Decree of the
Minister of Communication No. 20 of 2001 on the Provision
of Telecommunication Network"), No. KM 30/2004
("Amendments to the Decree of the Minister of Communication
No. 21 of 2001 on the provision of Telecommunication
Services"), No. KM 31/2004 ("Amendment to
the Decree of the Minister of Communication No. 23/2002 on
the Provisions of Internet Telephony Services for Public
Needs"), No. KM 32/2004 ("Interconnection
Charges for Telecommunication"), No. KM 33/2004
("Supervision of Fair Competition in the Provision of Fixed
Network and Basic Telephony Services"),
No. KM 34/2004 ("Universal Service
Obligation"), No. KM 35/2004 ("Provision of
Wireless Local Fixed Network with Limited Mobility"), MoCI
Regulation No. 6/2005 ("Second Amendments to the
Decree of the Minister of Communication No. KM 4/2001
of Fundamental Technical Plan National 2000"), MoCI
Regulation No. 7/2005 ("Second Amendments to the
Decree of the Minister of Communication No. KM 23/2002
on Internet Telephony Service for Public"), MoCI Regulation
No. 13/2005 ("Operation of Telecommunications using
Satellite"), MoCI Regulation No. 15/2005
("Implementing Guidance on Tariff for Non-Tax State Income
from USO Contribution"), MoCI Regulation No. 23/2005
("Prepaid Card Registration"), MoCI Regulation
No. 24/2005 ("Provision of Value Added
Features"), MoCI Regulation No. 01/2006
("Operation of Radio Frequency Band 2.1 GHz for Cellular
Network) and MoCI Regulation No. 8/2006
("Interconnection"). The MoCI and DGPT are in the
process of finalizing a number of additional ministerial decrees
that are intended to implement other aspects of the
Telecommunications Law, including decrees relating to special
telecommunications operations and implementation of the
cost-based interconnection system.
Satellite regulation
The international satellite industry is highly regulated. In
addition to being subject to domestic licensing and regulation
in Indonesia such as for the use of orbital slots and radio
frequencies, the placement and operation of TELKOM's
satellites are also subject to registration with the Radio
Communications Bureau of the International Telecommunications
Union and the Intelsat consultation process.
Fixed Wireless Access regulation
On March 11, 2004, the MoC issued Decree No. 35/2004,
which provides that only fixed network operators holding
licenses issued by the MoC and using radio frequency access
networks may offer fixed wireless access service. In addition,
the decree states that each fixed wireless access provider must
provide basic telephony services. However, a fixed wireless
access provider can only provide fixed wireless access service
within its designated area code. Further, fixed wireless access
service may not incorporate roaming and auto mutation features.
Accordingly, customers cannot use their fixed wireless access
phones to make or receive calls when they are located outside
their respective area codes.
Competition
Fixed Wireline and Fixed
Wireless
Historically, TELKOM had the exclusive right to provide fixed
line domestic telecommunications services in Indonesia. Pursuant
to regulations introduced to implement the Telecommunications
Law, the Government terminated TELKOM's monopoly in
providing fixed line domestic telecommunications services. The
MoC issued Indosat a license to provide local telephone services
from August 2002. On May 13, 2004, Indosat received its
commercial license to provide domestic long-distance telephone
services. Indosat launched its CDMA fixed wireless access
service under the brand name "StarOne" in Surabaya on
May 29, 2004 and in Jakarta on July 25, 2004, thereby
creating a "duopoly system" in
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Indonesia's fixed line domestic telecommunications market.
As of December 31, 2005, Indosat is able to provide
nationwide DLD services through its CDMA-based fixed wireless
network, its own fixed line network and its interconnection
arrangements with TELKOM. Based on the interconnection agreement
between TELKOM and Indosat dated September 23, 2005, TELKOM
has agreed to open interconnection with Indosat's local
fixed line service in certain areas such as Jakarta, Surabaya,
Batam, Medan, Balikpapan and Denpasar. To date, Indosat has
expanded the coverage of its local fixed network to Bogor and
Denpasar. Indosat also commenced offering limited domestic
long-distance services for calls within its network in late 2004.
TELKOM's fixed line services also faces direct and indirect
competition from mobile cellular services, fixed cellular
services, SMS, VoIP services and
e-mail.
TELKOM expects
that the increasing uses of these services may adversely affect
future demand for its fixed line services.
Cellular
As of the date of this Annual Report, the cellular market in
Indonesia is dominated by Telkomsel, Indosat and Excelcomindo.
As of December 31, 2005, these nationwide GSM operators
collectively had over 90% of the Indonesian cellular market. The
number of GSM cellular subscribers in Indonesia totaled
approximately 30.4 million at the end of 2004 and
approximately 47.1 million at the end of 2005, representing
an annual growth rate of approximately 55% during that period.
Despite this rapid growth, the cellular penetration rate in
Indonesia, at approximately 21% at the end of 2005, has remained
relatively low compared to many other countries. During the last
two years, competition among cellular operators has intensified.
As part of the elimination of TELKOM's and Indosat's
cross-shareholdings in several telecommunications companies in
2001, TELKOM sold its 22.5% interest in Satelindo to Indosat and
Indosat sold its 35% interest in Telkomsel to TELKOM. This has
resulted in the cellular market becoming more competitive as
contemplated by the Blueprint and the Telecommunications Law.
GSM mobile cellular operators compete principally on the basis
of pricing, brand, network coverage, distribution, technology,
value-added services and service quality. TELKOM believes that
Telkomsel is able to compete effectively in the Indonesian
cellular market due to the quality and coverage of its mobile
cellular network and the strength of its brand name.
TELKOM's new CDMA-based fixed wireless phone service,
TELKOMFlexi, which offers limited mobility and charges customers
at PSTN tariff rates that are substantially lower than tariffs
for cellular services, may over time offer a competitive
alternative to GSM services and attract Telkomsel customers that
prefer lower tariff rates in exchange for limited mobility. See
Item 3. "Key Information — D. Risk
Factors — Risk Relating to TELKOM and its
subsidiaries — Regulators and other telecommunications
operators may challenge TELKOM's ability to apply PSTN
tariffs to its new CDMA-based fixed wireless phone service,
which is marketed under the brand name TELKOMFlexi".
As of December 31, 2005, Telkomsel remained the largest
national licensed provider of GSM services in Indonesia, with
approximately 24.3 million cellular subscribers and a
market share of approximately 52% of the GSM mobile cellular
market, which represented a slight decrease compared to its
approximately 54% market share as of December 31, 2004.
Indosat, as a result of its merger with Satelindo, was the
second largest provider with approximately 14.5 million
cellular subscribers and a market share of approximately 31% as
of December 31, 2005. Excelcomindo had approximately
7.0 million subscribers and a market share of approximately
13% as of December 31, 2005. Since 2003, Mobile 8 has also
operated a nationwide CDMA mobile cellular service. Mobile 8 had
approximately 1.2 million subscribers and a market share of
approximately 2.5% as of December 31, 2005. In addition to
the nationwide GSM operators, a number of smaller regional GSM,
analog and CDMA cellular providers operate in Indonesia.
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The following table sets forth summary information as of
December 31, 2005 on each of the three leading nationwide
licensed GSM mobile cellular operators:
Nationwide Licensed GSM Mobile Cellular Operators in
Indonesia
Operator
Telkomsel
Indosat
Excelcomindo
Launch date
May 1995
November
    1994
(2)
October 1996
Licensed frequency bandwidth (GSM 900 & 1800)
30 MHz
30 MHz
25 MHz
Licensed coverage
Nationwide
Nationwide
Nationwide
Network coverage
Nationwide
Information not available
Information not available
Market share (as of December 31,
    2005)
(1)
52%
31%
13%
Subscribers (as of December 31,
    2005)
(1)
24.3 million
14.5 million
7.0 million
(1)
Estimated, based on statistics compiled by TELKOM.
(2)
In November 2003, Indosat and Satelindo merged, and Indosat has
    taken over Satelindo's cellular operations.
IDD
On August 1, 2001, the Government through the DGPT,
announced the early termination of Indosat's exclusivity
rights for IDD. The announcement stated the Government's
intention that TELKOM would receive a commercial license to
provide IDD services by the end of 2003. Although TELKOM only
received its commercial license on May 13, 2004, it had
already made necessary preparations to provide IDD services even
prior to the receipt of such license and on June 7, 2004
TELKOM began offering IDD fixed line services to customers.
TELKOM has upgraded some switching to have International Gateway
capabilities in Batam, Jakarta and Surabaya. These gateways have
received certificates of operation (sertifikat ULO) from the
DGPT. In order to connect with overseas operators, TELKOM has
built two microwave links to connect Batam-Singapore and
Batam-Pangerang (Malaysia). In addition, TELKOM, SingTel and CAT
developed the TIS submarine cable system in 2003 connecting
Batam, Singapore and Thailand. TELKOM has also signed an
agreement with Telekom Malaysia Berhad for the deployment and
maintenance of a new submarine optical cable to connect Dumai
(Indonesia) to Melaka (Malaysia), which was completed in
December 2004. TELKOM also extended its international cable by
purchasing bandwidth capacity to connect with Hong Kong and
TELKOM utilizes this capacity to connect to other countries,
such as the United States. TELKOM also completed developing the
ground segment to connect to the Intelsat Satellite in December
2004. As a new player in IDD, TELKOM cooperates with some global
operators to get direct or indirect connection to reach all
offshore destinations. All these preparations have allowed
TELKOM to begin offering customers IDD fixed line services on
June 7, 2004.
VoIP
TELKOM formally launched its VoIP services in September 2002.
VoIP uses data communications to transfer voice traffic over the
Internet, which usually provides substantial cost savings to
subscribers. In addition to TELKOM, Excelcomindo, Indosat,
Atlasat, Gaharu and PT Satria Widya Prima provide VoIP services
in Indonesia. Other unlicensed operators also provide VoIP
services that may be accessed through the Internet as well as
from software that allows
PC-to
-PC voice
communications through the Internet. VoIP operators offering
international services also compete with IDD operators, such as
Indosat and, beginning on June 7, 2004, TELKOM.
VoIP operators compete primarily on the basis of pricing and
service quality. Certain VoIP operators have started offering
services such as budget calls and prepaid calling cards, which
is expected to result in greater competition among VoIP
operators and other IDD service providers.
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Satellite
In recent years, competition in the Asia-Pacific satellite
business has been intense. Companies in this business compete
primarily on coverage power, product offerings and price. The
Indonesian satellite industry is loosely regulated and in
practice operates in accordance with an
"open-sky"
policy. This means that Indonesian satellite operators must
compete with foreign satellite operators.
Other
During the last three years, competition with respect to
multimedia, Internet, and data communications-related services
has intensified principally due to the issuance of new licenses
as a result of the deregulation of the Indonesian
telecommunications industry. TELKOM expects competition to
continue to intensify. Multimedia, Internet and data
communications-related service providers in Indonesia compete
principally on the basis of price, range of services provided,
network quality, network coverage and customer service quality.
Licenses
The Telecommunications Law requires telecommunication network
operators and telecommunication service operators, including
TELKOM, to obtain licenses to operate telecommunications
networks and provide telecommunications services.
Fixed wireline and fixed wireless.
TELKOM provided local
and domestic long-distance fixed line services based on
Government Regulation No. 25/1991 and Government
Regulation No. 8/1993, which permits TELKOM to provide
basic and non-basic fixed line telecommunications services.
Based on MoC Decree No. KM 39/1993 concerning basic
telecommunication operation, TELKOM was permitted to enter into
joint operation schemes (KSO) with its existing KSO partners for
the provision of fixed line services in their respective
regions. The Government has amended certain of TELKOM's
fixed line licenses to comply with the new Telecommunication
Law, and TELKOM received its Modern License to provide fixed
line services, DLD services and IDD services on May 13,
2004. TELKOM also provides its fixed wireless services pursuant
to its authorization to provide fixed line services and applies
PSTN tariffs for this service, which are substantially lower
than those for cellular services. TELKOM's ability to
provide fixed wireless services at PSTN tariff rates may be
challenged by regulators, other cellular operators and cellular
trade associations. See Item 3. "Key
Information — D. Risk Factors — Risks
relating to TELKOM and its subsidiaries — Regulators
and other telecommunications operators may challenge
TELKOM's ability to apply PSTN tariffs to its new
CDMA-based fixed wireless phone service, which is marketed under
the brand name TELKOMFlexi."
Cellular.
Telkomsel holds licenses to operate a
nationwide GSM mobile cellular telephone network, to use
7.5 MHz of radio frequency bandwidth in the 900 MHz band
and to use 22.5 MHz of radio frequency bandwidth in the
1800 MHz band. Telkomsel also holds licenses from the
Indonesian Investment Coordinating Board that permit Telkomsel
to develop cellular services with national coverage, including
the expansion of its network capacity. In addition, Telkomsel
holds permits and licenses from and registrations with certain
regional governments and/ or governmental agencies, primarily in
connection with its operations in such regions, the properties
it owns and/ or the construction and use of its base transceiver
stations.
Third-Generation Mobile Telecommunications System (3G).
In February 2006, the Indonesian Government conducted the tender
for three radio frequency spectrum licenses of 2.1 GHz,
each having a bandwidth of 5 MHz, to be used in conjunction
with the new licenses to operate nation-wide 3G cellular
telecommunication network in Indonesia. The winning bidders
would become the operators of 3G cellular telecommunication
networks along with two existing license holders (HCPT and
PT Lippo Telekom) that had received the 3G licences through
a competitive bid in 2003. On February 14, 2006, under MoCI
Regulation No. 19/2006, the 3G licenses were
awarded to Telkomsel, Indosat and Excelcomindo. As winning
bidders, Telkomsel, Indosat and Excelcomindo are subject to an
upfront fee of up to 200% of the bidding price, payable within
30 business days of the award.
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Telkomsel, Indosat and Excelcomindo are also subject to a radio
frequency spectrum usage fee of up to 20% of the tender price
for the first year, 40% of the tender price for the second year,
60% of the tender price for the third year, 100% of the tender
price for the fourth year, and 130% of the tender price for the
fifth and each subsequent year. The tender price is the lowest
price of the three highest offers, which is Rp.160 billion.
IDD.
TELKOM received, as part of its Modern License, its
commercial license to provide IDD services on May 13, 2004
pursuant to the terms of MoC Decree No. KP 162/2004.
VoIP and ISP.
TELKOM holds a Modern License to provide
VoIP and ISP services, pursuant to a DGPT Decree
No. SK01/dirjen/2004, which also permits TELKOM to provide
data communications services.
Tariffs and Interconnection
Charges
The Government divides tariffs into two categories:
•
Tariffs for the provision of telecommunications services; and
•
Tariffs for provision of telecommunications networks.
Tariffs for the Provision of
Telecommunications Services
Generally, the MoCI regulates prices and the amount TELKOM can
charge is based on a tariff formula for telecommunications
services in Indonesia. Telecommunications operators may set the
amount of tariff. In this regard, TELKOM's operating
business units have authority to make adjustments to prices
based on specific guidelines fixed by the directors of TELKOM.
Fixed Wireline Tariffs
Fixed wireline tariffs consist of monthly subscription and usage
charges. The Government establishes fixed wireline tariffs by
reference to a price cap formula that calculates the maximum
average percentage increase in fixed wireline tariffs for a
particular year. The maximum increase typically equals the
Indonesian Consumer Price Index (CPI) for the preceding year, as
published by the Indonesian Central Bureau of Statistics, minus
an efficiency factor (the "X-factor"), which the
Government determines by taking into consideration certain
factors including improvements in the cost efficiency of the
services resulting from technological improvements, management
efficiency, changes in the Rupiah-U.S. Dollar exchange
rate, the interests of affected telecommunications operators and
the purchasing power of customers.
In calculating the maximum total percentage increase in tariffs
for a particular year, the tariff components for installation,
monthly charges and usage charges are weighted in proportion to
the contribution made to total revenue of those services (basket
revenues) in the prior year. The weighted average increase in
prices charged for the services for any year must be equal to or
less than the price cap percentage. In addition to tariff
increases, the tariff components can also be
"rebalanced" from time to time such that the tariffs
for monthly and usage charges increase at different rates or
certain tariffs decrease while others increase.
On January 29, 2002, the MoC announced that fixed wireline
tariffs would be increased by an average of 45.49% over three
years. Effective February 1, 2002, the MoC increased fixed
wireline tariffs by a weighted average of 15%. Although fixed
wireline tariffs were expected to be increased again effective
January 1, 2003, public opposition following the
announcement by TELKOM of tariff increases led to the suspension
on January 16, 2003 of the implementation of such
increases. See Item 3. "Key Information — D.
Risk Factors — Risks relating to TELKOM and its
subsidiaries — TELKOM operates in a legal and
regulatory environment that is undergoing significant reforms
and such reforms may adversely affect TELKOM's
business".
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On March 30, 2004, the Government announced that it would
allow operators to rebalance their tariffs, with the resulting
weighted average of tariffs increasing by 9%. As a result,
TELKOM has adjusted its fixed wireline and fixed wireless
tariffs, with local charges increasing by 28.2%, DLD tariffs
decreasing by an average of 10.6% and monthly subscription
charges increasing by varying amounts from 12.1% to 25.1%.
The current tariffs chargeable by TELKOM, which became effective
on April 1, 2004, are as follows:
Tariff Rate Schedule (effective April 1, 2004):
Installation and Monthly Charges:
Access charges
Business
Residential
Social
(Rp.)
(Rp.)
(Rp.)
Installation
175,000 – 450,000
75,000 – 295,000
50,000 – 205,000
Monthly Subscription
38,400 – 57,600
20,600 – 32,600
12,500 – 18,500
Usage charges:
Price per Pulse
Pulse Duration
(Rp.)
Local
Up to 20 km
250
3 min (off peak) and 2 min (peak)
Over 20 km
250
2 min (off peak) and 1.5 min (peak)
Rounding Time
Price Per Minute
Block Duration
(Rp.)
Domestic Long-distance
0-20 km
83 – 122
1 minute
20-30 km
122 – 163
1 minute
30-200 km
325 – 1,290
6 sec
200-500 km
460 – 1,815
6 sec
Over 500 km
570 – 2,270
6 sec
The Government did not carry out its plan to further increase
fixed wireline tariffs to reach the 45.49% average increase
announced in January 2002 by January 2005. In an announcement by
the MoCI on April 1, 2005 regarding access codes, the MoCI
indicated that there would be another rebalancing of tariffs in
the future. TELKOM proposed the new tariff rebalancing plan to
the ITRB on October 27, 2005. The plan is still being
discussed. TELKOM is uncertain as to whether or when the tariff
balancing is going to be implemented.
CDMA Fixed Wireless Tariffs
Tariffs charged to CDMA fixed wireless subscribers are reported
as fixed line revenues. TELKOM offers both postpaid and prepaid
fixed wireless services.
Postpaid.
Postpaid subscribers pay a one-time activation
charge of Rp.25,000 and a monthly charge of Rp.30,000. Usage
charges for postpaid subscribers beginning April 1, 2004
are as follows:
Usage charges:
Price Per Pulse
Pulse Duration
(Rp.)
Local
250
2 min (off peak) and 1.5 min (peak)
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Rounding Time
Price Per Minute
Block Duration
(Rp.)
Domestic Long-distance
0-200 km
325 – 1,290
6 sec
200-500 km
460 – 1,815
6 sec
Over 500 km
570 – 2,270
6 sec
For SMS, postpaid subscribers are charged Rp.250 per message.
Postpaid subscribers who use TELKOM Internet access via wireless
dial-up are charged Rp.165 per minute. Postpaid subscribers who
use Public Data Network based dedicated lines for Internet
access are charged Rp.5 per KBps.
Prepaid.
Usage charges for prepaid subscribers, effective
February 10, 2004, including VAT of 10%, are summarized as
follows:
Usage charges:
Rounding Time
Price Per Minute
Block Duration
(Rp.)
Flexi to Flexi/Fixed Wireline:
Local
260
30 sec
Domestic Long-distance
0-200 km
700 – 1,100
30 sec
Over 200 km
1,600 – 2,500
30 sec
Flexi to mobile cellular:
Local
650 – 810
30 sec
Domestic Long-distance
0-200 km
1,100 – 1,540
30 sec
Over 200 km
2,250 – 3,150
30 sec
For SMS, prepaid subscribers are charged Rp.350 per message.
Prepaid subscribers who use TELKOM Internet access via wireless
dial-up are charged Rp.350 per minute.
IDD Tariffs
TELKOM commenced offering IDD fixed line services on
June 7, 2004. Tariffs for IDD calls are set by service
providers, subject to specified maximum limits established by
the Government. As of the date of this Annual Report,
TELKOM's IDD tariffs are as follows:
Rounding Time
Region
Price Per Minute
Block Duration
(Rp.)
Africa
5,090 – 6,440
6 sec
Americas and Caribbean
5,090 – 7,470
6 sec
Asia and Oceania
4,410 – 9,630
6 sec
Europe
5,090 – 9,630
6 sec
Middle East
5,090 – 8,460
6 sec
Cellular Tariffs
The Indonesian cellular telecommunications market generally
operates on a "calling party pays" system, which
requires that the originators of telephone calls pay for calls.
Cellular operators in Indonesia set their own tariffs, subject
to specified maximum limits established by the Government. On
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February 8, 2006, the MoCI issued Decree No. 8/2006,
which mandates the new cost-based interconnection tariff scheme
for all telecommunications network and services operators. This
scheme becomes effective on January 1, 2007. See
Item 3. "Key Information — D. Risk
Factors — Risks relating to TELKOM and its
subsidiaries — TELKOM operates in a legal and
regulatory environment that is undergoing significant reforms
and such reforms may adversely affect TELKOM's
business" and Item 4. "Information on the
Company — B. Business Review —
Indonesian Telecommunications Industry —
Regulations — Interconnection".
Postpaid Tariffs.
The cellular tariffs for postpaid
subscription services consist of activation, monthly
subscription and usage charges. The following table sets forth
the maximum cellular tariffs for postpaid services, effective
February 25, 1998:
Mobile Cellular Tariff (maximum postpaid tariff):
Activation
Rp.200,000
Monthly Charge (including frequency charge)
Rp.65,000/month
Usage Charge:
Air Time
Rp.325/minute
Roaming
(1)
Rp.1,000/call plus incoming charge per minute
Local Cellular Conversation
PSTN local tariff
DLD Cellular Conversation
PSTN DLD tariff
(1)
Beginning in mid-2005, Telkomsel provides free roaming services
    to its subscribers.
Prior to the amendments in 1998 to implement the current
cellular tariff structure, the Government amended the cellular
tariff structure in 1997 and 1994.
Telkomsel charges new postpaid subscribers a maximum one-time
connection fee of Rp.200,000 for service activation, although
discounts may be granted. After initial connection, Telkomsel
charges a monthly subscription fee ranging from Rp.0 (provided
minimum monthly usage reaches Rp.25,000) to Rp.65,000 per month
(depending on the chosen tariff plan). Usage charges are as
follows:
Rounding Time
Price Per Minute
Block Duration
(Rp.)
Mobile cellular to mobile cellular:
Local
650 – 938
20 sec
Domestic Long-distance
30-200 km
1,110 – 2,628
15 sec
Over 200 km
1,220 – 3,083
15 sec
Mobile cellular to fixed line:
Local
450 – 531
20 sec
Domestic Long-distance
30-200 km
650 – 1,696
15 sec
200-500 km
785 – 2,221
15 sec
Over 500 km
895 – 2,676
15 sec
International Long-distance:
Group I
3,675 – 5,880
15 sec
Group II
4,237 – 6,780
15 sec
Group III
4,687 – 7,500
15 sec
Group IV
5,362 – 8,580
15 sec
Group V
6,225 – 9,960
15 sec
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Rounding Time
Price Per Minute
Block Duration
(Rp.)
Group VI
7,050 – 11,280
15 sec
Group VII
8,025 – 12,840
15 sec
Prepaid Tariffs.
For prepaid cellular services,
activation charges may be freely determined by cellular
operators while usage charges are limited to a maximum of 140%
above the peak usage charges for postpaid services. Telkomsel
charges its prepaid customers (SimPATI / KARTU As) usage charges
as follows:
Rounding Time
Price Per Minute
Block Duration
(Rp.)
SimPATI
KARTU As
SimPATI
KARTU As
Calls within Telkomsel:
Local
300 – 1,500
1,000
30 sec
30 sec
Domestic Long-distance
Zone 1
300 – 4,000
1,000
30 sec
30 sec
Zone 2
300 – 4,500
1,000
30 sec
30 sec
Calls to other cellular:
Local
1,300 – 1,600
1,500
30 sec
30 sec
Domestic Long-distance
Zone 1
3,500 – 4,000
3,850
30 sec
30 sec
Zone 2
4,000 – 4,500
3,850
30 sec
30 sec
Calls to fixed line/fixed wireless:
Local
750 – 950
700
30 sec
30 sec
Domestic Long-distance
30-200 km
2,000 – 2,300
2,000
30 sec
30 sec
200-500 km
3,200 – 3,720
3,200
30 sec
30 sec
Over 500 km
3,600 – 4,150
3,200
30 sec
30 sec
International Long-distance:
Group I-III
7,500 – 8,000
8,000
15 sec
15 sec
Group IV-VII
11,000 – 12,000
12,000
15 sec
15 sec
Leased Line Tariffs
The Government determines the maximum tariffs for leased lines.
The Government reduced leased line tariffs substantially in 1997
and 1998. On January 1, 1997, the Government decreased
tariffs for leased lines by an average of 52%. Leased line
tariffs for other telecommunications operators and Government
bodies were further reduced by up to 30% effective
January 1, 1998. The Government has announced that it
intends to move towards a formula-based tariff structure for
leased line services, however, it has not announced a proposed
framework for such a formula.
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The following table sets forth the maximum leased line tariffs,
effective January 1, 1998 and still valid as of the date
hereof:
Maximum Tariff
(Rp.)
Installation charge
Customer access
600,000 – 700,000
(1)
Other operator access
900,000
Monthly subscription charge
Analog line
Local (or up to 25 km)
60,000 – 250,000
(2)
Inter-local (over 25 km)
779,400 – 3,557,750
(3)
Digital line
Local (or up to 25 km)
190,000 – 172,268,000
(4)
Inter-local (over 25 km)
478,800 – 2,308,628,250
(5)
(1)
Price differs by equipment provided by TELKOM.
(2)
Price differs by user (private, other licensed operator, or
    government) and equipment provided by TELKOM.
(3)
Price differs by user (private, other licensed operator, or
    government) and distance.
(4)
Price differs by user (private, other licensed operator, or
    government) and speed.
(5)
Price differs by user (private, other licensed operator, or
    government), speed and distance.
VoIP Tariffs
Charges for VoIP services may be freely determined by VoIP
operators, based on cost. TELKOM has launched its VoIP services,
which as of the date of this Annual Report consist of TELKOM
Global-017
and its
cheaper alternative, TELKOMSave. TELKOM believes that the tariff
for TELKOM
Global-017
service and the TELKOMSave service are approximately 40% and
60%, respectively, of the tariff charged by IDD operators in
Indonesia.
Kiosk phone Tariffs
Charges for kiosk phones may be freely determined by operators.
Kiosk phones are public phones that are operated by
third-parties. TELKOM gains 70% of basic tariff charged by
operators to its customers on calls placed from kiosk phones.
Satellite Tariffs
TELKOM generally charges an annual tariff of between
US$1.15 million to US$1.5 million per transponder,
although in some instances TELKOM may offer discounted tariffs
for long-term commitments or loyal customers.
Broadband Access
The following table sets forth the current tariffs for
TELKOM's broadband access services:
Fees for Usage
in Excess of
Fees for Usage in
Monthly
Monthly
SpeedyLink ADSL
(1)
Activation Fee
Monthly Fee
Usage Allowance
(1)
Allowance
(Rp.)
(Rp.)
(Rp.)
Limited 384 kbps
200,000
200,000
500 MB – 1.0 GB
(2)
500/MB
Limited 512 kbps
200,000
350,000
2.0 GB
500/MB
Unlimited 384 kbps
2,500,000
1,520,000
Unlimited
—
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Fees for Usage
in Excess of
Fees for Usage in Speedy
Monthly
Monthly
High Speed ADSL Internet Access
Activation Fee
Monthly Fee
Usage Allowance
Allowance
(Rp.)
(Rp.)
(Rp.)
Limited 384 kbps
200,000
300,000
500 MB
1,200/MB
Limited 384 kbps
200,000
450,000
1.0 GB
1,200/MB
Limited 512 kbps
200,000
800,000
2.0 GB
1,200/MB
Unlimited 384 kbps
2,500,000
3,800,000
Unlimited
—
(1)
Provides access only to the Internet service provider's
    node and does not include Internet access. The subscriber is
    responsible for obtaining Internet access with an Internet
    service provider.
(2)
Depending on the Internet service provider plan.
Tariffs for Other Services
The amount of the tariffs for telephony and other multimedia
services are determined by the service provider by taking into
account the expenditures and market price. The Government only
determines the tariff formula for basic telephony services,
while there is no stipulation for the tariff of other services.
Tariffs for Interconnection and
Access
As of the date of this Annual Report, the Government establishes
the percentage of tariffs to be received by each operator in
respect of calls that transit multiple networks. The
Telecommunications Law and Government
Regulation No. 52 of 2000 provides for the
implementation of a new policy to replace the current revenue
sharing policy. On February 8, 2006, the MoCI issued
Regulation No. 8/2006, which mandates the new
cost-based interconnection tariff scheme for all
telecommunications network and services operators. For more
information about the scheme, see Item 4. "Information
on the Company — B. Business Overview —
Regulations — Interconnection".
Interconnection with Fixed line
Network
The Government's National Fundamental Technical Plan set
forth in Decree 4 of 2001, as amended by Decree 28 of
2004 and MoCI Regulation No. 6/2005, sets out the
technical requirements, routing plans and numbering plans for
interconnection of the networks of various telecommunications
operators among themselves and with TELKOM's fixed line
network. Under the National Fundamental Technical Plan, all
operators are permitted to interconnect with TELKOM's fixed
line network for access thereto and to other networks, such as
international gateways and the networks of other cellular
operators. In addition, cellular operators may interconnect
directly with other networks without connecting to TELKOM's
fixed line network. As of the date of this Annual Report, the
fees for interconnection within TELKOM's fixed line network
are set forth in Decree No. 506/1997, Decree
No. 46/1998, Decree No. 37/1999 and Decree
No. 30/2000. These interconnection fees are expected to be
adjusted when
cost-based
interconnection fees are implemented pursuant to MoCI
Regulation No. 8/2006.
Local Fixed line Interconnection with Indosat. Indosat launched
its CDMA fixed wireless access service under the brand name
"StarOne" in Surabaya on May 29, 2004 and in
Jakarta on July 25, 2004, thereby creating a "duopoly
system" in Indonesia's fixed line domestic
telecommunications market. Based on the interconnection
agreement between TELKOM and Indosat for interconnection of
local and domestic long distance calls, dated September 23,
2005, the operator of the network on which the calls terminate
receives an agreed amount per minute.
Other Fixed Wireless Interconnection. Fixed wireless networks
may interconnect to TELKOM's fixed line network at
TELKOM's gateway. As of the date of this Annual Report,
other than TELKOM and Indosat, PT Bakrie Telecom (formerly
Ratelindo) also operates a fixed wireless network in
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Indonesia. The fixed wireless interconnection between TELKOM and
PT Bakrie Telecom is currently based on the most recent
interconnection agreement signed in 2005. Pursuant to the
agreement, for interconnection of local calls, the operator of
the network on which the calls terminate receives an agreed
amount per minute. For local calls originating on PT Bakrie
Telecom's network and terminating on a cellular network and
vice versa which transit through TELKOM's fixed line
network, TELKOM receives an agreed percentage of the prevailing
tariff for local calls. For domestic
long-distance
calls
that originate on TELKOM's fixed line network and terminate
on PT Bakrie Telecom's network, PT Bakrie Telecom
receives an agreed amount per minute. For domestic long-distance
calls that originate on PT Bakrie Telecom's fixed line
network and terminate on TELKOM's network and for transit
long-distance
calls
through TELKOM's fixed line network, TELKOM receives an
agreed percentage of the prevailing
long-distance
tariff.
In addition, PT Bakrie Telecom receives a certain fixed
amount for each minute of incoming and outgoing international
calls to and from PT Bakrie Telecom that transit through
TELKOM's fixed line network and use TELKOM's IDD
service. It also receives 25% of the prevailing interconnection
tariff of incoming and outgoing international calls that transit
through TELKOM's fixed line network but use Indosat's
IDD service.
Other Fixed Wireline Interconnection. Since September 1,
1998, TELKOM has been receiving a share of the tariffs from
Batam Bintan Telekomunikasi ("BBT"), which is a local
operator with a special coverage area on Batam Island, for each
successful call that transits or terminates on TELKOM's
fixed line network. Under the interconnection agreement, for
local interconnection calls, revenues are shared on a
"sender-keeps-all"
basis. For local calls originating on BBT's network and
terminating on a cellular network and vice versa which transit
through TELKOM's fixed line network, TELKOM receives an
agreed percentage of the prevailing tariff for local calls. For
interconnection of DLD calls, the operator of the network on
which the calls terminate or transit receives an agreed
percentage of the prevailing
long-distance
tariff.
In addition, BBT receives a certain fixed amount for each minute
of incoming and outgoing international calls from and to BBT
that transit through TELKOM's fixed line network and use
TELKOM's IDD service and 50% of the prevailing
interconnection tariff for incoming and outgoing international
calls that transit through TELKOM's fixed line network and
use Indosat's IDD service.
Cellular Interconnection
In respect of local interconnection calls, including transit
calls, between a cellular network and TELKOM's fixed line
network, TELKOM receives 50% of the prevailing
fixed-line
usage tariff
for local pulse. For local calls from TELKOM's fixed line
network to a cellular network, TELKOM charges its subscribers
the applicable local call tariff plus an airtime charge, and
pays the cellular operator the airtime charge. For local calls
between cellular telecommunications networks, the originating
cellular operator pays the terminating cellular operator air
time charges.
The current Interconnection Decree, effective April 1,
1998, assumes that it is possible for
long-distance
calls to
be carried by more than one network. Pursuant to the
Interconnection Decree, for DLD calls which originate on
TELKOM's fixed line network, TELKOM is entitled to retain a
portion of the prevailing DLD tariff, which ranges from 40% of
the tariff in cases where the entire DLD portion is carried by a
cellular operator up to 85% of the tariff in cases where the
entire DLD portion is carried by TELKOM's fixed line
network. For DLD calls that originate from a cellular
subscriber, TELKOM is entitled to retain a portion of the
prevailing DLD tariff, which ranges from 25% of the tariff in
cases where the call originates from a cellular subscriber,
transits through TELKOM's fixed line network and terminates
on another cellular subscriber with the entire DLD portion
carried by a cellular operator, up to 85% of the tariff in cases
where the entire DLD portion is carried by TELKOM's fixed
line network and terminates on TELKOM's fixed line network.
International
Interconnection
Interconnection on TELKOM's domestic fixed line network for
international calls consists of access charges and usage
charges. The following table sets forth the current
international interconnection tariff, effective as of
December 1, 1998, for IDD calls which are routed through
Indosat's international
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gateways and which originate, transit or terminate on
TELKOM's domestic fixed line network and Telkomsel's
cellular network, pursuant to Ministerial Decree No. 37 of
1999:
Description
Tariff
Access Charge
Rp.850/successful call
Usage Charge
Rp.550/paid minute
In addition, since June 2004, TELKOM has provided IDD services.
As of the date of this Annual Report, TELKOM's IDD service
can be accessed by subscribers of all telecommunication
operators in Indonesia. Interconnection and access charges for
originating calls using TELKOM's IDD service or terminating
incoming international calls routed through TELKOM's
international voice telecommunications gateway are negotiated
with each respective domestic operator.
Satellite Phone
Interconnection
Since the fourth quarter of 2001, TELKOM has been receiving a
share of revenues arising from interconnection transactions with
PSN, a national satellite operator. Under the agreement, in
respect of the interconnection calls between TELKOM and PSN,
TELKOM receives Rp.800 per minute for network charges and an
additional Rp.300 per minute origination fee if the call
originates from TELKOM's fixed line network.
VoIP Interconnection
Previously, MoC Decree No. 23/2002 provided that access
charges and network lease charges for the provision of VoIP
services were to be agreed between network operators and VoIP
operators. On March 11, 2004, the MoC issued Decree
No. 31/2004, which stated that interconnection charges for
VoIP were to be fixed by the MoC. As of the date of this Annual
Report, the MoCI, to which telecommunications regulatory
responsibility was transferred in February 2005, has not yet
determined what the new VoIP interconnection charges will be.
Until such time as the new charges are fixed, TELKOM will
continue to receive connection fees for calls that originate or
terminate on TELKOM's fixed line network at agreed fixed
amounts per minute.
Trademarks, Copyrights and Patents
TELKOM has a number of registered intellectual property rights
consisting of trademarks and copyrights. TELKOM has registered
with the Directorate General of Intellectual Property Rights of
the Ministry of Justice and Human Rights of the Republic of
Indonesia (i) trademarks for its corporate name, logo and
certain services including the names of TELKOM's products
and (ii) copyrights of books and artworks. These
intellectual property rights are important to TELKOM's
business.
C.     Business and Organizational
Structure
Information on Subsidiaries and Associated Companies
Subsidiaries
As of December 31, 2005, TELKOM had interests in nine
consolidated subsidiaries and six unconsolidated associated
companies. The business activities of the consolidated
subsidiaries (as further described below) are described as part
of TELKOM's business in this
Form
20-F,
as well
as in Note 1c to the consolidated financial statements. For
a description of the activities of TELKOM's unconsolidated
associated companies, please see "Unconsolidated Associated
Companies" below and Note 11 to the consolidated
financial statements.
The following table sets forth TELKOM's direct ownership
interest in companies as of December 31, 2005.
TELKOM's ownership interests in associated companies may be
increased or diluted as a result of TELKOM's planned
restructuring of its legal ownership interests in these
companies to focus on phone, mobile and multimedia businesses.
In January 2006, TELKOM's subsidiary, PT Multimedia
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Nusantara ("Metra") together with PT Mekar Prana
Indah (owned by Dana Pensiun Bank Indonesia (Bank
Indonesia's Pension Fund) and Yayasan Kesejahteraan
Karyawan Bank Indonesia) established a company called
PT Finnet Indonesia. The new company will provide
nationwide financial network services transmitting banking data
throughout Indonesia.
Legal
Ownership (%)
As of
December 31,
Company
2005
Notes
Business Operations
Consolidated subsidiaries
Fixed Phone:
PT AriaWest International ("AriaWest")
100
(1)
Fixed-phone (KSO-III West Java & Banten)
PT Dayamitra Telekomunikasi ("Dayamitra")
100
(2)
Fixed-phone (KSO-VI Kalimantan)
PT Pramindo Ikat Nusantara ("Pramindo")
100
(3)
Fixed-phone (KSO-I Sumatera)
Cellular:
PT Telekomunikasi Selular ("Telkomsel")
65
(4)
GSM cellular phone services
Application, Content, Datacom:
PT Multimedia Nusantara ("Metra")
100
(5)
Multimedia, Pay TV
PT Infomedia Nusantara ("Infomedia")
51
(6)
Telephone directory and other information services (electronic
    based business, call center and data segment)
PT Indonusa Telemedia ("Indonusa")
96
(7)
Interactive multimedia, Pay TV
PT Napsindo Primatel Internasional ("Napsindo")
60
(8)
Network Access Point
Property & Construction:
PT Graha Sarana Duta ("GSD")
100
(9)
Real estate, construction and services
Where TELKOM owns between 20% to 50%:
PT Patra Telekomunikasi Indonesia ("Patrakom")
40.00
(10)
VSAT services
PT Citra Sari Makmur ("CSM")
25.00
(11)
VSAT and other telecommunications services
PT Pasifik Satelit Nusantara ("PSN")
35.50
(12)
Satellite transponder & communications
Where TELKOM owns less than 20%:
PT Mandara Selular Indonesia ("MSI")
1.33
(13)
NMT-450 cellular and CDMA services
PT Batam Bintan Telekomunikasi ("BBT")
5.00
(14)
Fixed-phone (in Batam & Bintan islands)
PT Pembangunan Telekomunikasi Indonesia
    ("Bangtelindo")
3.18
(15)
Telco network & equipment maintenance
Bridge Mobile Pte. Ltd.
12.50
(16)
Mobile services (in the Asia Pacific)
(1)
TELKOM fully controlled AriaWest from July 31, 2003, after
    acquiring 100% of AriaWest from PT.Aria Infotek (52.50%),
    MediaOne International I B.V. (35%) and The Asian Infrastructure
    Fund (12.50%). Pursuant to the Sale and Purchase Agreement dated
    September 12, 2005, one share in AriaWest was transferred
    to Mr. John Welly in order to comply with the legal
    requirement that Indonesian limited liability companies should
    have more than one shareholder.
(2)
TELKOM controlled 100% of the shares of Dayamitra from
    December 14, 2004, following the acquisition of 9.68%
    shares of Dayamitra from TM Communications (HK) Ltd., which
    increased TELKOM's ownership in Dayamitra from 90.32% to
    100%. One TELKOM's share in Dayamitra was transferred to
    Mr. Robby Rubama Sadeli in order to comply with the legal
    requirement that Indonesian limited liability companies be owned
    by more than one shareholder.
(3)
TELKOM and the shareholders of Pramindo signed a Conditional
    Sale and Purchase Agreement for the sale of the Pramindo shares
    on April 19, 2002, pursuant to which TELKOM received 30% of
    the shares of Pramindo in August 2002 and additional 15% in
    September 2003 while the remaining 55% was to be transferred to
    TELKOM on December 15, 2004. Although TELKOM only had 30%
    of the shares of Pramindo, TELKOM acquired control of Pramindo
    on August 15, 2002 and accordingly, TELKOM consolidated
    100% of Pramindo from August 15, 2002. TELKOM signed a
    short-term loan agreement with ABN AMRO Bank N.V. Jakarta in the
    amount of approximately US$130 million on January 29,
    2004 to finance the accelerated purchase of the remaining 55%.
    On March 15, 2004, TELKOM used the loan proceeds to
    repurchase the promissory notes that were due on June 15,
    2004, September 15, 2004 and December 15, 2004.
    Following this transaction, TELKOM owned 100% of Pramindo. One
    of TELKOM's shares in Pramindo was transferred to
    Mr. Adek Julianwar in order to comply with the legal
    requirement that Indonesian limited liability companies be owned
    by more than one shareholder.
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(4)
Telkomsel was established in 1995 by TELKOM (51%) and
    PT Indosat Tbk (49%). Following various transactions and
    changes in ownership, Telkomsel is currently owned by TELKOM
    (65%) and Singapore Telecom Mobile Pte. Ltd. (35%).
(5)
TELKOM increased its ownership in Metra on April 8, 2003 to
    100% by acquiring 69% of the shares of Metra from
    PT Indocitra Grahabawana under a share-swap transaction.
    TELKOM intends to use Metra to operate multimedia services in
    line with TELKOM's strategy to focus on phone, mobile and
    multimedia services. Pursuant to a sale and purchase agreement
    dated September 12, 2005, one share in Metra was
    transferred by TELKOM to Mr. John Welly in order to comply
    with the legal requirement that Indonesian limited liability
    companies be owned by more than one shareholder.
(6)
Infomedia was established in 1984 by TELKOM (51%) and
    PT Elnusa (49%), a subsidiary of PERTAMINA — an
    Indonesian state-owned oil company.
(7)
On August 8, 2003, TELKOM and PT Centralindo
    Pancasakti Cellular ("CPSC") signed a share-swap
    agreement pursuant to which TELKOM received an additional 31% of
    the shares of Indonusa from CPSC. Following this transaction,
    TELKOM's ownership in Indonusa increased from 57% to 88%.
    Pursuant to an extraordinary general meeting of the shareholders
    of Indonusa on October 29, 2003, all of the stockholders
    agreed to convert an additional Rp.13,500 million of debt
    owed by Indonusa to TELKOM into newly issued shares of Indonusa.
    Following such conversion, TELKOM's ownership in Indonusa
    increased from 88% to 90%. As of December 31, 2005, CPSC
    did not hold any shares in Indonusa. CPSC is not a major
    customer of TELKOM. In November 2005, TELKOM increased its
    ownership in Indonusa from 90% to 96% by acquiring 5.29% of the
    shares in Indonusa, owned by PT Megacell Media.
(8)
TELKOM increased its ownership in Napsindo from 32% to 60% by
    acquiring 28% of the shares of Napsindo from PT Info Asia
    Sukses Mandiri ("InfoAsia") on January 28, 2003.
(9)
TELKOM acquired 100% of GSD in April 2001 from Koperasi Mitra
    Duta and Dana Pensiun Bank Duta. TELKOM transferred one of such
    shares to Mr. Martono in order to comply with the legal
    requirement that Indonesian limited liability companies should
    be owned by more than one shareholder.
(10)
On August 26, 2005 TELKOM purchased a 10% stake in
    PT Patra Telekomunikasi Indonesia ("Patrakom")
    from Indosat. As a result, TELKOM's ownership in Patrakom
    increased from 30% to 40%.
(11)
CSM was established in 1986 by Mr. Subagio Wirjoatmodjo and
    Bell Atlantic Indonesia Inc. Currently, CSM is owned by
    PT Tigatra Media (38.29%), Media Trio (L) Inc.
    Malaysia (36.71%), and TELKOM (25%).
(12)
As part of the agreement signed on August 8, 2003 between
    TELKOM and CPSC, TELKOM was entitled to receive CPSC's
    21.12% interest in PSN within a period of one year from the date
    the agreement was signed. During this period, all of CPSC's
    rights in respect of the shares were granted to TELKOM. TELKOM
    received the shares of CPSC in PSN on August 9, 2004,
    increasing its legal ownership interest in PSN to 43.69%. PSN
    and its creditors have consummated a debt-to-equity conversion,
    pursuant to which PSN issued 18,180,660 new shares to the
    creditors. The conversion has the effect of diluting the
    shareholding percentage of the existing shareholders of PSN,
    including TELKOM. In 2005, TELKOM's ownership interest in
    PSN was diluted to 35.5% as a result of the debt-to-equity
    conversion.
(13)
In July 2003 and January 2004, MSI carried out a series of debt
    to equity conversions, resulting in a dilution of TELKOM's
    ownership interest from 25% to 6.4%. In December 2004 and May
    2005, MSI issued new shares to MSI's other shareholders,
    resulting in a further dilution of TELKOM's ownership
    interest to 1.33%. On January 13, 2006, TELKOM sold its
    entire ownership interest in MSI to a third party, namely,
    Twinwood Venture Limited.
(14)
BBT was established in 1996 by PT Batamindo Investment Co
    (95%) and TELKOM (5%). BBT provides fixed line services at
    Batamindo Industrial Park in Muka Kuning, Batam Island and at
    Bintan Beach International Resort and Bintan Industrial Estate
    in Bintan Island. There are special economic and tourist
    development zones on those islands.
(15)
Bangtelindo was established in 1993 by TELKOM (15%),
    PT Indosat (15%), PT Inti (15%) and other shareholders
    (55%). Bangtelindo is currently owned by Dana Pensiun TELKOM
    (82%), TELKOM (3.18%) and other shareholders (14.82%).
(16)
Bridge Mobile Pte. Ltd. (Singapore) was established in 2004 by
    Telkomsel (14.286%) and six other international mobile operators
    in the Asia-Pacific region. On April 14, 2005,
    Telkomsel's ownership interest was diluted to 12.5%
    following the issuance of new shares by Bridge Mobile Pte. Ltd.
    to a new shareholder, namely, Hong Kong CSL Limited.
Unconsolidated Associated Companies
PT Patra Telekomunikasi Indonesia
    ("Patrakom")
Patrakom was established in September 1995 and as of the date of
this Annual Report is owned by TELKOM (40%), PT Elnusa
(40%) and PT Tanjung Mustika (20%). Patrakom provides
satellite communication (VSAT) and related services and
facilities to companies in various industries.
PT Citra Sari Makmur
("CSM")
CSM was established in February 1986 and as of the date of this
Annual Report is owned by TELKOM (25%), PT Tigatra Media
(38.29%) and Media Trio (L) Inc. Malaysia (36.71%). CSM is
incorporated in Indonesia and provides telecommunications
services relating to VSAT applications and other
telecommunications technology and related facilities.
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PT Pasifik Satelit
Nusantara ("PSN")
PSN was established in July 1991 and as of the date of this
Annual Report, PSN is legally owned by TELKOM (35.50%),
Skaisnetindo Teknotama (2.90%), Hughes Space and Communications
International (5.88%), Telesat Canada (5.88%), Bank of New York
(15.81%) and others (34.03%) (including holders of American
Depositary Shares of PSN who own 19.46% of PSN). PSN provides
satellite leasing and satellite-based communication services to
countries within the Asia Pacific region. PSN conducted an
initial public offering of its common stock and listing on
NASDAQ in June 1996, but was delisted on November 6, 2001
due to its failure to meet certain NASDAQ National Market
Listing requirements.
As of December 31, 2001, TELKOM's share of losses in
PSN has exceeded the carrying amount of the investment.
Accordingly, the investment has been reduced to zero.
As part of the agreement signed on August 8, 2003 between
TELKOM and CPSC, TELKOM was entitled to receive CPSC's
21.12% interest in PSN within a period of one year from the date
the agreement was signed. During this period, all of CPSC's
rights in respect of the shares were granted to TELKOM. TELKOM
received the shares of CPSC in PSN on August 9, 2004,
increasing its legal ownership interest in PSN to 43.69%. In
2005, TELKOM's ownership interest in PSN was diluted to
35.5% as a result of the debt-to-equity conversion by PSN.
As of the date of this Annual Report, TELKOM is evaluating the
costs and benefits associated with an increase of its ownership
in PSN to develop a retail satellite based service such as
cellular via satellite and to support the government program for
providing telecommunications lines to remote areas.
PT Mandara Selular Indonesia ("MSI"),
    (previously referred to as PT Mobile Selular Indonesia
    ("Mobisel")
MSI was established on November 30, 1995 by TELKOM,
TELKOM's Pension Fund and PT Rajasa Hazanah Perkasa
("Rajasa").
As of December 31, 2002, the value of investment has been
reduced to zero because TELKOM's share of loss exceeded the
carrying amount of the investment in MSI.
As of the date of this Annual Report, MSI provides NMT-450
services formerly provided by TELKOM and Rajasa pursuant to a
PBH in Java, Bali, Lombok, Sumatera and Lampung. Currently,
there is no plan to expand
NMT-450
services as it
is considered to be obsolete. Mobisel also launched a CDMA-based
network in Lampung in mid-February 2004. In July 2003 and
January 2004, MSI carried out a series of debt to equity
conversions, resulting in a dilution of TELKOM's ownership
interest from 25% to 6.4%. In December 2004 and May 2005, MSI
issued new shares to MSI's other shareholders, resulting in
a further dilution of TELKOM's ownership interest to 1.33%.
On January 13, 2006, TELKOM sold its entire ownership
interest in MSI to a third party, namely, Twinwood Venture
Limited. The resulting gain was not significant to TELKOM's
consolidated statement of income.
PT Batam Bintan
Telekomunikasi ("BBT")
BBT was established in June 1996 and as of the date of this
Annual Report is owned by TELKOM (5%) and Batamindo Investment
(95%). BBT provides fixed 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 which are special economic and tourist
development zones on those islands. As at December 31,
2005, BBT had approximately 2,715 subscribers.
PT Pembangunan
Telekomunikasi Indonesia ("Bangtelindo")
Bangtelindo was established in December 1993 in Indonesia. The
shareholders of Bangtelindo are TELKOM (3.18%), TELKOM's
Pension Fund (82%) and others (14.82%). Bangtelindo's
primary
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business is providing telecommunications network maintenance
services and consultancy services on the installation and
maintenance of telecommunications facilities.
Bridge Mobile Pte. Ltd.
On November 3, 2004, Telkomsel together with six other
international mobile operators in the Asia Pacific established
Bridge Mobile Pte. Ltd. (Singapore), a company that is engaged
in providing regional mobile services in the Asia Pacific.
Telkomsel contributed US$1.0 million (Rp.9.3 billion)
which represented a 14.286% ownership interest. In 2005,
TELKOM's ownership interest in Bridge Mobile Pte. Ltd. was
diluted to 12.5% as a result of the issuance of shares by Bridge
Mobile Pte. Ltd. to a new shareholder, namely, Hong Kong CSL
Limited.
D.     Property, Plants and
Equipment
Except for ownership rights granted to individuals in Indonesia,
the title to land rests with the Indonesian State under the
Basic Agrarian Law No. 5/1960. Land use is accomplished
through landrights, notably rights to build (Hak Guna Bangunan)
and rights to use (Hak Pakai), whereby the holder of the
landright enjoys the full use of the land for a stated period of
time, subject to renewal and extensions. In most instances, the
landrights are freely tradeable and may be pledged as security
under loan agreements.
As of December 31, 2005, TELKOM, excluding its
subsidiaries, had land use rights to approximately 1,173
properties. TELKOM holds registered rights to build for the
majority of its real property. Pursuant to Government
Regulation No. 40 of 1996, the maximum initial periods
for rights to build are 30 years and may be extended for an
additional 20 years. Most of TELKOM's real property is
used to host equipment for the provision of telecommunications
operations including exchanges, transmission stations and
microwave radio equipment. None of TELKOM's properties are
mortgaged. TELKOM is not aware of any environmental issues which
may affect the utilization of its properties.
ITEM 5.     OPERATING AND FINANCIAL
REVIEW AND PROSPECTS
The following discussion and analysis should be read in
conjunction with the consolidated financial statements of TELKOM
for the three years ended December 31, 2003, 2004 and 2005
included elsewhere in this Annual Report. These consolidated
financial statements were prepared in accordance with Indonesian
GAAP, which differs in certain significant respects from
U.S. GAAP. See Note 54 to the consolidated financial
statements for our reconciliation to U.S. GAAP.
A.     Operating Results
Overview
TELKOM is the principal provider of local and domestic
telecommunications services in Indonesia, as well as the leading
provider of mobile cellular services through its majority owned
subsidiary Telkomsel. TELKOM's objective is to become a
leading full service and network provider in Indonesia through
the provision of a wide range of communications services. As of
December 31, 2005, TELKOM had approximately
12.7 million fixed lines in service (Fixed Wireline and
Fixed Wireless) and Telkomsel had approximately
24.3 million mobile cellular subscribers. TELKOM also
provides a wide range of other communication services, including
telephone network interconnection services, multimedia, data and
Internet communication-related services, satellite transponder
leasing, leased line, intelligent network and related services,
cable television and VoIP services.
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TELKOM believes that its operating results in 2003 were
significantly affected by:
•
the increase in TELKOM's interconnection revenues;
•
the continued growth of the Indonesian mobile cellular market
    and the corresponding increase in Telkomsel's revenues;
•
the growth in TELKOM's revenues from interconnection, data
    and Internet services;
•
the acquisition and subsequent consolidation of AriaWest
    (KSO III) in July 2003;
•
the continuation of TELKOM's early retirement program; and
•
increased depreciation expense and operations and maintenance
    expenses associated with Telkomsel's expansion of its
    network capacity.
Telkom believes that its operating results in 2004 were
significantly affected by:
•
the general economic situation in Indonesia, particularly the
    depreciation of the Rupiah during 2004;
•
an increase in fixed line tariffs by 9%;
•
increased competition among cellular operators, particularly in
    the prepaid market;
•
the growth in the Indonesian cellular market and the
    corresponding increase in Telkomsel's revenues;
•
the growth in TELKOM's revenues from interconnection, data
    and Internet services;
•
the amendment of KSO agreement with MGTI on January 20,
    2004 which resulted in TELKOM obtaining the legal right to
    control financial and operating decisions of KSO IV, and
    subsequent consolidation of KSO IV; and
•
increased depreciation expense and operations and maintenance
    expenses associated with Telkomsel's expansion of its
    network capacity and an increase in TELKOM's fixed assets
    due to TELKOM's aggressive deployment of fixed wireless.
TELKOM believes that the factors that have materially affected
TELKOM, as well as the environment in which it operates, during
2005 were:
•
the increase in fixed lines, particularly in fixed wireless
    lines;
•
increased competition among cellular operators, particularly in
    the prepaid market;
•
the growth in the Indonesian cellular market and the
    corresponding increase in Telkomsel's revenues;
•
increased demand for data and Internet services, particularly in
    SMS, broadband Internet, and data communication network services
    using frame relay, SMS and IP VPN;
•
increased operations and maintenance expenses associated with
    Telkomsel's expansion of its network capacity and an
    increase in TELKOM's fixed assets due to TELKOM's
    aggressive deployment of fixed wireless;
•
increased depreciation expense, primarily due to
    Telkomsel's expansion of its network capacity, increase in
    TELKOM's fixed wireless assets and change in TELKOM's
    estimate of remaining useful lives for certain cable network
    facilities (WLL and Approach Link equipment) and certain Jakarta
    and West Java transmission and installation equipment (BSS
    equipment); and
•
write-down of assets and loss on procurement commitments due to
    the Government's decision to allocate the 1900 MHz
    frequency spectrum for exclusive use in 3G services commencing
    at the end of 2007 which resulted in TELKOM no longer being able
    to use its BSS equipment operating in the 1900 MHz in Jakarta
    and West Java areas commencing at the end of 2007.
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TELKOM's operating results, discussed below under
"Results of Operations", for the three-year period
from 2003 through 2005 reflected significant growth in operating
revenues, particularly in the fixed line, cellular,
interconnection and data and Internet businesses. The growth in
operating revenues in the fixed line business reflected both
increased fixed lines in service and the acquisition and
subsequent consolidation of KSO IV in January 2004 and
AriaWest (KSO III) in July 2003. The growth of
revenues in the cellular business primarily reflected growth in
the number of Telkomsel's cellular subscribers. The growth
of revenues in data and Internet services primarily reflected
the increase in SMS traffic from Telkomsel subscribers and
increased usage of TELKOM's multimedia services.
Interconnection revenues have also increased as a result of
higher interconnection charges received from mobile cellular
operators and from the launch of its international long-distance
services under the
"TIC-007"
brand in June 2004. KSO revenues have declined in the
three-year period from 2003 through 2005 due to the acquisitions
of KSO III and IV discussed above.
TELKOM's operating results for the three-year period from
2003 to 2005 also reflected significant growth in operating
expenses. From 2003 to 2004, the growth of operating expenses
was primarily driven by an increase in depreciation expense,
general and administrative expenses, personnel expenses and
operations, maintenance and telecommunications services
expenses. The increase in depreciation expense and operations,
maintenance and telecommunications services expenses in 2004 was
principally due to expenses arising from Telkomsel's
expansion of its network capacity and an increase in
TELKOM's fixed assets due to its deployment of fixed
wireless. General and administrative expenses increased in 2004
mainly due to an increase in amortization of goodwill and other
intangible assets resulting from the acquisitions of AriaWest in
July 2003, KSO IV and the remaining 9.68% interest in
Dayamitra and increases in training, education and recruitment
expenses and collection expenses. Personnel expenses grew in
2004 primarily due to a significant increases in salaries and
related benefits and vacation pay, incentives and other benefits
and increase in net periodic pension cost. From 2004 to 2005,
the growth of operating expenses was primarily driven by
write-down of assets, and an increase in depreciation expense,
personnel expenses and operations, maintenance and
telecommunications services expenses.
In August 2005, the Government decided to set aside the 1900 MHz
frequency spectrum for the exclusive use in 3G services and 800
MHz frequency spectrum for the exclusive use in the CDMA-based
technology network commencing at the end of 2007. As a
result, TELKOM's BSS equipment in Jakarta and West Java
areas, which operates in 1900 MHz and forms an integral part of
the fixed wireless transmission system of TELKOM, can no longer
be used commencing at the end of 2007. Following the
Government's decision, TELKOM reviewed the recoverable
amount of cash-generating unit to which the affected fixed
wireless asset belongs and recognized a write-down of
Rp.616.8 billion relating to this equipment. In addition,
TELKOM changed its estimate of the remaining useful lives for
the Jakarta and West Java BSS equipment and depreciates the
remaining net book value of these assets through June 30,
2007, the date when all of TELKOM's 1900 MHz BSS equipment
are expected to be completely replaced with the 800 MHz BSS
equipment. This change in estimate increased depreciation
expense by Rp.159.0 billion in 2005. In addition, TELKOM
recognized a loss relating to non-cancellable contracts for
procurement of the 1900 MHz transmission installation and
equipment in Jakarta and West Java areas amounting to
Rp.79.4 billion in 2005. Due to the Government's
decision issued in the first quarter of 2005 to rearrange the
frequency spectra utilized by the telecommunication industry
which resulted in TELKOM not being able to utilize certain
frequency spectra TELKOM currently uses to support fixed
wireline cable network commencing at the end of 2006, certain of
TELKOM's cable network facilities, which comprise primarily
of WLL and approach link equipment operating in the affected
frequency spectra, can no longer be used commencing at the end
of 2006. Accordingly, TELKOM shortened its estimate of the
remaining useful lives for WLL and approach link equipment in
the first quarter of 2005 and began depreciating the then
remaining net book value of those assets through
December 31, 2006. This change in estimate increased
depreciation expense by Rp.471.2 billion in 2005. The
increase in depreciation expense in 2005 was also due to an
expansion of Telkomsel's cellular network and an increase
in deployment of fixed wireless network.
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The increase in operations, maintenance and telecommunications
services expenses in 2005 was primarily due to a network
expansion by TELKOM and Telkomsel and an incurrence of USO
expenses pursuant to MOC Regulation No. 15/2005, which
requires all telecommunications network and services operators
to pay 0.75% of their gross operating revenues to the Government
starting January 1, 2005. Personnel expenses grew in 2005
primarily due to a significant increase in salaries and related
benefits, vacation pay incentives and other benefits and
employee income tax.
In 2004, TELKOM recognized loss on foreign exchange of
Rp.1,220.8 billion due to the depreciation of the Rupiah
during 2004, primarily related to foreign exchange loss on its
US Dollar borrowings. In 2005, TELKOM recognized loss on foreign
exchange of Rp.516.8 billion primarily due to foreign
exchange losses on its US Dollar borrowings. The loss on
foreign exchange was lower in 2005 due to the relatively modest
depreciation of the Rupiah during 2005, compared to 2004, and
decrease in borrowings denominated in foreign currencies.
Economic Situation in
Indonesia
TELKOM was significantly affected by a severe economic crisis
that Indonesia and other Asian countries experienced beginning
in the second half of 1997. As a result of the Asian financial
crisis, the Rupiah depreciated significantly and experienced
periods of significant volatility. From August 1997 to mid 1998,
the month-end value of the Rupiah relative to the US Dollar
declined from approximately Rp.2,600 per US Dollar to a low of
approximately Rp.15,000 per US Dollar. In the three-year
period from 2003 through 2005, the Rupiah experienced the
following (based on Bank Indonesia's middle exchange rate):
•
in 2003, an appreciation from Rp.8,940 per US Dollar at
    December 31, 2002 to Rp.8,465 per US Dollar at
    December 31, 2003;
•
in 2004, a depreciation from Rp.8,465 per US Dollar at
    December 31, 2003 to Rp.9,290 per US Dollar at
    December 31, 2004;
•
in 2005, a depreciation from Rp.9,290 per US Dollar at
    December 31, 2004 to Rp.9,830 per US Dollar at
    December 31, 2005;
As of March 31, 2006, Bank Indonesia's middle exchange
rate was Rp.9,075 to US$1.00.
Indonesia also experienced higher rates of inflation and
interest rates from the second half of 1997 through 2002. For
the years ended December 31, 2003, 2004 and 2005, the
annual inflation rate was 5.1%, 6.4% and 17.1%, respectively.
The interest rate on a one-month Bank Indonesia Certificate
(SBI) as of December 31, 2003, 2004 and 2005 was 8.3%, 7.4%
and 12.8%, respectively. See Item 3. "Key
Information — D. Risk Factors — Risks
relating to Indonesia — Declines or volatility in
Indonesia's currency exchange rates can have a material
adverse impact on business activity in Indonesia" and
Item 3. "Key Information — A. Selected
Financial Data — Exchange Rate Information".
Limited Increases in
Tariffs
Since 1995, Indonesian law has provided for domestic fixed line
tariff adjustments to be determined by a price cap formula that
calculates the maximum total percentage increase in tariffs for
a particular year. The maximum increase equals the Indonesian
inflation rate (referred to by the Government as the Consumer
Price Index ("CPI")) typically for the last two years,
as published by the Indonesian Central Bureau of Statistics,
minus an efficiency factor
(the
"X-factor"),
which the Government determines by taking into consideration
certain factors including improvements in the cost efficiency of
the services resulting from technological improvements, the
interests of affected telecommunications operators and the
purchasing power of customers. Although the regulations provide
for an annual tariff review and adjustment, economic conditions
in Indonesia led to tariffs being frozen in 2003. See
Item 3. "Key Information — D. Risk
Factors — Risk Relating to TELKOM and its
subsidiaries — TELKOM operates in a legal and
regulatory environment that is undergoing significant reforms
and such reforms may adversely affect TELKOM's
business". For details of the increase and rebalanc-
81
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ing of tariffs by the Government, see Item 4.
"Information on the Company — B. Business
Overview — Competition — Tariffs for the
Provision of Telecommunication Services — Fixed
Wireline Tariffs".
Growth of Indonesian
Cellular Market and Increase in Telkomsel's Revenues
The Indonesian cellular market has increased significantly in
recent years. Telkomsel experienced a 43.1% growth in net
operating revenues from 2004 to 2005, due to a 49.0% growth in
its total number of cellular subscribers, as a result of the
increased usage of mobile cellular phones in Indonesia and a
corresponding increase in revenues from air time charges.
Telkomsel experienced a 32.3% growth in net operating revenues
from 2003 to 2004, due to a 69.8% growth in its total number of
cellular subscribers. Telkomsel's revenues from cellular
phone services (voice) accounted for approximately 34.9% of
TELKOM's consolidated total operating revenues for the year
ended December 31, 2005, compared to 30.7% for the year
ended December 31, 2004 and 31.2% for the year ended
December 31, 2003.
Due to the growth in the cellular market, competition has
increased among cellular operators, particularly in the prepaid
market. These cellular operators also compete to a lesser extent
with fixed wireless operators, with fixed wireless lines in
service increasing significantly in 2005.
Increase in TELKOM's
Interconnection Revenues
TELKOM's interconnection revenues accounted for
approximately 18.5% of TELKOM's consolidated operating
revenues for the year ended December 31, 2005, compared to
18.2% for the year ended December 31, 2004 and 15.3% for
the year ended December 31, 2003. From 2004 to 2005, the
25.1% increase in interconnection revenues was primarily due to
a 24.9% increase in net interconnection charges paid to TELKOM
by mobile cellular operators to Rp.6,685.1 billion and a
33.3% increase in interconnection revenue from international
calls to Rp.854.8 billion. TELKOM recognizes these
international long-distance revenues as interconnection
revenues. From 2003 to 2004, the increase in interconnection
revenues was primarily due to a 36.9% increase in net
interconnection charges paid to TELKOM by mobile cellular
operators to Rp.5,351.6 billion and a 248.3% increase in
interconnection revenues from international calls to
Rp.641.2 billion. On February 8, 2006, the MoCI issued
Regulation No. 8/2006, which mandates a new cost-based
interconnection tariff scheme for all telecommunications network
and service operators and will become effective on
January 1, 2007. Under the new scheme, the operator of the
network on which calls terminate will determine the
interconnection charge to be received by it based on a formula
to be mandated by the Government, which will require the
operators to charge for calls based on the costs of carrying
such calls. For further information on the interconnection
scheme, see Item 4. "Information on the
Company — B. Business Overview —
Regulations — Interconnection"; and Item 3.
"Key Information" — D. Risk
Factors — Risks relating to TELKOM and its
subsidiaries — TELKOM operates in a legal and
regulatory environment that is undergoing significant reforms
and such reforms may adversely affect TELKOM's
business".
Increase in TELKOM's
Data and Internet Revenues
Data and Internet revenues accounted for approximately 16.6% of
TELKOM's consolidated operating revenues for the year ended
December 31, 2005, compared to 14.2% for the year ended
December 31, 2004 and 11.5% for the year ended
December 31, 2003. TELKOM's revenues from its data and
Internet services increased by 44.2% from 2004 to 2005 and by
54.7% from 2003 to 2004. The increase in data and Internet
revenues in 2005 was primarily due to a 49.0% increase in
revenues generated from SMS services, a 69.2% increase in
revenues from data communication and a 28.2% increase in
revenues from internet connectivity. The increase in 2004 was
primarily due to a 61.6% increase in revenues generated from SMS
services and a 70.3% increase in revenues from Internet
connectivity services. From 2004 to 2005, revenues from VoIP
services decreased by 8.2% to Rp.292.7 billion
(US$29.8 million) due to a 27.8% decrease in total outgoing
international VoIP calls, as more TELKOM customers used
TELKOM'S
TIC-007
service rather than VoIP, which decrease was partially offset by
a 21.0% increase in total incoming (international termination)
VoIP traffic.
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Table of Contents
Acquisition and
Consolidation of KSO IV and III
TELKOM's operating revenues and expenses for the three-year
period from 2003 through 2005 have been affected by the
acquisition and subsequent consolidation of KSO IV in
January 2004 and the acquisition and subsequent consolidation of
AriaWest (KSO III) in July 2003. Prior to
consolidation of KSO IV and III, TELKOM received revenues
from these KSO regions in the form of guaranteed minimum monthly
payments and additional monthly revenue sharing payments from
the revenues of the KSO regions after payment of the minimum
monthly payments and certain operating expenses. TELKOM was not
directly allocated any of the operating expenses for the KSO
regions. See Item 4. "Information on the
Company — B. Business Overview — Joint
Operation Scheme." Upon consolidation, TELKOM no longer
receives the minimum monthly payments and revenue sharing
payments and instead consolidates all of the revenues and
expenses of such KSO regions on its books. As a result, KSO
revenues have declined in the three-year period from 2003
through 2005 due to the acquisitions of KSO IV and III
discussed above. Following these acquisitions, KSO VII is
the only remaining KSO region under the joint operation scheme.
In connection with the acquisition of KSO IV in January 2004,
TELKOM recognized the full amount of the liability for the
purchase price of approximately US$390.7 million or
equivalent to Rp.3,285.4 billion, which represents the
present value of fixed monthly payments (totaling
US$517.1 million) to be paid to MGTI (the investor in
KSO IV) beginning in February 2004 through December
2010 using a discount rate of 8.3% plus direct costs of the
business combination. The allocation of the acquisition cost
consisted of Rp.2,377.1 billion for property, plant and
equipment and Rp.908.2 million for intangible assets. The
allocation of the acquisition cost was based on an independent
appraisal of fair values. Intangible assets identified from this
acquisition represent the right to operate the business in the
KSO area and the amount is being amortized over the remaining
term of the KSO agreement of 6.9 years. As of
December 31, 2005, the remaining monthly payments to be
made to MGTI, before unamortized discount, amounted to
US$393.3 million (Rp.3,868.4 billion) and is presented
in TELKOM's balance sheet as "Liabilities of business
acquisitions."
Write-down of Assets, Depreciation Expense, Loss on
    Procurement Commitments, and Operations Maintenance and
    Telecommunication Services Expenses
TELKOM's depreciation expense and operations, maintenance
and telecommunication services expenses have increased
significantly during the three-year period from 2003 through
2005. These increases are primarily related to Telkomsel's
expansion of its network capacity due to the growth in its
subscriber base and an increase in TELKOM's fixed assets
due to deployment of fixed wireless. In particular, TELKOM began
an aggressive deployment of fixed wireless in KSO III and
KSO IV following TELKOM's acquisitions of KSO III in
July 2003 and KSO IV in January 2004 and in 2005 alone
deployed 47 units of Remote Access Servers to service its
fixed wireless subscribers. Telkomsel's subscriber base has
increased from 9,588,807 subscribers as of December 31,
2003 to 16,290,508 subscribers as of December 31, 2004 and
24,269,353 subscribers as of December 31, 2005.
TELKOM's fixed wireless service grew substantially from
1,429,368 lines in service as of December 31, 2004 to
4,061,867 lines in service as of December 31, 2005.
As a result of the Government's decision issued in the
first quarter of 2005 to rearrange the frequency spectra used by
the telecommunication service providers, TELKOM can no longer be
able to utilize certain frequency spectra it currently uses to
support fixed wireline cable network commencing at the end of
2006. Consequently, certain of TELKOM's cable network
facilities within the fixed wireline segment which comprise
primarily of WLL and approach link operating in the affected
frequency spectra, can no longer be used commencing at the end
of 2006. Accordingly, TELKOM shortened its estimate of the
remaining useful lives for WLL and approach link equipment in
the first quarter of 2005 and began depreciating the then
remaining net book value of those assets through
December 31, 2006. The effect of this change in estimate
increased depreciation expense by Rp.471.2 billion in 2005.
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Further, in August 2005, the Government decided to set aside
1900 MHz for the exclusive use in the 3G services and 800
MHz frequency spectrum for the exclusive use in CDMA-based
technology network commencing at the end of 2007. As a result,
TELKOM's BSS equipment in Jakarta and West Java areas,
which operates in 1900 MHz and are part of the fixed
wireless transmission installation and equipment, can no longer
be used commencing at the end of 2007. Following the
Government's decision, TELKOM's reviewed the
recoverable amount of cash-generating unit to which the affected
fixed wireless asset belongs and recognized a write-down of
Rp.616.8 billion relating to this equipment in 2005. In
addition, TELKOM changed its estimate of the remaining useful
lives for the Jakarta and West Java BSS equipment and
depreciates the remaining net book value of those assets through
June 30, 2007, the date when all of TELKOM's
1900 MHz BSS equipment are expected to be completely
replaced with the 800 MHz BSS equipment. The effect of this
change in estimate increased depreciation expense by
Rp.159.0 billion in 2005. In addition, TELKOM recognized a
loss relating to non-cancellable contracts for procurement of
the 1900 MHz transmission installation and equipment in Jakarta
and West Java areas amounting to Rp.79.4 billion in 2005.
Changes in Methods of Accounting under Indonesian GAAP
In June 2004, the Indonesian Financial Accounting Standards
Board issued PSAK No. 24 (Revised 2004), "Employee
Benefits" (PSAK 24R), which is a revision of PSAK
No. 24, "Accounting for Pension Benefits."
PSAK 24R changes TELKOM's method of accounting for
employee benefit plans by requiring the vested portion of prior
service cost be immediately recognized and that the cumulative
unrecognized actuarial gain or loss exceeding ten percent of the
greater of the present value of the projected benefit obligation
and the fair value of plan assets be amortized over the expected
average remaining working lives of the employees participating
in the plan. PSAK 24R requires TELKOM to adopt its
provisions retrospectively as of January 1, 2004, (the
"Transition Date") by way of the recognition of:
(i) a liability computed in accordance with the provisions
of PSAK 24R determined as of the Transition Date (the
"Transition Liability") and (ii) the difference
between the Transition Liability and the liability previously
recognized for employee benefits as of the same date pursuant to
then in effect accounting standards, as a cumulative effect of a
change in method of accounting in stockholders' equity.
Accordingly, TELKOM has restated its consolidated balance sheet
as of the Transition Date by increasing its liability for
employee benefits previously reported by Rp.3,218.7 billion
with a corresponding decrease in consolidated stockholders'
equity of Rp.2,618.7 billion, net of tax of
Rp.600.1 billion. In addition, the adoption of PSAK 24R,
effective as of January 1, 2004, has resulted in an
increase in the previously reported net income for the year
ended December 31, 2004 in the amount of
Rp.485.4 billion, net of tax of Rp.175.5 billion.
In July 2004, the Indonesian Financial Accounting Standards
Board issued PSAK No. 38 (Revised 2004), "Accounting
for Restructuring Transactions between Entities under Common
Control," ("PSAK 38R"). PSAK 38R
changes TELKOM's method of accounting for previously
recorded restructuring transactions between entities under
common control when certain conditions are met. The provisions
of PSAK 38R were effective for TELKOM beginning
January 1, 2005, the initial application date. Pursuant to
a ruling issued by the Indonesian Capital Market and Financial
Institution Supervisory Agency ("BAPEPAM") regarding
the initial application of PSAK 38R by public entities,
TELKOM is required to reclassify the previously recorded
difference in value of restructuring transactions between
entities under common control as a direct adjustment to retained
earnings as of the initial application date when the common
control relationship between the transacting parties no longer
exists as of January 1, 2005. The difference in value of
restructuring transactions between entities under common control
as of January 1, 2005 amounting to Rp.7,288.3 billion
arose from transactions between TELKOM and Indosat, which at the
time of the transactions was also controlled by the Government
and therefore was an entity under common control with TELKOM.
This common control relationship ceased to exist in
December 2002 when the Government sold its 41.94% ownership
interest in Indosat to STT Communications Ltd.
("STTC") and waived its special voting rights with
respect to the Series A Dwiwarna share. In accordance with
the BAPEPAM ruling, TELKOM has reclassified the difference in
value of restructuring transactions between entities under
common control resulting from the cross-
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Table of Contents
ownership transactions and acquisition of Pramindo as a charge
to retained earnings as of January 1, 2005. This
reclassification has no effect on net consolidated
stockholders' equity. See Note 4b to TELKOM's
consolidated financial statements.
Basis of Presentation
Consolidation of TELKOM's Financial Statements
TELKOM consolidates its financial statements and those of
subsidiaries in which TELKOM has direct ownership interest of
more than 50% or where TELKOM controls the subsidiaries.
TELKOM consolidated AriaWest's financial statements into
its 2003 financial statements from July 31, 2003, the date
of acquisition of 100% equity interest in AriaWest.
TELKOM consolidated the revenues and expenses of KSO IV
from February 2004 after it obtained the legal right to control
financial and operating decisions of KSO IV on
January 20, 2004.
Foreign Exchange Translations
The functional currency of TELKOM and its subsidiaries is the
Indonesian Rupiah and the books of accounts of TELKOM and its
subsidiaries are maintained in Indonesian Rupiah. Transactions
in foreign currencies are translated into Indonesian Rupiah at
the rates of exchange prevailing at the transaction date. At the
balance sheet date, the exchange rates used for translation of
monetary assets and monetary liabilities denominated in foreign
currencies are the buying and selling rates quoted by Reuters
prevailing at the balance sheet date. The Reuters buy and sell
rates, applied respectively to translate monetary assets and
monetary liabilities, were Rp.8,430 and Rp.8,450 to US$1.00 as
of December 31, 2003, Rp.9,280 and Rp.9,300 to US$1.00 as
of December 31, 2004 and Rp.9,825 and Rp.9,835 to US$1.00
as of December 31, 2005. These rates differ from the rates
used for convenience translations in this Annual Report,
including in the tables appearing in the discussion and analysis
below. See Note 2(e) to the consolidated financial
statements.
The resulting foreign exchange gains and losses, realized and
unrealized, are credited or charged to income of the current
year, except for foreign exchange differences incurred on
borrowings during the construction of qualifying assets which
are capitalized to the extent that the borrowings can be
attributed to the construction of those qualifying assets.
The consolidated financial statements are stated in Indonesian
Rupiah. The translations of Indonesian Rupiah amounts for 2005
into United States Dollars are included solely for the
convenience of the readers and have been made using the average
of the market buy and sell rates of Rp.9,830 to US$1.00
published by Reuters on December 31, 2005. The convenience
translations should not be construed as representations that the
Rupiah amounts have been, could have been, or could in the
future be, converted into United States Dollars at this or any
other rate of exchange. See Note 3 to the consolidated
financial statements.
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Table of Contents
TELKOM's Operating Revenues
The following table sets out TELKOM's operating revenues,
itemized according to TELKOM's main products and services,
for the three years 2003 through 2005, with each item also
expressed as a percentage of total operating revenues:
Year Ended December 31,
2003
2004
2005
2005
Rp. (billion)
%
Rp. (billion)
%
Rp. (billion)
%
US$ (million)
Operating Revenues
Telephone
Fixed lines
8,896.9
32.8
10,645.0
31.4
10,781.3
25.8
1,096.8
Cellular
8,458.8
31.2
10,421.3
30.7
14,570.9
34.9
1,482.3
Revenue under Joint Operation Schemes (JOS)
1,486.3
5.5
656.6
1.9
588.7
1.4
59.9
Interconnection
4,162.1
15.3
6,188.0
18.2
7,742.1
18.5
787.6
Data and Internet
3,108.6
11.5
4,808.8
14.2
6,934.3
16.6
705.4
Network
517.9
1.9
654.3
1.9
586.6
1.4
59.7
Revenue-sharing arrangements
258.5
1.0
280.6
0.8
302.3
0.7
30.8
Other telecommunications services
226.9
0.8
293.2
0.9
301.0
0.7
30.5
Total Operating Revenues
27,116.0
100.0
33,947.8
100.0
41,807.2
100.0
4,253.0
Subsequent to an announcement by the DGPT in August 2001 that
the Government intended to terminate TELKOM's exclusive
right to provide local and domestic long-distance services,
TELKOM's exclusive right to provide domestic local service
was finally terminated in August 2002 and TELKOM's
exclusive right to provide domestic
long-distance
service
was likewise terminated in August 2003. TELKOM, however,
received its commercial license to provide IDD fixed line
services on May 13, 2004. As a result of the termination of
TELKOM's exclusive right to provide local and domestic
long-distance service, Indosat, a competitor of TELKOM, received
its commercial license to provide domestic long-distance
services on May 13, 2004 and began offering fixed wireless
services in August 2004. Indosat began offering its domestic
long-distance service in late 2004. TELKOM expects that revenues
from providing interconnection services to new entrants in the
domestic local and domestic
long-distance
markets
will increase and its market share of fixed line services will
decrease slightly in the future because of the liberalization of
these markets. With regard to IDD fixed line services, TELKOM
began offering these services to its customers on June 7,
2004 under the "TIC 007" brand. TELKOM recognizes
international
long-distance
revenues
from TELKOM's IDD service
(TIC-007)
as
interconnection revenues.
Fixed Line Telephone
Revenues
The components of fixed line revenues are local and domestic
long-distance
usage
charges, monthly subscription charges, installation charges,
phone cards and others. Local and domestic
long-distance
usage
charges, monthly subscription charges and installation charges
relate to both fixed wireline and fixed wireless telephones.
Local and domestic
long-distance
usage and
monthly subscription charges are determined by
telecommunications operators based on a formula set by the
Government that determines maximum tariff levels. The maximum
tariff levels apply uniformly throughout Indonesia.
TELKOM's monthly subscription charges are based on a
uniform schedule of charges that vary according to the type of
user and the type of services provided. Local and domestic
long-distance
usage
charges vary depending on
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Table of Contents
the distance called, duration and time band, while installation
charges, phone cards and other services charges are set by
individual operators. See Item 5. "Operating and
Financial Review and Prospects — A. Operating
Results — Overview — Limited Increases in
Tariffs".
Most fixed line revenues are recognized as services are
provided, except the installation charges are recognized as
revenue when a fixed line (referred to as an
"installation" in the consolidated financial
statements) is placed in service.
Fixed line telephone revenues for the three years 2003 through
2005 are set out below, with each item also expressed as a
percentage of operating revenues:
Year Ended December 31,
2003
2004
2005
2005
Rp. (billion)
%
Rp. (billion)
%
Rp. (billion)
%
US$ (million)
Fixed Line Telephone Revenues
Local and domestic long-distance usage
6,561.8
24.2
7,439.3
21.9
7,223.1
17.3
734.8
Monthly subscription charges
1,948.8
7.2
2,934.9
8.6
3,289.8
7.9
334.7
Installation charges
223.1
0.8
201.3
0.6
197.3
0.5
20.1
Phone cards
34.4
0.1
15.6
0.1
10.9
0.0
1.1
Others
128.8
0.5
53.9
0.2
60.2
0.1
6.1
Total
8,896.9
32.8
10,645.0
31.4
10,781.3
25.8
1,096.8
Cellular Telephone
Revenues
The main component of cellular telephone revenues is air time
charges. Cellular telephone revenues also include monthly
subscription charges, connection fee charges and features.
Air time charges and monthly subscription charges are determined
by telecommunications operators based on maximum tariff levels
fixed by the Government. The maximum tariff levels apply
uniformly throughout Indonesia. Connection fee charges are
determined by individual operators. Only postpaid subscribers
pay connection and monthly subscription fees, while prepaid
customers generally pay higher air time usage charges. In
TELKOM's consolidated statements of income, a portion of
revenues from sales of prepaid starter packs is also recorded as
connection fees.
In the case of postpaid subscribers, monthly subscription
charges are recognized when earned (i.e., in the month to which
they apply), while connection fee revenue is recognized as
income when connections take place. In the case of prepaid
subscribers, revenues from "starter packs" are
recognized upon delivery to distributors, dealers or directly to
customers, while revenues from pulse refill vouchers are
recognized initially as unearned income and thereafter
recognized proportionately as revenue based on successful calls
made using the stored value of the voucher or when the unused
stored value has expired. Revenues recognized are net of dealer
discounts.
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Table of Contents
Cellular telephone revenues for the three years 2003 through
2005 are set out below, with each item also expressed as a
percentage of operating revenues:
Year Ended December 31,
2003
2004
2005
2005
Rp. (billion)
%
Rp. (billion)
%
Rp. (billion)
%
US$ (million)
Cellular Telephone Revenues
Air time charges
7,677.9
28.3
9,825.7
28.9
13,666.3
32.7
1,390.3
Monthly subscription charges
580.5
2.2
448.5
1.3
383.5
0.9
39.0
Connection fee charges
194.1
0.7
55.8
0.2
64.1
0.2
6.5
Features
6.3
0.0
91.3
0.3
457.0
1.1
46.5
Total
8,458.8
31.2
10,421.3
30.7
14,570.9
34.9
1,482.3
Joint Operation Scheme
("KSO") Revenues
KSO revenues consist of:
•
Initial payment made by the KSO partners, which is amortized
    over the life of the KSO Agreement;
•
Minimum TELKOM Revenues ("MTR"), being a specified
    minimum payment, which is payable monthly; and
•
Distributable TELKOM Revenues ("DTR"), being a
    specified percentage of KSO revenues after deduction of
    operating expenses and MTR obligation, which is payable monthly.
KSO revenues have been decreasing due to the acquisition of KSO
partners' interests in the KSOs, resulting in the revenues
of the KSOs being consolidated and included under Fixed Line
revenues.
KSO revenues for the three years 2003 through 2005 are set out
below, with each item also expressed as a percentage of
operating revenues:
Year Ended December 31,
2003
2004
2005
2005
Rp. (billion)
%
Rp. (billion)
%
Rp. (billion)
%
US$ (million)
KSO Revenues
Minimum TELKOM Revenues
899.9
3.3
296.0
0.9
268.6
0.6
27.3
Share in Distributable KSO Revenues
583.0
2.2
349.5
1.0
318.6
0.8
32.4
Amortization of unearned initial investor payments under Joint
    Operation Schemes
3.4
0.0
11.1
0.0
1.5
0.0
0.2
Total
1,486.3
5.5
656.6
1.9
588.7
1.4
59.9
Interconnection
Revenues
The components of interconnection revenues are revenues from
cellular interconnection, international interconnection and
other interconnection. Interconnection revenues consist
primarily of fees charged to other domestic and international
carriers when calls originating in their networks interconnect
with TELKOM's fixed line network and Telkomsel's
mobile cellular network. Interconnection revenues also include
international roaming by overseas operators to Telkomsel's
mobile cellular network, a retail fee charged to TELKOM's
subscribers for an outgoing call and international
long-distance
revenues
from TELKOM's IDD service
(TIC-007)
since the
launch of TELKOM's IDD service
(TIC-007)
in June 2004.
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Fees charged for interconnection are determined contractually
between operators, subject to maximum fee levels established by
Government regulation. Revenues from interconnection with other
domestic and international telecommunications carriers are
recognized as incurred and are presented net of interconnection
expenses paid to other operators. Interconnection revenues are
typically accrued initially and settled among operators monthly
and can fluctuate significantly as a result of adjustments among
operators to accrued amounts at the time of settlement. On
March 11, 2004, the MoC issued a decree stating that
cost-based interconnection will commence beginning
January 1, 2005. However, the implementation of the new
cost-based interconnection was delayed due to difficulties in
drafting the relevant regulations and selecting the appropriate
tariff scheme. On February 8, 2006, the MoCI issued
Regulation No. 8/2006, which mandates a new cost-based
interconnection tariff scheme for all telecommunications network
and services operators. There can be no assurance as to how this
will affect TELKOM's business, financial condition and
results of operations. For further information on the
interconnection scheme, see Item 4. "Information on
the Company — B. Business Overview —
Regulations — Interconnection"; and Item 3.
"Key Information" — D. Risk
Factors — Risks relating to TELKOM and its
subsidiaries — TELKOM operates in a legal and
regulatory environment that is undergoing significant reforms
and such reforms may adversely affect TELKOM's
business".
Interconnection revenues for the three years 2003 through 2005
are set out below, with each item also expressed as a percentage
of operating revenues:
Year Ended December 31,
2003
2004
2005
2005
Rp. (billion)
%
Rp. (billion)
%
Rp. (billion)
%
US$ (million)
Interconnection Revenues
Cellular
3,908.3
14.4
5,351.6
15.7
6,685.1
16.0
680.1
International
184.1
0.7
641.2
1.9
854.8
2.0
87.0
Other
69.7
0.2
195.2
0.6
202.2
0.5
20.5
Total
4,162.1
15.3
6,188.0
18.2
7,742.1
18.5
787.6
Data
and Internet Revenues
The components of data and Internet revenues are revenues from
SMS, internet, data communication, VoIP and
E-business
services.
Data and Internet revenue for the three years 2003 through 2005
are set out below, with each item also expressed as a percentage
of operating revenues:
Year Ended December 31,
2003
2004
2005
2005
Rp. (billion)
%
Rp. (billion)
%
Rp. (billion)
%
US$ (million)
Data and Internet Revenue
SMS
2,205.1
8.2
3,562.7
10.5
5,309.2
12.7
540.1
Internet
325.9
1.2
554.9
1.6
711.4
1.7
72.4
Data communication
245.6
0.9
360.7
1.1
610.4
1.5
62.1
VoIP
328.3
1.2
318.9
1.0
292.7
0.7
29.8
E-business
3.7
0.0
11.6
0.0
10.6
0.0
1.0
Total
3,108.6
11.5
4,808.8
14.2
6,934.3
16.6
705.4
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Network Revenues
The components of network revenues are revenues from satellite
transponder leases and leased lines. Network revenue for the
three years 2003 through 2005 are set out below, with each item
also expressed as a percentage of operating revenues:
Year Ended December 31,
2003
2004
2005
2005
Rp. (billion)
%
Rp. (billion)
%
Rp. (billion)
%
US$ (million)
Network Revenue
Satellite transponder lease
270.9
1.0
210.9
0.6
239.5
0.6
24.4
Leased lines
247.0
0.9
443.4
1.3
347.1
0.8
35.3
Total
517.9
1.9
654.3
1.9
586.6
1.4
59.7
Revenues under
Revenue-Sharing Arrangements
The components of revenues under revenue-sharing arrangements
are net share in revenue earned under revenue-sharing
arrangements and amortization of unearned income under
revenue-sharing arrangements.
Revenues under revenue-sharing arrangements for the three years
2003 through 2005 are set out below, with each item also
expressed as a percentage of operating revenues:
Year Ended December 31,
2003
2004
2005
2005
Rp. (billion)
%
Rp. (billion)
%
Rp. (billion)
%
US$ (million)
Revenues Under Revenue-Sharing Arrangements
Net share in revenue earned under Revenue-Sharing Arrangements
200.1
0.8
198.6
0.6
165.6
0.4
16.9
Amortization of unearned income under Revenue-Sharing
    Arrangements
58.4
0.2
82.0
0.2
136.7
0.3
13.9
Total
258.5
1.0
280.6
0.8
302.3
0.7
30.8
Other Telecommunications
Services Revenues
Other telecommunications services revenues primarily represent
telex and telegram revenues, revenues from the telephone
directory assistance business and revenues from cable television
services. In 2005, TELKOM's revenues from other
telecommunications services increased by Rp.7.8 billion, or
2.7%, from Rp.293.2 billion in 2004 to
Rp.301.0 billion in 2005. The increase in other
telecommunications services revenues was primarily due to an
increase in
pay-TV
revenues and directory assistance revenues, which increase was
partially offset by a decrease in telex and telegram revenues
due to technological advancement.
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Table of Contents
TELKOM's Operating Expenses
The following table sets out TELKOM's operating expenses
for the three years 2003 through 2005, with each item also
expressed as a percentage of operating revenues:
Year Ended December 31,
2004
2003
(As restated*)
2005
2005
Rp. (billion)
%
Rp. (billion)
%
Rp. (billion)
%
US$ (million)
Operating Expenses
Depreciation
4,779.5
17.6
6,438.6
19.0
7,570.7
18.1
770.2
Operations, maintenance and telecommunications services
3,338.7
12.3
4,529.6
13.3
5,916.3
14.1
601.9
Personnel
4,440.1
16.4
4,910.0
14.5
6,563.0
15.7
667.6
General and administrative
2,078.8
7.7
2,599.8
7.7
2,764.0
6.6
281.2
Marketing
502.9
1.8
881.9
2.6
1,126.2
2.7
114.6
Write-down of assets
—
—
—
—
616.8
1.5
62.7
Loss on procurement commitments
—
—
—
—
79.4
0.2
8.1
Total Operating Expenses
15,140.0
55.8
19,359.9
57.1
24,636.4
58.9
2,506.3
*
The 2004 figures have been restated due to the adoption of PSAK
    24R. See "— Changes in Methods of Accounting under
    Indonesian GAAP" and Note 4a to TELKOM's consolidated
    financial statements.
Depreciation Expense,
Write-down of Assets and Loss on Procurement Commitments
Depreciation expense relates to TELKOM's property, plant
and equipment. TELKOM depreciates its property, plant and
equipment, except land, using the straight-line method, based on
the useful lives of the assets, commencing in the month such
assets were placed into service. See Note 2k to the
consolidated financial statements.
In accordance with Indonesian GAAP, TELKOM capitalizes interest
expenses and foreign exchange gains or losses for assets under
construction and depreciates these amounts over the useful lives
of such assets. In 2003, 2004 and 2005, TELKOM capitalized
interest expenses for assets under construction of
Rp.22.9 billion, Rp.57.7 billion and nil,
respectively. TELKOM capitalized foreign exchange losses (gains)
for assets under construction of nil, Rp.74.3 billion and
nil in 2003, 2004 and 2005, respectively.
As a result of the Government's decisions issued in 2005 on
the rearrangement of frequency spectra utilized by the
telecommunication industry, certain of TELKOM's fixed
wireline cable network facilities, which comprise primarily of
WLL and approach link, and TELKOM's BSS equipment in
Jakarta and West Java areas, which are part of transmission
installation and equipment for fixed wireless assets, cannot be
used through the end of their initial estimated useful lives. In
2005, TELKOM recognized a write-down of assets of
Rp.616.8 billion related to transmission installation and
equipment of fixed wireless assets and loss on procurement
commitments of Rp.79.4 billion related to non-cancelable
contracts for procurement of the 1900 MHz transmission
installation and equipment in Jakarta and West Java areas.
TELKOM also shortened its estimate of the remaining useful lives
for fixed wireline WLL and approach link equipment and the
Jakarta and West Java fixed wireless BSS equipment. See
Item 5. "Operating and Financial Review and
Prospects — A. Operating Results —
Overview — Write-down of Assets, Depreciation Expense,
Loss on Procurement Commitments, and Operations, Maintenance and
Telecommunication Services Expenses."
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Table of Contents
Operations, Maintenance and
Telecommunications Services Expenses
Operations, maintenance and telecommunications services expenses
for the three years 2003 through 2005 are set out below, with
each item also expressed as a percentage of operating revenues:
Year Ended December 31,
2003
2004
2005
2005
Rp. (billion)
%
Rp. (billion)
%
Rp. (billion)
%
US$ (million)
Operations, Maintenance and Telecommunications Services
    Expenses
Operations and maintenance
1,744.8
6.4
2,398.2
7.1
3,075.1
7.3
312.8
Concession fees
610.7
2.3
807.3
2.4
1,257.4
3.0
128.0
Cost of phone, SIM and RUIM cards
181.3
0.7
366.7
1.1
582.3
1.4
59.2
Electricity, gas and water
300.4
1.1
385.7
1.1
372.5
0.9
37.9
Vehicles and supporting facilities
115.7
0.4
181.7
0.5
217.2
0.5
22.1
Insurance
157.1
0.6
151.3
0.4
136.4
0.3
13.9
Leased lines
127.0
0.5
132.8
0.4
124.2
0.3
12.6
Traveling
29.8
0.1
42.2
0.1
33.5
0.1
3.4
Others
71.9
0.2
63.7
0.2
117.7
0.3
12.0
Total
3,338.7
12.3
4,529.6
13.3
5,916.3
14.1
601.9
Personnel Expenses
The main components of personnel expenses in 2005 were salaries
and related benefits, which were Rp.2,165.9 billion
(US$220.3 million), vacation pay, incentives and other
benefits, which were Rp.1,615.6 billion
(US$164.4 million), and employee income tax, which was
Rp.856.4 billion (US$87.1 million).
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Table of Contents
Personnel expenses for the three years 2003 through 2005 are set
out below, with each item also expressed as a percentage of
operating revenues:
Year Ended December 31,
2004
2003
(As restated*)
2005
2005
Rp. (billion)
%
Rp. (billion)
%
Rp. (billion)
%
US$ (million)
Personnel Expenses
Salaries and related benefits
1,574.2
5.8
1,796.9
5.3
2,165.9
5.2
220.3
Vacation pay, incentives and other benefits
816.1
3.0
1,156.1
3.4
1,615.6
3.8
164.4
Early retirements
355.7
1.3
243.5
0.7
486.4
1.2
49.5
Net periodic post-retirement health care benefit cost
641.4
2.4
416.3
1.2
488.6
1.2
49.7
Net periodic pension cost
191.0
0.7
572.4
1.7
532.3
1.3
54.1
Employee income tax
468.8
1.7
523.8
1.5
856.4
2.0
87.1
Long service awards
219.2
0.8
36.9
0.1
201.9
0.5
20.5
Housing
116.9
0.4
103.4
0.3
113.7
0.3
11.6
Medical
9.7
0.1
12.2
0.1
18.0
0.0
1.8
Other employee benefits
4.4
0.0
11.5
0.1
6.0
0.0
0.6
Others
42.7
0.2
37.0
0.1
78.2
0.2
8.0
Total
4,440.1
16.4
4,910.0
14.5
6,563.0
15.7
667.6
*
The 2004 figures have been restated due to the adoption of PSAK
    24R. See "— Change in Method of Accounting under
    Indonesian GAAP" and Note 4a to TELKOM's
    consolidated financial statements.
General and Administrative
Expenses
The main components of general and administrative expenses in
2005 were amortization of goodwill and other intangible assets,
which totaled Rp.918.2 billion (US$93.4 million),
arising from the acquisitions of GSD, Dayamitra, Pramindo,
AriaWest and KSO IV in previous years, provision for doubtful
accounts and inventory obsolescence, which totaled
Rp.489.0 billion (US$49.7 million), and collection
expenses, which totaled Rp.379.1 billion
(US$38.6 million).
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Table of Contents
General and administrative expenses for the three years 2003
through 2005 are set out below, with each item also expressed as
a percentage of operating revenues:
Year Ended December 31,
2003
2004
2005
2005
Rp. (billion)
%
Rp. (billion)
%
Rp. (billion)
%
US$ (million)
General and Administrative Expenses
Professional fees
115.6
0.4
137.3
0.4
131.0
0.3
13.3
Collection expenses
273.8
1.0
359.0
1.1
379.1
0.9
38.6
Amortization of goodwill and other intangible assets
730.7
2.7
872.3
2.6
918.2
2.2
93.4
Training, education and recruitment
126.9
0.5
228.5
0.7
177.9
0.4
18.1
Travel
144.7
0.6
192.6
0.6
171.7
0.4
17.5
Security and screening
110.3
0.4
143.9
0.4
164.4
0.4
16.7
General and social contribution
113.8
0.4
111.8
0.3
204.3
0.5
20.8
Printing and stationery
50.5
0.2
81.0
0.2
50.2
0.1
5.1
Meetings
42.8
0.2
58.3
0.2
40.3
0.1
4.1
Provision for doubtful accounts and inventory obsolescence
326.4
1.2
357.7
1.1
489.0
1.2
49.7
Research and development
9.1
0.0
13.2
0.0
8.4
0.0
0.9
Others
34.2
0.1
44.2
0.1
29.5
0.1
3.0
Total
2,078.8
7.7
2,599.8
7.7
2,764.0
6.6
281.2
Marketing Expenses
Marketing expenses consist of advertising, customer education
and other marketing expenses.
Year Ended December 31,
2003
2004
2005
2005
Rp. (billion)
%
Rp. (billion)
%
Rp. (billion)
%
US$ (million)
Marketing Expenses
Advertising
381.7
1.4
699.6
2.1
795.6
1.9
80.9
Customer education
102.2
0.3
152.4
0.4
305.3
0.7
31.1
Others
19.0
0.1
29.9
0.1
25.3
0.1
2.6
Total
502.9
1.8
881.9
2.6
1,126.2
2.7
114.6
Results of Operations
Year ended December 31,
2005 compared to year ended December 31, 2004
Operating Revenues.
Total operating revenues increased by Rp.7,859.4 billion,
or 23.2%, from Rp.33,947.8 billion in 2004 to
Rp.41,807.2 billion in 2005. Increase in operating revenues
in 2005 was primarily due to increases in revenues from
cellular, interconnection and data and Internet.
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Table of Contents
Fixed Line Telephone Revenues.
Fixed line revenues increased by Rp.136.3 billion, or 1.3%,
from Rp.10,645.0 billion in 2004 to
Rp.10,781.3 billion in 2005. The increase in fixed line
revenues was primarily due to an increase in fixed wireless
revenues, partially offset by a decrease in fixed wireline
revenues. Fixed wireless revenues increased by
Rp.411.3 billion, or 417.1%, from Rp.98.6 billion in
2004 to Rp.509.9 billion in 2005. Fixed wireline revenues
decreased by Rp.275.0 billion, or 2.6%, from
Rp.10,546.4 billion in 2004 to Rp.10,271.4 billion
in 2005.
The increase in fixed wireless revenues was primarily
attributable to a 184.2% growth in the number of subscribers and
lines in service for fixed wireless, from 1,429,368 lines in
service as of December 31, 2004 to 4,061,867 lines in
service as of December 31, 2005, particularly, the 184.7%
growth in the number of lines in service in the
non-KSO
regions,
resulting in an increase of lines in service from 1,317,673 as
of December 31, 2004 to 3,750,821 as of December 31,
2005 primarily due to an aggressive marketing campaign in those
regions from April to June 2005. Such increase was partially
offset by a decrease in fixed wireline revenues which was
primarily due to a 7.6% decrease in local and domestic
long-distance revenues from Rp.7,493.1 billion in 2004 to
Rp.6,920.2 billion.
Cellular Telephone Revenues.
Cellular telephone revenues increased by
Rp.4,149.6 billion, or 39.8%, from Rp.10,421.3 billion
in 2004 to Rp.14,570.9 billion in 2005. The increase in
cellular telephone revenues was primarily due to an increase in
air time charges, connection fee charges for new subscribers and
features, partially offset by a decrease in monthly subscription
charges. Air time charges increased by Rp.3,840.6 billion,
or 39.1%, from Rp.9,825.7 billion in 2004 to
Rp.13,666.3 billion in 2005. Connection fee charges
increased by Rp.8.3 billion, or 14.9%, from
Rp.55.8 billion in 2004 to Rp.64.1 billion in 2005 due
to the growth in KartuHALO and SimPATI net-additional cellular
subscribers. Features increased by Rp.365.7 billion, or
400.6%, from Rp.91.3 billion in 2004 to
Rp.457.0 billion in 2005 due to an increase in sales from
the new feature services introduced in 2005, including ring back
tone, message boards and mobile fax services. Monthly
subscription charges decreased by Rp.65.0 billion, or
14.5%, from Rp.448.5 billion in 2004 to
Rp.383.5 billion in 2005, primarily due to the special
exemption from subscription charges for certain customers
offered by Telkomsel to match similar programs offered by its
competitors. The increase in cellular telephone revenues was
primarily attributable to 49% growth in Telkomsel's total
cellular subscribers from 16,290,508 subscribers as of
December 31, 2004 to 24,269,353 subscribers as of
December 31, 2005. This increase was caused by a 19% growth
in net-additional subscribers from 6,701,701 subscribers in
2004 to 7,978,845 subscribers in 2005. Postpaid subscribers grew
by 11% to 1,470,755 subscribers and prepaid subscribers grew by
52% to 22,798,598 subscribers, in each case as of
December 31, 2005.
As a result of the higher rate of growth in the number of
prepaid subscribers, the proportion of prepaid subscribers to
total subscribers increased from 91.9% as of December 31,
2004 to 93.9% as of December 31, 2005. As a result of the
change in the subscriber mix, with the increased number of
prepaid subscribers as a percentage of total subscribers,
blended monthly ARPU decreased from approximately Rp.102,000 in
2004 to approximately Rp.87,000 in 2005. Despite the decrease in
overall ARPU for voice, the SMS/non-voice ARPU for postpaid
increased (by approximately 15%) due to the increase in premium
SMS, mobile banking services and other value-added services.
Interconnection Revenues.
Net interconnection revenues increased by
Rp.1,554.1 billion, or 25.1%, from Rp.6,188.0 billion
in 2004 to Rp.7,742.1 billion in 2005. Net interconnection
revenues comprises net interconnection revenues from
TELKOM's fixed line network (after eliminating net
interconnection revenues for interconnections with
Telkomsel's mobile cellular network) and net
interconnection revenues from Telkomsel's mobile cellular
network (after eliminating net interconnection expense from
interconnections with TELKOM's fixed line network).
Interconnection revenues included incoming international long-
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Table of Contents
distance revenues from TELKOM's IDD service (TIC-007), net
of interconnection charges for outgoing international
long-distance calls.
Cellular interconnection revenues increased by
Rp.1,333.5 billion, or 24.9%, from Rp.5,351.6 billion
in 2004 to Rp.6,685.1 billion in 2005, primarily due to the
growth of cellular subscribers in Indonesia. International
interconnection revenues increased by Rp.213.6 billion, or
33.3%, from Rp.641.2 billion in 2004 to
Rp.854.8 billion in 2005, primarily due to an increase in
incoming and outgoing IDD traffic from domestic operators. Other
interconnection revenues increased by Rp.7.0 billion, or
3.6%, from Rp.195.2 billion in 2004 to
Rp.202.2 billion in 2005, primarily due to the growth of
fixed wireless subscribers of Indosat and PT Bakrie Telecom.
TELKOM's interconnection revenues accounted for
approximately 18.5% of TELKOM's consolidated operating
revenues for the year ended December 31, 2005, compared to
18.2% for the year ended December 31, 2004.
KSO Revenues (Joint Operation Scheme Revenues).
KSO revenues decreased by Rp.67.9 billion, or 10.3%, from
Rp.656.6 billion in 2004 to Rp.588.7 billion in 2005.
The decrease in KSO revenues was primarily due to a decrease in
MTR and DTR in 2005, resulting from the business acquisition of
KSO IV. MTR decreased by Rp.27.4 billion, or 9.2%, from
Rp.296.0 billion in 2004 to Rp.268.6 billion in 2005.
DTR decreased by Rp.30.9 billion, or 8.8%, from
Rp.349.5 billion in 2004 to Rp.318.6 billion in 2005.
Amortization of unearned initial payments decreased by
Rp.9.6 billion, or 86.5%, from Rp.11.1 billion in 2004
to Rp.1.5 billion in 2005 due to the recognition in 2004 of
the remaining portion of unearned initial payments for KSO IV
following the acquisition of KSO IV.
Data and Internet Revenues.
Data and Internet revenues increased by Rp.2,125.5 billion,
or 44.2%, from Rp.4,808.8 billion in 2004 to
Rp.6,934.3 billion in 2005. The increase in data and
Internet revenues was primarily due to significant increases in
SMS revenues, internet connectivity revenues and data
communications revenues, partially offset by a decrease in VoIP
revenues. SMS revenues increased by Rp.1,746.5 billion, or
49.0%, from Rp.3,562.7 billion in 2004 to
Rp.5,309.2 billion in 2005 mainly due to a significant
growth in SMS traffic from Telkomsel subscribers. Internet
connectivity revenues increased by Rp.156.5 billion, or
28.2%, from Rp.554.9 billion in 2004 to
Rp.711.4 billion in 2005 due to increased marketing efforts
to boost sales of data and Internet services, an increase in
usage of the dial-up Internet for TELKOMNet Instant and premium
prepaid dial-up internet access and an increase in Speedy
subscribers in 2005. Data communication revenues increased by
Rp.249.7 billion, or 69.2%, from Rp.360.7 billion in
2004 to Rp.610.4 billion in 2005, due to an increase in new
subscribers of data network services, particularly, frame relay
and IP VPN, primarily used for the internal data networks of
commercial banks. VoIP revenues decreased by
Rp.26.2 billion, or 8.2%, from Rp.318.9 billion in
2004 to Rp.292.7 billion in 2005, due to the decrease in
traffic of outgoing international VoIP calls, primarily
resulting from TELKOM's focused marketing efforts to
promote TELKOM's IDD service (TIC-007), an alternative to
VoIP.
Network Revenues.
Network revenues decreased by Rp.67.7 billion, or 10.3%,
from Rp.654.3 billion in 2004 to Rp.586.6 billion in
2005. Satellite transponder revenues increased by
Rp.28.6 billion, or 13.6%, from Rp.210.9 billion in
2004 to Rp.239.5 billion in 2005, primarily due to an
increase in satellite transponder usage by VSAT providers.
Leased lines revenues decreased by Rp.96.3 billion, or
21.7%, from Rp.443.4 billion in 2004 to
Rp.347.1 billion in 2005 as a result of an increase in the
number of telecommunications operators that use their own
networks.
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Table of Contents
Revenues under Revenue-Sharing Arrangements ("PBHs").
Revenues under revenue-sharing arrangements increased by
Rp.21.7 billion, or 7.7%, from Rp.280.6 billion in
2004 to Rp.302.3 billion in 2005. The increase in revenue
under revenue-sharing arrangements was due to an increase in
amortization of unearned income under the revenue-sharing
arrangements which is in line with the increase in the number of
revenue-sharing arrangements. Amortization of unearned income
under revenue-sharing arrangements increased by
Rp.54.7 billion, or 66.7%, from Rp.82.0 billion in
2004 to Rp.136.7 billion in 2005. Net share in revenue
earned under revenue-sharing arrangements decreased by
Rp.33.0 billion, or 16.6%, from Rp.198.6 billion in
2004 to Rp.165.6 billion in 2005. The total number of
revenue-sharing arrangements increased from 79 contracts as of
December 31, 2004 to 90 contracts as of December 31,
2005. Although the total number of revenue-sharing arrangements
increased, most of them did not generate significant pulse in
2005.
Other Telecommunications Services Revenues.
Other telecommunications services revenues increased by
Rp.7.8 billion, or 2.7%, from Rp.293.2 billion in 2004
to Rp.301.0 billion in 2005. The increase in other
telecommunications services revenues was primarily due to an
increase in pay-TV revenues and directory assistance revenues,
which increase was partially offset by a decrease in telex and
telegram revenues due to technological advancement.
Operating Expenses.
Total operating expenses increased by Rp.5,276.5 billion,
or 27.3%, from Rp.19,359.9 billion in 2004 to
Rp.24,636.4 billion in 2005. The increase in total
operating expenses was attributable to substantial increases in
depreciation, operations, maintenance and telecommunications
services expenses and personnel expenses, and write-down of
assets.
Personnel Expenses.
Personnel expenses increased by Rp.1,653.0 billion, or
33.7%, from Rp.4,910.0 billion in 2004 to
Rp.6,563.0 billion in 2005. The main contributors were the
increase in salaries and related benefits, and vacation pay,
incentives and other benefits, primarily due to the
implementation of performance based remuneration system in July
2004 which resulted in increased base salary, allowances,
incentives and bonuses. These led to an increase in recurring
employee expenses, as follows:
•
salaries and related benefits increased by
    Rp.369.0 billion, or 20.5%, from Rp.1,796.9 billion in
    2004 to Rp.2,165.9 billion in 2005;
•
vacation pay, incentives and other benefits increased by
    Rp.459.5 billion, or 39.7%, from Rp.1,156.1 billion in
    2004 to Rp.1,615.6 billion in 2005; and
•
employee income tax increased by Rp.332.6 billion, or
    63.5%, from Rp.523.8 billion in 2004 to
    Rp.856.4 billion in 2005 which is in line with the increase
    in salaries and related benefits and vacation pay, incentives
    and other benefits.
In addition, long service awards increased by
Rp.165.0 billion, or 447.2%, from Rp.36.9 billion in
2004 to Rp.201.9 billion in 2005, primarily due to the
recognition of actuarial gain of Rp.106.5 billion in 2004,
compared to the recognition of actuarial loss of
Rp.82.9 billion in 2005.
Early retirement expenses increased by Rp.242.9 billion, or
99.8%, from Rp.243.5 billion in 2004 to
Rp.486.4 billion in 2005. The number of employees taking
early retirement increased from 804 in 2004 to 1,017
in 2005.
Other components of personnel expenses did not contribute
significantly to operating expenses in 2005.
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Depreciation Expense.
Depreciation expense increased by Rp.1,132.1 billion, or
17.6%, from Rp.6,438.6 billion in 2004 to
Rp.7,570.7 billion in 2005. The increase in depreciation
expense was primarily due to Telkomsel's expansion of its
network capacity due to the growth in its subscriber base and an
increase in TELKOM's capital expenditures for network
infrastructure (transmission network, backbone and access
network), particularly for fixed wireless. In addition, the
increase in depreciation expense was also because TELKOM
shortened the estimate of remaining useful lives for WLL and
approach link equipment and the Jakarta and West Java BSS
equipment, which contributed to increase in depreciation expense
by Rp.471.2 billion and Rp.159.0 billion,
respectively, in 2005. See Item 5. "Operating and
Financial Review and Prospects — A. Operating
Results — Overview — Write-down of Assets,
Depreciation Expense, Loss on Procurement Commitments, and
Operations, Maintenance and Telecommunication Services
Expenses".
Write-down of Assets.
In 2005, TELKOM recognized a write-down of assets of
Rp.616.8 billion related to transmission installation and
equipment of fixed wireless assets. This write-down was made as
a result of TELKOM's review of the recoverable amount of
the cash-generating unit of its fixed wireless assets following
the Government's decision to set aside the 1900 MHz
frequency spectrum for exclusive use in 3G services and the
800 MHz frequency spectrum for CDMA-based technology
network commencing at the end of 2007. As a result of this
decision, TELKOM's BSS equipment in Jakarta and West Java,
which currently operates in the 1900 MHz frequency
spectrum, will no longer be operational commencing at the end of
2007 and, furthermore, this equipment must be replaced with BSS
equipment operating in 800 MHZ. See Item 5.
"Operating and Financial Review and Prospects —
A. Operating Results — Overview — Write-down
of Assets, Depreciation Expense, Loss on Procurement
Commitments, and Operations, Maintenance and Telecommunication
Services Expenses."
Loss on Procurement Commitments.
In 2005, TELKOM recognized a loss relating to non-cancelable
contracts for procurement of the 1900 MHz transmission
installation and equipment in Jakarta and West Java areas
amounting to Rp.79.4 billion. See Item 5.
"Operating and Financial Review and Prospects —
A. Operating Results — Overview — Write-down
of Assets, Depreciation Expense, Loss on Procurement
Commitments, and Operations, Maintenance and Telecommunication
Services Expenses."
Operations, Maintenance and Telecommunications Services Expenses.
Operations, maintenance and telecommunications services expenses
increased by Rp.1,386.7 billion, or 30.6%, from
Rp.4,529.6 billion in 2004 to Rp.5,916.3 billion in
2005. The increase in operations, maintenance and
telecommunications services expenses was mainly attributable to:
•
an increase in operations and maintenance expenses by
    Rp.676.9 billion to Rp.3,075.1 billion, an increase of
    28.2%, due to an increase in Telkomsel's operations and
    maintenance expenses arising from the growth in the
    Telkomsel's overall capacity from 17.9 million
    subscribers as of December 31, 2004 to 26.2 million
    subscribers as of December 31, 2005. The number of
    Telkomsel's BTSs grew by 59.5% from 6,205 units in
    2004 to 9,895 units in 2005. Telkomsel also increased the
    capacity of its transmitting and receiving stations and
    switching and Intelligent Network equipment;
•
cost of phone, SIM and RUIM cards increased by
    Rp.215.6 billion to Rp.582.3 billion in 2005, an
    increase of 58.8%, due to increases in expenses for TELKOM and
    Telkomsel prepaid cards. TELKOM's cost of fixed wireless
    cards (starterpack/ voucher/replacement) increased by
    Rp.72.5 billion, or 220.4%, from Rp.32.9 billion in
    2004 to Rp.105.4 billion in 2005. Telkomsel's cost of
    cards increased by Rp.142.2 billion, or 44.9%, from
    Rp.316.5 billion in 2004 to
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Rp.458.7 billion in 2005, due to a substantial increase in
    subscribers, particularly prepaid subscribers; and
•
total concession fees increased by Rp.450.1 billion to
    Rp.1,257.4 billion in 2005, an increase of 55.8%, primarily
    due to a 125.3% increase, or Rp.394.5 billion, in
    concession fees paid to the Government from
    Rp.314.7 billion in 2004 to Rp.709.2 billion in 2005,
    in line with the growth in operating revenues and incurrence of
    USO contribution by TELKOM and Telkomsel to the Government
    beginning in 2005. Total USO contribution incurred by TELKOM and
    Telkomsel for the fiscal year 2005 amounted to
    Rp.307.7 billion.
This increase was partially offset by electricity, gas and water
charges, which slightly decreased by Rp.13.2 billion, or
3.4%, from Rp.385.7 billion in 2004 to
Rp.372.5 billion in 2005, reflecting primarily conservation
and more efficient use of utilities, which decrease was
partially offset by an increase in electricity and gas rates in
2005 compared to 2004.
Other components of operations, maintenance and
telecommunications services expenses did not contribute
significantly to operating expenses in 2005.
General and Administrative Expenses.
General and administrative expenses increased by
Rp.164.2 billion, or 6.3%, from Rp.2,599.8 billion in
2004 to Rp.2,764.0 billion in 2005. In particular, in 2005:
•
amortization of goodwill and other intangible assets increased
    by Rp.45.9 billion to Rp.918.2 billion, or 5.3%,
    mainly due to an increase in amortization of intangible assets
    resulting from acquisitions of KSO IV on January 20, 2004
    and the remaining 9.68% interest in Dayamitra on
    December 14, 2004. The intangible assets resulting from
    such acquisitions were amortized for the full year in 2005,
    compared to 2004 when it was only amortized from the date of
    acquisition;
•
collection expenses increased by Rp.20.1 billion to
    Rp.379.1 billion, an increase of 5.6%, generally in line
    with the growth in TELKOM's fixed line subscriber base and
    Telkomsel's mobile cellular subscriber base, which resulted
    in higher collection charges paid to third party collection
    agents;
•
security and screening expenses increased by
    Rp.20.5 billion, or 14.3%, to Rp.164.4 billion in
    2005, primarily due to an increase in the salary of security
    guards by Rp.21.5 billion;
•
provision for doubtful accounts and inventory obsolescence
    increased by Rp.131.3 billion, or 36.7%, to
    Rp.489.0 billion in 2005, primarily due to an increase in
    TELKOM and Telkomsel customer defaults as subscriber numbers
    increased; and
•
general and social contributions expenses increased by
    Rp.92.5 billion, or 82.7%, to Rp.204.3 billion, which
    increase was primarily due to an increase in social contribution
    fund and community development expenses by Rp.60.6 billion
    to Rp.91.9 billion in 2005, pursuant to TELKOM's AGMS
    resolution on June 24, 2005.
This increase was partially offset by:
•
training, education and recruitment expenses, which decreased by
    Rp.50.6 billion to Rp.177.9 billion, or 22.2%,
    following a decrease in TELKOM's employee training programs
    primarily due to a more rigorous selection process for its
    overseas training;
•
travel expenses, which decreased by Rp.20.9 billion, or
    10.9%, to Rp.171.7 billion in 2005, primarily due to a
    decrease in local travel cost by Rp.12.7 billion; and
•
printing and stationery expenses, which decreased by
    Rp.30.8 billion, or 38.0%, to Rp.50.2 billion in 2005,
    primarily due to a decrease in printing and photocopy expenses
    by Rp.14.8 billion, as well as a decrease in stationery
    expenses by Rp.15.6 billion, resulting from the
    implementation of cost-saving plans.
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Other components of general and administrative expenses did not
contribute significantly to operating expenses in 2005.
Marketing Expenses.
Marketing expenses increased by Rp.244.3 billion, or 27.7%,
from Rp.881.9 billion in 2004 to Rp.1,126.2 billion in
2005. The increase in marketing expenses was primarily due to an
increase in Telkomsel's marketing expenses, which increased
by Rp.148.1 billion, or 41.6%, primarily due to increases
in customer education expenses, advertising, promotions and
exhibitions.
Operating Income and Operating Margin
As a result of the foregoing, operating income increased by
Rp.2,582.9 billion, or 17.7%, from Rp.14,587.9 billion
in 2004 to Rp.17,170.8 billion in 2005. TELKOM's
operating margin slightly decreased from 43.0% in 2004 to 41.1%
in 2005.
Other Income (Expenses)
Other expenses decreased by Rp.909.2 billion, or 49.5%,
from Rp.1,838.5 billion in 2004 to Rp.929.3 billion in
2005. The decrease in other expenses was primarily due to a
decrease of 57.7% in foreign exchange losses, primarily due to a
decrease in TELKOM's borrowings denominated in foreign
currencies and the relatively modest depreciation of Rupiah in
2005 compared to 2004. In particular, in 2005:
•
Loss on foreign exchange-net decreased by Rp.704.0 billion
    from a net loss of Rp.1,220.8 billion in 2004 to a net loss
    of Rp.516.8 billion in 2005, primarily due to lower foreign
    exchange losses on US dollar borrowings in 2005 compared to
    2004, resulting from a decrease in TELKOM's US dollar
    borrowings and the relatively modest depreciation of the Rupiah;
•
Interest expense decreased by Rp.92.8 billion, or 7.3%,
    from Rp.1,270.1 billion in 2004 to Rp.1,177.3 billion
    in 2005, reflecting primarily decreases in short-term bank loans
    and long-term debts of TELKOM;
•
Interest income increased by Rp.26.8 billion, or 8.4%, from
    Rp.317.9 billion in 2004 to Rp.344.7 billion in 2005,
    primarily due to a slight increase in the average balance of
    time deposits. See Note 6 to the consolidated financial
    statements; and
•
Others (net) increased by Rp.78.1 billion, from
    Rp.331.1 billion in 2004 to Rp.409.2 billion in 2005,
    primarily resulting from an increase in income from penalty on
    overdue payments.
Other components did not contribute significantly to Other
Income (Expenses) in 2005.
Income Before Tax and Pre-Tax Margin
As a result of the foregoing, income before tax increased by
Rp.3,492.0 billion, or 27.4%, from Rp.12,749.4 billion
in 2004 to Rp.16,241.4 billion in 2005.
Pre-tax
margin
increased from 37.6% in 2004 to 38.8% in 2005.
Income Tax Expense
Income tax expense increased by Rp.1,005.4 billion, or
24.1%, from Rp.4,178.5 billion in 2004 to
Rp.5,183.9 billion in 2005, in line with the increase in
income before tax.
Minority Interest in Net Income of Subsidiaries
Minority interest in the net income of subsidiaries increased by
Rp.1,107.7 billion, or 56.6%, from Rp.1,956.3 billion
in 2004 to Rp.3,064.0 billion in 2005. The increase was
primarily due to improved financial performance by Telkomsel.
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Net Income
As a result of the foregoing, net income increased by
Rp.1,379.0 billion, or 20.8%, from Rp.6,614.6 billion
in 2004 to Rp.7,993.6 billion in 2005. TELKOM's net
income margin decreased from 19.5% in 2004 to 19.1% in 2005.
Equity
Total shareholders' equity increased by
Rp.5,164.4 billion, or 28.5%, from Rp.18,128.0 billion
in 2004 to Rp.23,292.4 billion in 2005. The increase in
total shareholders' equity was primarily the result of net
income of Rp.7,993.6 billion for the year 2005, partially
offset by the cash dividends of Rp.2,921.2 billion.
Retained Earnings.
Appropriated and unappropriated retained earnings decreased by
Rp.2,215.9 billion from Rp.18,686.9 billion in 2004 to
Rp.16,471.0 billion in 2005. The decrease in appropriated
and unappropriated retained earnings was due to the change in
method of accounting for restructuring transactions between
entities under common control, which resulted in TELKOM
reclassifying the difference in value of restructuring
transactions between entities under common control amounting to
Rp.7,288.3 billion as a charge to unappropriated retained
earnings as of January 1, 2005, and cash dividends of
Rp.2,921.2 billion, which decrease was offset by net income
for the year 2005 of Rp.7,993.6 billion. The
reclassification of the difference in value of restructuring
transactions between entities under common control amounting to
Rp.7,288.3 billion as a charge to unappropriated retained
earnings as of January 1, 2005 has no effect on net
consolidated stockholders' equity. See Item 5.
"Operating and Financial Review and Prospects —
A. Operating Results — Changes in Methods of
Accounting under Indonesian GAAP" and Note 4b to
TELKOM's consolidated financial statements.
Year ended December 31, 2004 compared to year ended
December 31, 2003
Operating Revenues.
Total operating revenues increased by Rp.6,831.8 billion,
or 25.2%, from Rp.27,116.0 billion in 2003 to
Rp.33,947.8 billion in 2004. Operating revenues increased
in 2004 for fixed lines, cellular, interconnection, network,
data and Internet, revenue-sharing arrangements and other
telecommunications services. KSO revenues decreased from 2003 to
2004.
Fixed Line Telephone Revenues.
Fixed line revenues increased by Rp.1,748.1 billion, or
19.6%, from Rp.8,896.9 billion in 2003 to Rp.
10,645.0 billion in 2004. The increase in fixed line
revenues was primarily due to increases in local and domestic
long-distance
revenues
and monthly subscription charges in 2004. Local and domestic
long-distance revenues increased by Rp.877.5 billion, or
13.4%, from Rp.6,561.8 billion in 2003 to
Rp.7,439.3 billion in 2004 primarily due to an increase in
the number of subscribers. Monthly subscription charges
increased by Rp.986.1 billion, or 50.6%, from
Rp.1,948.8 billion in 2003 to Rp.2,934.9 billion in
2004 primarily due to an increase in the monthly subscription
fee charged to each subscriber.
The increases were primarily attributable to:
•
the consolidation of KSO IV revenues following the acquisition
    of KSO IV in January 2004, which contributed
    Rp.969.2 billion (US$104.3 million) to the increase in
    fixed lines revenues;
•
TELKOM's increase in fixed line tariffs in 2004 by a
    weighted average increase of 9%, with local charges increasing
    28.2%, DLD tariffs decreasing by an average of 10% and monthly
    subscription charges increasing by varying amounts from 12.1% to
    25.1%; and
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•
the 439.8% growth in the number of subscribers and lines in
    service for fixed wireless, from 264,787 lines in service as of
    December 31, 2003 to 1,429,368 lines in service as of
    December 31, 2004, particularly the 454.2% growth in the
    number of lines in service in the non-KSO regions, resulting
    from the introduction of post-paid fixed wireless services only
    in the first quarter of 2003 and pre-paid fixed wireless service
    only in the third quarter of 2003.
Cellular Telephone Revenues.
Cellular telephone revenues increased by
Rp.1,962.5 billion, or 23.2%, from Rp.8,458.8 billion
in 2003 to Rp.10,421.3 billion in 2004. The increase in
cellular telephone revenues was primarily due to an increase in
air time charges, partially offset by a decrease in monthly
subscription charges and connection fee charges. Air time
charges increased by Rp.2,147.8 billion, or 28.0%, from
Rp.7,677.9 billion in 2003 to Rp.9,825.7 billion in
2004. Monthly subscription charges decreased by
Rp.132.0 billion, or 22.7%, from Rp.580.5 billion in
2003 to Rp.448.5 billion in 2004 due to price competition
among cellular operators and the increase in prepaid subscribers
as discussed below. Connection fee charges decreased by
Rp.138.3 billion, or 71.3%, from Rp.194.1 billion in
2003 to Rp.55.8 billion in 2004 due to price competition
among cellular operators.
The increase in cellular telephone revenues was primarily
attributable to 69.9% growth in Telkomsel's total cellular
subscribers, from 9,588,807 subscribers as of December 31,
2003 to 16,290,508 subscribers as of December 31, 2004.
This increase was caused by a 87.3% growth in net-additional
subscribers from 3,578,035 subscribers as of December 31,
2003 to 6,701,701 subscribers as of December 31, 2004. In
2004, Telkomsel marketed its new Kartu As prepaid cards with
lower denominations than Telkomsel's other prepaid cards at
the time. The Kartu As prepaid cards have a flat rate, which
generally is lower than Telkomsel's other prepaid cards
with rates that vary by time of day. Postpaid subscribers grew
by 31.8% to 1,327,549 subscribers and prepaid subscribers grew
by 74.4% to 14,962,959 subscribers, in each case as of
December 31, 2004.
As a result of the higher rate of growth in the number of
prepaid subscribers, the proportion of prepaid subscribers to
total subscribers increased from 89.5% as of December 31,
2003 to 91.9% as of December 31, 2004. As a result of the
change in the subscriber mix, with the increased number of
prepaid subscribers as a percentage of total subscribers,
blended monthly ARPU decreased from approximately Rp.123,000 in
2003 to approximately Rp.102,000 in 2004. Despite the decrease
in overall ARPU for voice, the SMS/non-voice ARPU for postpaid
increased (approximately 37% growth average per month) due to
the increase in premium SMS, mobile banking transactions, and
average number of SMS per subscribers per month.
Interconnection Revenues.
Net interconnection revenues increased by
Rp.2,025.9 billion, or 48.7%, from Rp.4,162.1 billion
in 2003 to Rp.6,188.0 billion in 2004. Net interconnection
revenues comprise net interconnection revenues from
TELKOM's fixed line network (after eliminating net
interconnection revenues for interconnections with
Telkomsel's mobile cellular network) and net
interconnection revenues from Telkomsel's mobile cellular
network (after eliminating net interconnection expense from
interconnections with TELKOM's fixed line network).
Interconnection revenue included international long-distance
revenue from TELKOM's IDD service
(TIC-007)
since the
launch in June 2004.
Cellular interconnection revenues increased by
Rp.1,443.3 billion, or 36.9%, from Rp.3,908.3 billion
in 2003 to Rp.5,351.6 billion in 2004, primarily due to the
growth of Telkomsel's cellular subscribers. International
interconnection revenues increased by Rp.457.1 billion, or
248.3%, from Rp.184.1 billion in 2003 to
Rp.641.2 billion in 2004, primarily due to an increase in
incoming and outgoing IDD traffic. IDD traffic has increased
significantly primarily due to the launch of TELKOM's IDD
service in June 2004. Other interconnection revenues increased
by Rp.125.5 billion, or 180.1%, from Rp.69.7 billion
in 2003 to Rp.195.2 billion in 2004, primarily due to
interconnection with Indosat's local fixed wireless
services which was launched in 2004.
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TELKOM's interconnection revenues accounted for
approximately 18.2% of TELKOM's consolidated operating
revenues for the year ended December 31, 2004, compared to
15.3% for the year ended December 31, 2003.
KSO Revenues (Joint Operation Scheme Revenues).
KSO revenues decreased by Rp.829.7 billion, or 55.8%, from
Rp.1,486.3 billion in 2003 to Rp.656.6 billion in
2004. The decrease in KSO revenues was primarily due to a
significant decrease in MTR and DTR in 2004. MTR decreased by
Rp.603.9 billion, or 67.1%, from Rp.899.9 billion in
2003 to Rp.296.0 billion in 2004. DTR decreased by
Rp.233.5 billion, or 40.1%, from Rp.583.0 billion in
2003 to Rp.349.5 billion in 2004. Amortization of unearned
initial payments increased slightly by Rp.7.7 billion, or
224.2%, from Rp.3.4 billion in 2003 to Rp.11.1 billion
in 2004, due to the recognition in 2004 of the remaining portion
of unearned initial payments for KSO IV following the
acquisition of KSO IV.
The decrease in KSO revenues was attributable to the acquisition
of KSO IV in 2004 and primarily reflected TELKOM's
share in distributable KSO IV revenues and TELKOM's
right to receive MTR that were no longer received by TELKOM
following the acquisition of KSO IV. All KSO IV
revenues have been consolidated to TELKOM under fixed lines
revenues since February 1, 2004.
As a result of the acquisition of operational control of
KSO IV, fixed lines in service in the KSO regions decreased
34.0% from 1,449,066 lines as of December 31, 2003 to
956,806 lines as of December 31, 2004. Following this
acquisition, KSO VII is the only remaining KSO region under
the joint operation scheme.
Data and Internet Revenues.
Data and Internet revenues increased by Rp.1,700.2 billion,
or 54.7%, from Rp.3,108.6 billion in 2003 to
Rp.4,808.8 billion in 2004. The increase in data and
Internet revenues was primarily due to significant increases in
SMS revenues and Internet revenues and a smaller increase in
data communication revenues, partially offset by a slight
decrease in VoIP revenues. SMS revenues increased by
Rp.1,357.6 billion, or 61.6%, from Rp.2,205.1 billion
in 2003 to Rp.3,562.7 billion in 2004, mainly attributed to
the significant growth in SMS traffic from Telkomsel
subscribers. Internet revenues increased by
Rp.229.0 billion, or 70.3%, from Rp.325.9 billion in
2003 to Rp.554.9 billion in 2004, due to increased usage of
the dial-up Internet in Indonesia. Data communication revenues
increased by Rp.115.1 billion, or 46.8%, from
Rp.245.6 billion in 2003 to Rp.360.7 billion in 2004,
due to the general growth in the data communications market in
Indonesia including use of frame relay and VPN. VoIP revenues
decreased by Rp.9.4 billion, or 2.9%, from
Rp.328.3 billion in 2003 to Rp.318.9 billion in 2004,
due to the decrease in traffic of VoIP.
Network Revenues.
Network revenues increased by Rp.136.4 billion, or 26.3%,
from Rp.517.9 billion in 2003 to Rp.654.3 billion in
2004. A decrease in satellite revenues was offset by an increase
in leased line revenues. Satellite transponder revenues
decreased by Rp.60.0 billion, or 22.1%, from
Rp.270.9 billion in 2003 to Rp.210.9 billion in 2004,
primarily due to a price decrease made in 2004 to reflect market
conditions. Leased lines revenues increased by
Rp.196.4 billion, or 79.5%, from Rp.247.0 billion in
2003 to Rp.443.4 billion in 2004 as a result of an increase
in the number of telecommunications operators, particularly
cellular operators due to significant increases in cellular
subscribers.
Revenues under Revenue-Sharing Arrangements ("PBHs").
Revenues under revenue-sharing arrangements increased by
Rp.22.1 billion, or 8.6%, from Rp.258.5 billion in
2003 to Rp.280.6 billion in 2004. The increase in revenue
under revenue-sharing arrangements was due to an increase in
amortization of unearned income under revenue-sharing
arrangements, partially offset by a slight decrease in net share
in revenue earned under revenue-sharing arrangements.
Amortization of unearned income under revenue-sharing
arrangements in-
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creased by Rp.23.6 billion, or 40.4%, from
Rp.58.4 billion in 2003 to Rp.82.0 billion in 2004,
due to amortization of unearned income from TELKOM's new
revenue-sharing arrangement projects. Net share in revenue
earned under revenue-sharing arrangements decreased by
Rp.1.5 billion, or 0.8%, from Rp.200.1 billion in 2003
to Rp.198.6 billion in 2004, due to the expiration of some
of the revenue-sharing arrangement contracts. Although the total
number of revenue-sharing arrangements increased from
27 contracts as of December 31, 2003 to
79 contracts as of December 31, 2004, many of these
new revenue-sharing arrangements did not generate significant
pulse (and corresponding revenue to TELKOM) in 2004, due to the
respective assets being placed into service during the fourth
quarter of 2004.
Other Telecommunications Services Revenues.
Other telecommunications services revenues increased by
Rp.66.3 billion, or 29.2%, from Rp.226.9 billion in
2003 to Rp.293.2 billion in 2004. The increase in revenue
from other telecommunications services was primarily due to an
increase in revenue from telephone directory services resulting
from an increase in advertising and an increase in revenue from
cable television services resulting from increased marketing.
Operating Expenses.
Total operating expenses increased by Rp.4,219.9 billion,
or 27.9%, from Rp.15,140.0 billion in 2003 to
Rp.19,359.9 billion in 2004. The increase in total
operating expenses was attributable to substantial increases in
depreciation, operations, maintenance and telecommunications
services expenses and smaller increases in personnel expenses,
general and administrative expenses and marketing expenses.
Personnel Expenses.
Personnel expenses increased by Rp.469.9 billion, or 10.6%,
from Rp.4,440.1 billion in 2003 to Rp.4,910.0 billion
in 2004. The main contributor to the increase was KSO IV
personnel cost following Telkom's acquisition of
KSO IV. TELKOM incorporated 2,802 employees from
KSO IV in 2004. The increase in employees from KSO IV
was partially offset by a decrease of 804 employees that
participated in TELKOM's early retirement program in 2004.
In addition, in April 2004, TELKOM increased the basic salary,
basic allowance and position allowance of its employees. These
reasons led to an increase in recurring employee expenses, as
follows:
•
salaries and related benefits increased by
    Rp.222.7 billion, or 14.2%, from Rp.1,574.2 billion in
    2003 to Rp.1,796.9 billion in 2004; and
•
vacation pay, incentives and other benefits increased by
    Rp.340.0 billion, or 41.7%, from Rp.816.1 billion in
    2003 to Rp.1,156.1 billion in 2004.
In addition, net periodic pension cost increased by
Rp.381.4 billion, or 199.7%, from Rp.191.0 in 2003 to
Rp.572.4 billion in 2004, primarily due to recognition of
actuarial gain of Rp.205.1 billion in 2003, compared to no
recognition of actuarial gain in 2004.
These increases offset declines in early retirement costs and
net periodic post-retirement health care benefit cost. Early
retirements costs decreased by Rp.112.2 billion, or 31.5%,
from Rp.355.7 billion in 2003 to Rp.243.5 billion in
2004, due to a decline in the number of employees retiring under
TELKOM's early retirement program. Net periodic
post-retirement
health
care benefit cost declined by Rp.225.1 billion, or 35.1%,
from Rp.641.4 billion in 2003 to Rp.416.3 billion in
2004, primarily due to recognition of actuarial loss and net
transition obligation of Rp.99.3 billion and
Rp.24.3 billion, respectively, in 2003, compared to no
recognition of actuarial loss and net transition obligation in
2004, and a decrease in interest cost by Rp.82.5 billion
resulting from decrease in discount rate used to determine net
periodic post-retirement health care cost from 13% in 2003 to
11% in 2004. Long service awards decreased by
Rp.182.3 billion mostly due to recognition of actuarial
loss of Rp.87.3 billion in 2003, compared to recognition of
actuarial gain of Rp.106.5 billion in 2004.
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Other components of personnel expenses did not contribute
significantly to operating expenses in 2004.
Depreciation Expense.
Depreciation expense increased by Rp.1,659.1 billion, or
34.7%, from Rp.4,779.5 billion in 2003 to
Rp.6,438.6 billion in 2004. The increase in depreciation
expenses was primarily due to significant increases in
depreciation expense for both TELKOM and Telkomsel.
TELKOM's increase in depreciation expenses reflected
continued capital expenditures in TELKOM's transmission
network and backbone, as well as its access network,
particularly for fixed wireless. Telkomsel's increase in
depreciation expense reflected continued capital expenditures
for Telkomsel's network infrastructure.
Operations, Maintenance and Telecommunications Services Expenses.
Operations, maintenance and telecommunications services expenses
increased by Rp.1,190.9 billion, or 35.7%, from
Rp.3,338.7 billion in 2003 to Rp.4,529.6 billion in
2004. The increase in operations, maintenance and
telecommunications services expenses was mainly attributable to:
•
an increase in operations and maintenance expenses by
    Rp.653.4 billion to Rp.2,398.2 billion, an increase of
    37.5%, due to an increase in Telkomsel's operations and
    maintenance expenses arising from the growth in the
    Telkomsel's overall capacity from 10.8 million
    subscribers as of December 31, 2003 to 17.9 million
    subscribers as of December 31, 2004. The number of
    Telkomsel's BTSs grew by 28.7% from 4,820 units in 2003 to
    6,205 units in 2004. Telkomsel also increased the number of
    its transmitting and receiving stations and switching and
    Intelligent Network equipment;
•
cost of phone, SIM and RUIM cards increased by
    Rp.185.4 billion to Rp.366.7 billion in 2004, an
    increase of 102.3%, due to increases in expenses for TELKOM and
    Telkomsel prepaid cards. TELKOM's prepaid card expenses
    included cost of fixed wireless cards (starterpack/
    voucher/replacement) of Rp.32.9 billion that contributed
    Rp.26.5 billion to the increase in cost of phone, SIM and
    RUIM cards after TELKOM began its TELKOMFlexi prepaid program in
    September 2003. Telkomsel's cost of phone and SIM cards of
    Rp.316.5 billion contributed Rp.143.3 billion to the
    increase in cost of phone, SIM and RUIM cards due to a
    substantial increase in subscribers, particularly prepaid
    subscribers;
•
concession fees increased by Rp.196.6 billion to
    Rp.807.3 billion in 2004, an increase of 32.2%, primarily
    due to a 22.0% increase in frequency usage charges by Telkomsel
    of Rp.77.8 billion from Rp.353.6 billion in 2003 to
    Rp.431.4 billion in 2004, in line with the 28.7% increase
    in the number of BTSs from 4,820 in 2003 to 6,205 in 2004, and a
    31.7% increase in concession fees paid to the Government of
    Rp.75.7 billion from Rp.239.0 billion in 2003 to
    Rp.314.7 billion in 2004, in line with the growth in
    operating revenues; and
•
electricity, gas and water charges increased by
    Rp.85.3 billion, or 28.4%, from Rp.300.4 billion in
    2003 to Rp.385.7 billion in 2004, reflecting primarily the
    consolidation of the gas electricity and water charges of
    KSO IV, as well as an increase in electricity and gas rates
    in 2004 compared to 2003.
Other components of operations, maintenance and
telecommunications services expenses did not contribute
significantly to operating expenses in 2004.
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General and Administrative Expenses.
General and administrative expenses increased by
Rp.521.0 billion, or 25.1%, from Rp.2,078.8 billion in
2003 to Rp.2,599.8 billion in 2004. In particular, in 2004:
•
amortization of goodwill and other intangible assets increased
    by Rp.141.6 billion to Rp.872.3 billion, or 19.4%,
    mainly due to amortization of additional intangible assets
    arising from the acquisitions of AriaWest in July 2003,
    KSO IV and the remaining 9.68% interest in Dayamitra;
•
training, education and recruitment expenses increased by
    Rp.101.6 billion to Rp.228.5 billion, or 80.1%,
    following an increase in employees training programs. TELKOM
    increased its employee training programs primarily due to an
    organizational transformation towards more of a customer centric
    approach, additional training to improve internal controls as
    discussed in Item 15. "Controls and Procedures",
    additional training and education expenses resulting from the
    acquisition of KSO IV and the necessary training because of
    new technologies;
•
collection expenses increased by Rp.85.2 billion to
    Rp.359.0 billion, an increase of 31.1%, generally in line
    with the growth in TELKOM's fixed line subscriber base and
    Telkomsel's mobile cellular subscriber base, but also
    reflecting higher fees charged by third party collection agents
    used in some regional divisions;
•
travel expenses increased by Rp.47.9 billion, or 33.1%, to
    Rp.192.6 billion in 2004, primarily due to an increase in
    domestic travel cost by Rp.35.2 billion;
•
security and screening expenses increased by
    Rp.33.6 billion, or 30.5%, to Rp.143.9 billion in
    2004, primarily due to an increase in the salary of security
    guards by Rp.29.3 billion;
•
provision for doubtful accounts and inventory obsolescence
    increased by Rp.31.3 billion, or 9.6%, to
    Rp.357.7 billion in 2004, primarily due to an increase in
    TELKOM and Telkomsel customer defaults as subscriber numbers
    increased; and
•
printing and stationery expenses increased by
    Rp.30.5 billion, or 60.4%, to Rp.81.0 billion in 2004,
    primarily due to an increase in printing and photocopy expenses
    by Rp.20.0 billion, as well as an increase in stationery
    expenses by Rp.10.0 billion.
Other components of general and administrative expenses did not
contribute significantly to operating expenses in 2004.
Marketing Expenses.
Marketing expenses increased by Rp.379.0 billion, or 75.4%,
from Rp.502.9 billion in 2003 to Rp.881.9 billion in
2004. The increase in marketing expenses was primarily due to
TELKOM's marketing campaign for its new services, primarily
for TELKOMFlexi and Telkom's IDD service
(TIC-007)
and an
increase in Telkomsel's marketing expenses
(Rp.174.1 billion or 95.8%), primarily for sales support
and advertising and promotion programs due to significant
competition in the cellular market.
Operating Income and Operating Margin
As a result of the foregoing, operating income increased by
Rp.2,612.0 billion, or 21.8%, from Rp.11,975.9 billion
in 2003 to Rp.14,587.9 billion in 2004. TELKOM's
operating margin decreased from 44.2% in 2003 to 43.0% in 2004
due to the higher growth of operating expenses (27.9%) compared
to the growth of operating revenues (25.2%).
Other Income (Expenses)
Other expenses increased by Rp.1,314.4 billion, or 250.8%,
from Rp.524.1 billion in 2003 to Rp.1,838.5 billion in
2004. The increase in other expenses was primarily due to a
significant loss on
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Table of Contents
foreign exchange of Rp.1,220.8 billion in 2004 compared to
a gain on foreign exchange of Rp.126.1 billion in 2003. In
particular in 2004:
•
Gain (loss) on foreign
exchange-net
decreased
    by Rp.1,346.9 billion from a net gain of
    Rp.126.1 billion in 2003 to a net loss of
    Rp.1,220.8 billion in 2004, primarily due to depreciation
    of the Rupiah from Rp.8,440 to US$1.00 in December 2003 to
    Rp.9,290 to US$1.00 in December 2004, where a loss of
    Rp.342.1 billion resulted from liabilities of business
    acquisition of KSO IV due to the acquisition cost being
    denominated in US dollars;
•
Interest income decreased by Rp.48.1 billion, or 13.1%,
    from Rp.366.0 billion in 2003 to Rp.317.9 billion in
    2004, primarily due to the decrease in floating interest rates
    for both Rupiah and U.S. Dollar-denominated deposits and
    the decrease in average balance of TELKOM's time deposits
    from Rp.5,037.8 billion in 2003 to Rp.4,471.4 billion
    in 2004. See Note 5 to the consolidated financial
    statements; and
•
Others (net) decreased by Rp.33.2 billion, from
    Rp.364.3 billion in 2003 to Rp.331.1 billion in 2004.
    In 2004, the significant other income (net) included income from
    fines from late-paying subscribers of Rp.280.3 billion.
Such increase in Other Expenses was partially offset a decrease
in interest expense by Rp.113.3 billion, or 8.2%, from
Rp.1,383.4 billion in 2003 to Rp.1,270.1 billion in
2004, reflecting primarily the decrease in floating interest
rates for TELKOM's Rupiah and U.S. Dollar-denominated
debt in 2004.
Other components did not contribute significantly to Other
Income (Expenses) in 2004.
Income Before Tax and Pre-Tax Margin
As a result of the foregoing, income before tax increased by
Rp.1,297.6 billion, or 11.3%, from Rp.11,451.8 billion
in 2003 to Rp.12,749.4 billion in 2004.
Pre-tax
margin
decreased from 42.2% in 2003 to 37.6% in 2004.
Income Tax Expense
Income tax expense increased by Rp.317.4 billion, or 8.2%,
from Rp.3,861.1 billion in 2003 to Rp.4,178.5 billion
in 2004. The effective tax rate slightly decreased from 33.7% of
income before tax in 2003 to 32.8% of income before tax in 2004.
Minority Interest in Net Income of Subsidiaries
Minority interest in the net income of subsidiaries increased by
Rp.452.8 billion, or 30.1%, from Rp.1,503.5 billion in
2003 to Rp.1,956.3 billion in 2004. The increase was
primarily due to the significant increase in the net income of
Telkomsel for 2004.
Net Income
As a result of the foregoing, net income increased by
Rp.527.4 billion, or 8.7%, from Rp.6,087.2 billion in
2003 to Rp.6,614.6 billion in 2004. TELKOM's net
income margin decreased from 22.4% in 2003 to 19.5% in 2004. The
higher net income resulted in an increase in basic earnings per
share from Rp.302.0 in 2003 (after restatement to reflect a
two-for-one
stock split
as resolved in the AGMS on July 30, 2004) to Rp.328.1 in
2004.
Equity
Total shareholders' equity increased by
Rp.815.1 billion, or 4.7%, from Rp.17,312.9 billion in
2003 to Rp. 18,128.0 billion in 2004. The increase in total
shareholders' equity was primarily due to the increase in
retained earnings from net income for the year 2004 of
Rp.6,614.6 billion, partially offset by TELKOM's cash
dividends declared of Rp.3,187.0 billion (comprising cash
dividends for 2003 of
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Table of Contents
Rp.3,043.6 billion approved at the 2004 AGMS and interim
cash dividends declared in December 2004 of
Rp.143.4 billion) and cumulative effect due to the change
in method of accounting for employee benefits as of
January 1, 2004 of Rp.2,618.7 billion (net of tax
effect of Rp.600.1 billion). For the change in method of
accounting for employee benefits, see Item 5. "Operating
and Financial Review and Prospects — A. Operating
Results — Changes in Methods of Accounting under
Indonesian GAAP" and Note 4a to TELKOM's
consolidated financial statements.
Retained Earnings.
Appropriated and unappropriated retained earnings increased by
Rp.808.9 billion, or 4.5%, from Rp.17,878.0 billion in
2003 to Rp.18,686.9 billion in 2004.
TELKOM's Results of Operations by Segment
TELKOM has three main business segments: fixed wireline, fixed
wireless and cellular. Operating segments that do not
individually represent more than 10% of TELKOM's revenues
are presented as "Other" and comprise the telephone
directories and building management business. In 2005, a
re-alignment of management responsibilities caused a change in
segment reporting. The fixed wireless telecommunications
services business segment is now presented as a separate
segment. This change in segment has been reflected for all
periods presented below. See Note 46 to TELKOM's
consolidated financial statements.
Year Ended December 31,
2004
2003
(As restated*)
2005
2005
Rp.(billion)
Rp.(billion)
Rp.(billion)
US$(million)
Fixed Wireline
Segment results
External operating revenues
15,905.1
18,860.8
19,637.4
1,997.7
Inter-segment operating revenues
71.9
4.3
305.4
31.1
Total revenues
15,977.0
18,865.1
19,942.8
2,028.8
Segment expense
(10,350.7
)
(12,207.7
)
(14,378.8
)
(1,462.7
)
Segment result
5,626.3
6,657.4
5,564.0
566.1
Depreciation and amortization
(3,090.4
)
(3,568.2
)
(4,006.2
)
(407.6
)
Amortization of goodwill and other intangible assets
(709.4
)
(851.1
)
(896.9
)
(91.2
)
Other non-cash expenses
(210.6
)
(244.4
)
(292.4
)
(29.7
)
*
The 2004 figures have been restated due to the adoption of
    PSAK 24R. See — "Changes in Methods of
    Accounting under Indonesian GAAP" and Note 4a to
    TELKOM's consolidated financial statements.
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Table of Contents
Year Ended December 31,
2004
2003
(As restated*)
2005
2005
Rp.(billion)
Rp.(billion)
Rp.(billion)
US$(million)
Fixed Wireless
Segment results
External operating revenues
163.4
575.4
1,449.7
147.5
Inter-segment operating revenues
50.7
(51.1
)
(167.9
)
(17.1
)
Total revenues
214.1
524.3
1,281.8
130.4
Segment expense
(246.2
)
(789.6
)
(2,174.7
)
(221.2
)
Segment result
(32,.1
)
(265.3
)
(892.9
)
(90.8
)
Depreciation and amortization
(35.8
)
(230.0
)
(537.3
)
(54.7
)
Write-down of assets and loss on procurement commitments
—
—
(696.1
)
(70.8
)
Other non-cash expenses
—
—
(21.6
)
(2.2
)
Cellular
Segment results
External operating revenues
10,797.6
14,201.8
20,384.9
2,073.7
Inter-segment operating revenues
337.1
534.8
691.2
70.3
Total revenues
11,134.7
14,736.6
21,076.1
2,144.0
Segment expense
(4,802.3
)
(6,757.2
)
(8,775.0
)
(892.7
)
Segment result
6,332.4
7,979.4
12,301.1
1,251.3
Depreciation and amortization
(1,680.6
)
(2,651.0
)
(3,046.6
)
(309.9
)
Other non-cash expenses
(113.9
)
(100.7
)
(171.2
)
(17.4
)
Other
Segment results
External operating revenues
249.9
309.7
335.2
34.1
Inter-segment operating revenues
30.8
51.1
70.5
7.2
Total revenues
280.7
360.8
405.7
41.3
Segment expense
(275.5
)
(320.7
)
(328.2
)
(33.4
)
Segment result
5.2
40.1
77.5
7.9
Depreciation and amortization
(9.8
)
(18.7
)
(23.3
)
(2.4
)
Amortization of goodwill and other intangible assets
(21.3
)
(21.3
)
(21.3
)
(2.2
)
Other non-cash expenses
(4.3
)
(5.3
)
(4.8
)
(0.5
)
*
The 2004 figures have been restated due to the adoption of
    PSAK 24R. See — "Changes in Methods of
    Accounting under Indonesian GAAP" and Note 4a to
    TELKOM's consolidated financial statements.
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Table of Contents
Results of Segments
Year ended December 31,
2005 compared to year ended December 31, 2004
Fixed Wireline
Segment
Fixed wireline segment revenues increased by
Rp.1,077.7 billion, or 5.7%, from Rp.18,865.1 billion
in 2004 to Rp.19,942.8 billion in 2005. The increase in
fixed wireline segment revenues was primarily due to an increase
in fixed wireline's interconnection revenues by
Rp.1,377.0 billion, primarily due to increases in
international call volumes and outgoing calls to cellular users,
and data and internet revenues by Rp.329.3 billion, primarily
due to an increase in Internet connection revenues from
Telkomnet Instant and the broadband access services, partially
offset by a decrease in fixed wireline's voice revenues by
Rp.862.5 billion, primarily due to a decrease in the call
volumes.
Fixed wireline segment expense increased by
Rp.2,171.1 billion, or 17.8% from Rp.12,207.7 billion
in 2004 to Rp.14,378.8 billion in 2005. The increase in
fixed wireline segment expense was primarily due to an increase
in personnel expenses by Rp.1,436.5 billion, or 34.1%, from
Rp.4,212.1 billion in 2004 to Rp.5,648.6 billion in
2005. The increase in personnel expenses was caused by the
increase in salaries and related benefits, vacation pay,
incentives and other benefits primarily due to the
implementation of a performance based remuneration system in
July 2004 which resulted in increased base salary, allowances,
incentives and bonuses. The increase in fixed wireline segment
expense was also contributed by an increase of
Rp.425.4 billion in depreciation expense, due primarily to
a change in estimate of the remaining useful lives for WLL and
approach link equipment. See Item 5. "Operating and
Financial Review and Prospects — A. Operating
Results — Overview — Write-down of Assets,
Depreciation Expense, Loss on Procurement Commitments, and
Operations, Maintenance and Telecommunication Services
Expenses."
Fixed Wireless
Segment
Fixed wireless segment revenues increased by
Rp.757.5 billion, or 144.5%, from Rp.524.3 billion in
2004 to Rp.1,281.8 billion in 2005. The increase in fixed
wireless segment revenues was due to the increase in fixed
wireless's voice revenues by Rp.975.5 billion in line
with a 184.2% growth in the number of subscribers for fixed
wireless, from 1,429,368 lines in service as of
December 31, 2004 to 4,061,867 lines in service as of
December 31, 2005. This increase was partially offset by
the decrease in fixed wireless interconnection revenues,
resulting from a decrease in incoming and outgoing calls to and
from cellular users.
Fixed wireless segment expense increased by
Rp.1,385.1 billion, or 175.4%, from Rp.789.6 billion
in 2004 to Rp.2,174.7 billion in 2005. The increase in
fixed wireless segment expense was primarily due to a write-down
of assets of Rp.616.8 billion, loss on procurement
commitments of Rp.79.4 billion and an increase in
depreciation expense by Rp.307.3 billion, due primarily to
an increase in TELKOM's fixed wireless assets and a change
in estimate of the remaining useful lives for the Jakarta and
West Java BSS equipment. See Item 5. "Operating and
Financial Review and Prospects — A. Operating
Results — Overview — Write-down of Assets,
Depreciation Expense, Loss on Procurement Commitments, and
Operations, Maintenance and Telecommunication Services
Expenses."
Cellular Segment
Cellular segment revenues increased by Rp.6,339.5 billion,
or 43.0%, from Rp.14,736.6 billion in 2004 to
Rp.21,076.1 billion in 2005. The increase in cellular
revenues was primarily due to the increase in cellular telephone
revenues by Rp.4,149.6 billion as well as in cellular SMS
revenues by Rp.1,656.8 billion in line with 49% growth in
Telkomsel's total cellular subscribers from 16,290,508
subscribers as of December 31, 2004 to 24,269,353
subscribers as of December 31, 2005.
Cellular segment expense increased by Rp.2,017.8 billion,
or 29.9%, from Rp.6,757.2 billion in 2004 to
Rp.8,775.0 billion in 2005. The increase in cellular
segment expense was primarily due to increases in
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Table of Contents
operations, maintenance and telecommunications services expenses
and depreciation expense by Rp.1,116.5 billion and
Rp.395.6 billion, respectively, in line with the growth in
Telkomsel's overall capacity from 17.9 million
subscribers as of December 31, 2004 to 26.2 million
subscribers as of December 31, 2005 as well as the number
of Telkomsel's BTSs from 6,205 units as of
December 31, 2004 to 9,895 units as of
December 31, 2005.
Other Segment
Other segment revenues increased by Rp.44.9 billion, or
12,4%, from Rp.360.8 billion in 2004 to
Rp.405.7 billion in 2005, due to the increase in
Infomedia's call center service revenue by
Rp.43.1 billion.
Other segment expense increased by Rp.7.5 billion, or 2.3%,
from Rp.320.7 billion in 2004 to Rp.328.2 billion in
2005, primarily due to an increase in the printing costs of
Infomedia.
Year ended December 31,
2004 compared to year ended December 31, 2003
Fixed Wireline
Segment
Fixed wireline segment revenues increased by
Rp.2,888.1 billion, or 18.1%, from Rp,
15,977.0 billion in 2003 to Rp18,865.1 billion in
2004. The increase in fixed wireline segment revenues was
primarily due to increases in fixed wireline's voice,
interconnection, and data and Internet revenues by Rp.1,234.2
billion, Rp.1,788.0 billion and Rp.355.4 billion, respectively,
primarily due to the consolidation of KSO IV revenues
following the acquisition of KSO IV in January 2004,
an increase in fixed wireline tariffs in 2004 by a weighted
average increase of 9% as well as the launch of TELKOM's
IDD service (TIC 007) in June 2004 and the increased usage
volume of dial-up Internet, frame relay and VPN in Indonesia.
The increase was partially offset by a decrease in KSO revenues
by Rp.840.3 billion, primarily reflecting TELKOM's
share in distributable KSO IV revenues and TELKOM's
right to receive MTR that were no longer received by TELKOM
following the acquisition of KSO IV.
Fixed wireline segment expense increased by
Rp.1,857.0 billion, or 17.9% from Rp.10,350.7 billion
in 2003 to Rp.12,207.7 billion in 2004. The increase in
fixed wireline segment expense was primarily due to an increase
in personnel expenses, depreciation expense, operations,
maintenance and telecommunications services expenses, and
general and administration expenses by Rp.316.2 billion,
Rp.487.8 billion, Rp.495.7 billion and Rp.406.5 billion,
respectively, primarily due to the consolidation of KSO IV
expenses in the consolidated financial statements following the
acquisition of KSO IV in January 2004.
Fixed Wireless
Segment
Fixed wireless segment revenues increased by
Rp.310.2 billion, or 144.9%, from Rp.214.1 billion in
2003 to Rp.524.3 billion in 2004. The increase in fixed
wireless segment revenues was primarily due to the increase in
fixed wireless's voice revenues by Rp.500.2 billion in line
with a 439.8% growth in the number of subscribers and lines in
service for fixed wireless, from 264,787 lines in service as of
December 31, 2003 to 1,429,368 lines in service as of
December 31, 2004. This increase was partially offset by
the decrease in interconnection revenues by Rp.189.9 billion.
Fixed wireless segment expense increased by
Rp.543.4 billion, or 220.8%, from Rp.246.2 billion in
2003 to Rp.789.6 billion in 2004. The increase in fixed
wireless segment expense was primarily due to increases in
depreciation expense by Rp.194.2 billion and operations,
maintenance and telecommunications services expenses by
Rp.233.3 billion, in line with the increase in
TELKOM's fixed wireless assets due to TELKOM's
aggressive deployment of fixed wireless.
Cellular Segment
Cellular segment revenues increased by Rp.3,601.9 billion,
or 32.3%, from Rp.11,134.7 billion in 2003 to
Rp.14,736.6 billion in 2004. The increase in cellular
revenues was primarily due to the increase in cellular telephone
revenues by Rp.1,962.5 billion as well as cellular SMS
revenues by
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Rp.1,295.7 billion in line with a 70% growth in
Telkomsel's total cellular subscribers from 9,588,807
subscribers as of December 31, 2003 to 16,290,508
subscribers as of December 31, 2004.
Cellular segment expense increased by Rp.1,954.9 billion,
or 40.7% from Rp.4,802.3 billion in 2003 to
Rp.6,757.2 billion in 2004. The increase in cellular
segment expense was primarily due to the increase in
depreciation expense by Rp.970.4 billion and in operations,
maintenance and telecommunications services expenses by
Rp.629.4 billion, in line with the growth of
Telkomsel's overall capacity from 10.8 million
subscribers as of December 31, 2003 to 17.9 million
subscribers as of December 31, 2004 as well as the number
of Telkomsel's BTSs from 4,820 units as of
December 31, 2003 to 6,205 units as of
December 31, 2004.
Other Segment
Other Segment revenues increased by Rp.80.1 billion, or
28.5%, from Rp.280.7 billion in 2003 to
Rp.360.8 billion in 2004. The increase in other segment
revenues was primarily due to the increase in Informedia's
directory assistance service revenues by Rp.64.5 billion.
Other segment expense increased by Rp.45.2 billion, or
16.4%, from Rp.275.5 billion in 2003 to
Rp.320.7 billion in 2004. The increase in other segment
expense was primarily due to the increase in Infomedia's
personnel expenses, marketing expenses and general and
administration expenses by Rp.16.0 billion, Rp.11.2 billion and
Rp.7.6 billion, respectively.
Reconciliation to U.S. GAAP
TELKOM prepares its consolidated financial statements in
accordance with Indonesian GAAP and prepares a reconciliation of
consolidated net income and stockholders' equity in
accordance with U.S. GAAP pursuant to the requirements of
the U.S. Securities and Exchange Commission. The following
table sets out consolidated net income for the years ended and
consolidated stockholders' equity as of December 31,
2003, 2004 and 2005 in accordance with Indonesian GAAP and
U.S. GAAP:
Year Ended December 31,
2004
2003
(As restated)
(1)
2005
2005
Rp. (billion)
Rp. (billion)
Rp. (billion)
US$ (million)
Net income in accordance with
Indonesian GAAP
6,087.2
6,614.6
7,993.6
813.2
U.S. GAAP
5,790.6
6,468.6
7,840.1
797.6
Year Ended December 31,
2004
2003
(As restated)
(2)
2005
2005
Rp. (billion)
Rp. (billion)
Rp. (billion)
US$ (million)
Stockholders' equity in accordance with
Indonesian GAAP
17,312.9
18,128.0
23,292.4
2,369.5
U.S. GAAP
16,284.7
19,570.9
24,568.5
2,499.3
(1)
Net income for the year ended December 31, 2004 under
    Indonesian GAAP has been restated due to the adoption of
    PSAK 24R (see Item 5. "Operating and Financial
    Review and Prospects — A. Operating
    Results — Changes in Methods of Accounting under
    Indonesian GAAP" and Note 4a to the Company's
    consolidated financial statements).
(2)
Equity as of December 31, 2004 under Indonesian GAAP has
    been restated due to the adoption of PSAK 24R (see Item 5.
    "Operating and Financial Review and Prospects —
    A. Operating Results — Changes in Methods of
    Accounting under Indonesian GAAP" and Note 4a to the
    Company's consolidated financial statements).
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Summary of Significant Differences Between Indonesian GAAP
and U.S. GAAP
The Company's consolidated financial statements have been
prepared in accordance with Indonesian GAAP, which differs in
certain significant respects from U.S. GAAP. The
significant differences are summarized below and are described
in Note 54 to the Company's consolidated financial
statements.
The Company's consolidated financial statements prepared in
accordance with Indonesian GAAP as of and for the year ended
December 31, 2004 and the related selected financial data
for 2004 in its 2005 Annual Report on
Form
20-F
have
been restated in connection with the adoption of PSAK 24R.
See Item 5. "Operating and Financial Review and
Prospects — A. Operating Results — Changes
in Methods of Accounting under Indonesian GAAP" and
Note 4a to the Company's consolidated financial
statements. While the restatement affected previously reported
consolidated net income and stockholders' equity under
Indonesian GAAP, there was no net effect on consolidated
net income and stockholders' equity under U.S. GAAP as
previously reported. However, certain reconciling line items in
arriving at net income and stockholders' equity under
U.S. GAAP have been revised.
Termination Benefits
Under Indonesian GAAP, termination benefits are recognized as
liabilities when certain criteria are met (e.g. the enterprise
is demonstratively committed to provide termination benefits as
a result of an offer made in order to encourage early
retirement).
Under U.S. GAAP, termination benefits are recognized as
liabilities when the employees accept the offer and the amount
can be reasonably estimated.
As a result, on a U.S. GAAP basis, the Company's
consolidated income before tax due to termination benefits would
have been Rp.671.0 billion lower in 2003 and no change in
2004 and 2005.
Foreign Exchange Differences Capitalized to Property under
Construction
Under Indonesian GAAP, the foreign exchange gains and losses
resulting from borrowings used to finance property under
construction are capitalized. Capitalization of foreign exchange
gains and losses ceases when the construction of the qualifying
asset is substantially completed and the constructed property is
ready for its intended use.
Under U.S. GAAP, foreign exchange gains and losses are
charged to current operations. Consequently, on a U.S. GAAP
basis, the Company's consolidated income before tax would
have been Rp.76.8 billion higher in 2003,
Rp.1.6 billion higher in 2004 and Rp.77.0 billion
higher in 2005.
Interest Capitalized on Property under Construction
Under Indonesian GAAP, qualifying assets, to which interest cost
can be capitalized, should be those that take a substantial
period of time to get ready for its intended use or
sale, i.e., minimum 12 months. To the extent that
funds are borrowed specifically for the purpose of obtaining a
qualifying asset, the amount of interest cost eligible for
capitalization on that asset should be determined based on the
actual interest cost incurred on that borrowing during the
period of construction less any investment income on the
temporary investment of those borrowings.
Under U.S. GAAP, there is no minimum limit (i.e.
12-month
requirement)
on the length of the construction period in which the interest
cost could be capitalized. Interest income arising from any
unused borrowings is recognized directly to current operations.
As a result, on a U.S. GAAP basis, the Company's
consolidated income before tax would have been
Rp.39.1 billion higher in 2003, Rp.26.8 billion higher
in 2004 and Rp.23.8 billion higher in 2005.
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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 arrangements
in the accounting records of the party to whom ownership in such
properties will 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 net of
amounts due to the investors.
Under U.S. GAAP, the revenue-sharing arrangements are
recorded in a manner similar to capital leases where the fixed
assets and obligation under revenue-sharing arrangements are
reflected on the balance sheet. All the revenues generated from
the revenue-sharing arrangements are recorded as a component of
operating revenues, while a portion of the investors' share
of revenue from the revenue-sharing arrangements is recorded as
interest expense and the balance is treated as a reduction of
the obligation under revenue-sharing arrangements.
In connection with the different treatment of revenue-sharing
arrangements under U.S. GAAP and Indonesian GAAP, the
Company's consolidated income before tax under
U.S. GAAP would have been Rp.23.2 billion higher in
2003, Rp.155.4 billion higher in 2004 and
Rp.69.2 billion higher in 2005.
Employee Benefit Plans
As of January 1, 2005, the Company adopted PSAK 24R in
accounting for pension benefit cost,
post-retirement
health
care benefit cost and long service award benefit cost for
Indonesian GAAP purposes. PSAK 24R requires the adoption of
its provisions retrospectively as of January 1, 2004. Prior
to 2004, there were no differences between Indonesian GAAP and
U.S. GAAP with respect to the accounting for
post-retirement
health
care benefit cost and long service award benefit cost. However,
the differences with respect to pension benefit cost were as
follows:
i.
Under Indonesian GAAP, the prior service cost attributable to
    the increases in pension benefits for pensioners were directly
    charged to expense in those years. Under U.S. GAAP, because the
    majority of plan participants are still active, such prior
    service cost is deferred and amortized systematically over the
    estimated remaining service period for active employees.
ii.
Under Indonesian GAAP, the Company amortized the cumulative
    unrecognized actuarial gain or loss over four years. Under
    U.S. GAAP, any cumulative unrecognized actuarial gain or loss
    exceeding 10 percent of the greater of projected benefit
    obligation or fair value of plan assets is recognized in the
    statement of income on a straight-line basis over the expected
    average remaining service period.
iii.
Under Indonesian GAAP, recognition of a minimum liability is not
    required. Under U.S. GAAP, the Company would be required to
    recognize an additional minimum liability when the accumulated
    benefit obligation exceeds the fair value of the plan assets,
    and an equal amount would be recognized as an intangible asset,
    provided that the asset recognized does not exceed the amount of
    unrecognized prior service cost.
Starting in 2004, the differences between the Company's
accounting for pension benefit cost, post-retirement health care
benefit cost and long service award benefit cost under
Indonesian GAAP and U.S. GAAP are as follows:
i.
Under Indonesian GAAP, the prior service cost is recognized
    immediately if vested or amortized over the vesting period.
    Under U.S. GAAP, prior service cost (vested and
non-vested
benefits) is
    generally deferred and amortized systematically over the
    estimated remaining service period for active employees.
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ii.
Different dates of implementation caused significant differences
    in cumulative unrecognized actuarial gains and losses. However,
    the cumulative unrecognized actuarial gains and losses under
    Indonesian GAAP is now recognized in a manner similar to U.S.
    GAAP.
iii.
Under Indonesian GAAP, the transition obligation was recognized
    on January 1, 2004, the date PSAK 24R was adopted.
    Under U.S. GAAP, the transition obligation is deferred and
    amortized systematically over the estimated remaining service
    period for active employees.
iv.
The difference between Indonesian GAAP and U.S. GAAP in
    connection with the recognition of minimum liability remains
    unchanged.
As a result, the Company's consolidated income before tax
under U.S. GAAP would have been Rp.109.3 billion lower
in 2003, Rp.346.9 billion lower in 2004 and
Rp.300.3 billion lower in 2005. See Note 54 to
TELKOM's consolidated financial statements.
Equity in Net Income or Loss of Associated
Companies
The Company records its equity in net income or loss of
associated companies based on the associates' financial
statements that have been prepared under Indonesian GAAP.
For U.S. GAAP reporting purposes, the Company recognizes
the effect of the differences between U.S. GAAP and
Indonesian GAAP at the investee level in the investment accounts
and its share of the net income or loss and other comprehensive
income or loss of those associates.
As a result, on a U.S. GAAP basis, the Company's
consolidated income before tax would have been
Rp.0.2 billion lower in 2003, Rp.0.2 billion lower in
2004 and Rp.0.2 billion lower in 2005.
Land Rights
In Indonesia, the title of land rests with the State under the
Basic Agrarian Law No. 5 of 1960. Land use is accomplished
through land rights whereby the holder of the right enjoys the
full use of the land for a stated period of time, subject to
extensions. The land rights generally are freely tradeable and
may be pledged as security under borrowing agreements. Under
Indonesian GAAP, land ownership is not depreciated unless it can
be foreseen that the possibility for the holder to obtain an
extension or renewal of the rights is remote.
Under U.S. GAAP, the cost of land rights is amortized over
the economic useful life which represents the contractual period
of the land rights.
As a result, the Company's consolidated income before tax
would have been Rp.10.2 billion lower in 2003,
Rp.13.9 billion lower in 2004 and Rp.4.9 billion lower
in 2005 under U.S. GAAP reporting.
Revenue Recognition
Under Indonesian GAAP, revenue from cellular and fixed wireless
services connection fees are recognized as income when the
connection takes place (for postpaid service) or at the time of
delivery of starter packs to distributors, dealers or customers
(for prepaid service). Installation fees for wireline services
are recognized at the time of installation. The revenue from
calling cards ("Kartu Telepon") is recognized when the
Company sells the card.
Under U.S. GAAP, revenue from
front-end
fees and
incremental costs up to, but not exceeding such fees, are
deferred and recognized over the expected term of the customer
relationship. Revenues from calling cards are recognized upon
usage or expiration.
Consequently, the Company's consolidated income before tax
under U.S. GAAP would have been Rp.53.2 billion lower
in 2003, Rp.54.2 billion higher in 2004 and
Rp.5.0 billion higher in 2005.
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Goodwill
Under Indonesian GAAP, goodwill is amortized over a period, not
exceeding 20 years, that it is expected to benefit the
Company.
Under U.S. GAAP, goodwill is not amortized but rather
subjected to an annual test for impairment.
Consequently, the Company's consolidated income before tax
under U.S. GAAP would have been Rp.21.3 billion higher
in 2003, Rp.21.3 billion higher in 2004 and
Rp.21.3 billion higher in 2005.
Capital Leases
Under Indonesian GAAP, a leased asset is capitalized only if all
of the following criteria are met: (a) the lessee has an
option to purchase the leased asset at the end of the lease
period at a price agreed upon at the inception of the lease
agreement, and (b) the sum of periodic lease payments, plus
the residual value, will cover the acquisition price of the
leased asset and related interest, and (c) there is a
minimum lease period of 2 years.
Under U.S. GAAP, a leased asset is capitalized if one of
the following criteria is met: (a) there is an automatic
transfer of ownership at the end of the lease term; or
(b) the lease contains a bargain purchase option; or
(c) the lease term is for 75% or more of the economic life
of the asset; or (d) the net present value of minimum lease
payments are at least 90% of the fair value of the asset.
Consequently, the Company's consolidated income before tax
under U.S. GAAP would have been Rp.6.9 billion higher
in 2003, Rp.3.4 billion lower in 2004 and
Rp.47.5 billion lower in 2005.
Acquisition of Dayamitra
On May 17, 2001, the Company acquired a 90.32% interest in
Dayamitra and contemporaneously acquired a call option to buy
the other 9.68% interest at a fixed price at a stated future
date, and provided to the minority interest holder a put option
to sell the other 9.68% to the Company under those same terms;
meaning the fixed price of the call is equal to the fixed price
of the put option. Under U.S. GAAP, the Company should
account for the option contracts on a combined basis with the
minority interest and account for it as a financing of the
purchase of the remaining 9.68% minority interest. As such,
under U.S. GAAP, the Company has consolidated 100% of
Dayamitra and attributed the stated yield earned under the
combined derivative and minority interest position to interest
expense since May 17, 2001.
On December 14, 2004, the Company exercised the call option
to acquire the remaining 9.68% interest in Dayamitra.
Under Indonesian GAAP, prior to December 14, 2004, the
Company accounted for the remaining 9.68% of Dayamitra as
minority interest. In addition, the option price that had been
paid by the Company was presented as "Advance payments for
investments in shares of stock." The Company started
consolidating the remaining 9.68% of Dayamitra on
December 14, 2004 following the exercise of the option.
The differences in the timing of the 9.68% ownership interest
recognition gives rise to differences in the timing and amounts
of purchase consideration and liability recognized under
Indonesian GAAP and U.S. GAAP.
Consequently, the Company's consolidated income before tax
under U.S. GAAP would have been Rp.24.5 billion lower
in 2003, Rp.72.4 billion lower in 2004 and
Rp.5.1 billion higher in 2005.
Reversal of Difference Due to Change of Equity in
Associated Companies
Under Indonesian GAAP, differences previously credited directly
to equity as a result of equity transactions in associated
companies are released to the statement of income upon the sale
of an interest in the associate in proportion with the
percentage of the interest sold.
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Under U.S. GAAP, it is the Company's policy to include
differences resulting from equity transactions in associated
companies in equity. Such amounts cannot be released to the
statement of income and consequently remain in equity
indefinitely.
Consequently, the Company's consolidated income before tax
under U.S. GAAP would have been Rp.38.4 billion lower
in 2003, and no change in 2004 and 2005.
Asset Retirement Obligations
Under Indonesian GAAP, legal obligations associated with the
retirement of
long-lived
assets that
result from the acquisition, construction, development and/or
the normal operation of
long-lived
assets are
charged to current operations as incurred.
Under U.S. GAAP, the estimated fair value of such
obligations is accrued at the time of acquisition with an equal
amount capitalized to the related long-lived assets and
depreciated over the useful life of the assets. The Company and
its subsidiaries identified their asset retirement obligations
by reviewing contractual agreements to identify whether the
Company and its subsidiaries are required to settle any
obligations as a result of the prevailing laws, statute,
ordinance, written or by legal construction of a contract under
the doctrine of promissory estoppel.
Consequently, the Company's consolidated income before tax
under U.S. GAAP would have been Rp.0.8 billion lower in
2003, Rp.0.8 billion lower in 2004 and Rp.0.8 billion
lower in 2005.
Deferred Income Taxes
Under Indonesian GAAP, the Company does not recognize deferred
taxes on temporary differences between the financial statement
carrying amounts and tax bases of equity method investments when
it is not probable that these differences will reverse in the
foreseeable future.
Under U.S. GAAP, deferred taxes are recognized in full on
temporary differences between the financial statement carrying
amounts and tax bases of equity method investments.
Consequently, the Company's consolidated net income under
U.S. GAAP would have been Rp.119.5 billion higher in 2003,
Rp.11.2 billion lower in 2004 and Rp.3.2 billion lower
in 2005.
Impairment of Assets
Under Indonesian GAAP, an impairment loss is recognized whenever
the carrying amount of an asset or its
cash-generating
unit
exceeds its recoverable amount. The recoverable amount of a
fixed asset is the greater of its net selling price or value in
use. In assessing value in use, the estimated future cash flows
are discounted to their present value using a
pre-tax
discount rate
that reflects current market assessments of the time value of
money and the risks specific to the asset. An impairment loss
can be reversed if there has been a change in the estimates used
to determine the recoverable amount. An impairment loss is only
reversed to the extent that the asset's carrying amount
does not exceed the carrying amount that would have been
determined, net of depreciation, if no impairment loss had been
recognized.
Under U.S. GAAP, an impairment loss is recognized whenever
the sum of the expected future cash flows (undiscounted and
without interest charges) is less than the carrying amount of
the asset. An impaired asset is written down to its estimated
fair value based on quoted market prices in active markets or
discounting estimated future cash flows. When an impairment loss
is recognized, the adjusted carrying amount of fixed asset
becomes its new cost basis and reversals of previously
recognized impairment losses are prohibited.
Through the year ended December 31, 2004, there were no
impairment charges recognized by the Company. In 2005, the
Company recognized impairment charges on BSS equipment which are
part of transmission installation and equipment of fixed
wireless assets. The sum of the expected future cash flows
(undiscounted and without interest charges) relating to these
impaired assets is less than the
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carrying amount of the assets and therefore, for U.S. GAAP
reporting purposes, these assets have been written down to their
estimated fair values based on discounted estimated future cash
flows. The estimated fair values of the impaired assets
determined under U.S. GAAP are the same as those determined
under Indonesian GAAP; accordingly, there were no differences
between Indonesian GAAP and U.S. GAAP.
Gain (loss) on Disposal of Property, Plant and
    Equipment
Under Indonesian GAAP, the Company classifies gain (loss) on
disposal of property, plant and equipment as a component of
other income (expenses) which is excluded from determination of
operating income.
Under U.S. GAAP, gain (loss) on disposal of property, plant
and equipment is classified as a component of operating expenses
and hence included in the determination of operating income.
Consequently, the Company's operating income under
U.S. GAAP would have been Rp.182.9 billion higher in
2003, Rp.26.1 billion lower in 2004 and
Rp.46.2 billion higher in 2005, and other income (expenses)
would have been lower (higher) by the same amounts in each of
2003, 2004 and 2005, respectively, due to the inclusion of the
gain (loss) on disposal of property, plant and equipment in the
determination of operating income.
Reversal of Difference in Value of Restructuring
    Transactions Between Entities Under Common Control
Under Indonesian GAAP, the Company is required to reclassify the
difference in value of restructuring transactions between
entities under common control as of January 1, 2005 as a
direct adjustment to retained earnings when the common control
relationship between the transacting parties no longer exists as
of January 1, 2005.
Under U.S. GAAP, difference in value of restructuring
transactions between entities under common control remains in
equity indefinitely as part of the additional paid-in capital.
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The amounts included in the reconciliation below show the income
tax effects of the differences between Indonesian GAAP and
U.S. GAAP as described above.
A summary of the significant adjustments to consolidated net
income for the years ended December 31, 2003, 2004 and 2005
and to consolidated stockholders' equity as of
December 31, 2004 and 2005 which would be required if
U.S. GAAP had been applied, instead of Indonesian GAAP, in
the consolidated financial statements are set forth below:
2004
2003
(As restated)
2005
Rp. million
Rp. million
Rp. million
Net income according to the consolidated statements of income
    prepared under Indonesian
    GAAP
(1)
6,087,227
6,614,568
7,993,566
U.S. GAAP adjustments — increase (decrease) due
    to:
Termination benefits
(670,981
)
—
—
Capitalization of foreign exchange gains and losses, net of
    related depreciation of (Rp.76,756) million, (Rp.75,870) million
    and (Rp.77,010) million, respectively
76,756
1,587
77,010
Interest capitalized on property under construction, net of
    related depreciation of (Rp.8,787) million,
    (Rp.13,392) million and (Rp.17,275) million, respectively
39,077
26,802
23,825
Revenue-sharing arrangements
23,159
155,369
69,173
Pension
(109,334
)
(148,517
)
(104,877
)
Post-retirement health care
—
(75,964
)
(104,466
)
Long service awards
—
(122,462
)
(90,933
)
Equity in net income (loss) of associated companies
(170
)
(177
)
(192
)
Amortization of land rights
(10,212
)
(13,907
)
(4,881
)
Revenue recognition
(53,226
)
54,159
5,046
Goodwill
21,270
21,270
21,270
Capital leases
6,882
(3,435
)
(47,524
)
Adjustment for consolidation of Dayamitra
(24,476
)
(72,361
)
5,084
Reversal of difference due to change of equity in associated
    companies
(38,425
)
—
—
Asset retirement obligations
(848
)
(848
)
(848
)
Deferred income tax:
Deferred income tax on equity method investments
119,456
(11,234
)
(3,206
)
Deferred income tax effect on U.S. GAAP adjustments
323,089
61,742
18,288
(297,983
)
(127,976
)
(137,231
)
Minority interest
1,396
(18,019
)
(16,244
)
Net adjustments
(296,587
)
(145,995
)
(153,475
)
Net income in accordance with U.S. GAAP
5,790,640
6,468,573
7,840,091
Net income per share — in full Rupiah amount
287.23
320.86
388.89
Net income per ADS — in full Rupiah amount (40
    Series B shares per ADS)
11,489.40
12,834.47
15,555.74
(1)
Net income for the year ended December 31, 2004 under
    Indonesian GAAP has been restated due to the adoption of
    PSAK 24R (see Note 4a to the consolidated financial
    statements).
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2004
(As restated)
2005
Rp. million
Rp. million
Stockholders' equity according to the consolidated balance
    sheets prepared under Indonesian
    GAAP
(2)
18,128,036
23,292,401
U.S. GAAP adjustments — increase (decrease) due
    to:
Capitalization of foreign exchange differences — net
    of related depreciation
(548,886
)
(471,876
)
Interest capitalized on property under construction —
    net of related depreciation
128,614
152,439
Revenue-sharing arrangements
(292,327
)
(223,154
)
Pension
1,973,837
1,851,509
Post-retirement health care
1,142,561
1,038,095
Long service awards
(122,462
)
(213,395
)
Equity in net income (loss) of associated companies
(18,429
)
(18,621
)
Amortization of land rights
(79,118
)
(83,999
)
Revenue recognition
(714,389
)
(709,343
)
Goodwill
63,809
85,079
Capital leases
17,688
(29,836
)
Adjustment for consolidation of Dayamitra
(61,728
)
(56,644
)
Asset retirement obligations
(1,696
)
(2,544
)
Deferred income tax:
Deferred income tax on equity method investments
39,343
35,040
Deferred income tax effect on U.S. GAAP adjustments
(89,704
)
(66,182
)
1,437,113
1,286,568
Minority interest
5,763
(10,481
)
Net adjustments
1,442,876
1,276,087
Stockholders' equity in accordance with U.S. GAAP
19,570,912
24,568,488
(2)
Stockholders' equity as of December 31, 2004 under
    Indonesian GAAP has been restated due to the adoption of PSAK
    24R (see Note 4a to the consolidated financial statements).
B.     Liquidity and Capital
Resources
TELKOM expects to have substantial liquidity and capital
resources requirements in the short and long term as it
continues to develop and expand its existing businesses,
including entering into new businesses. TELKOM expects that
these expenditures will be important factors in preparing to
face tight competition as the Indonesian telecommunications
market has been deregulated and maintaining its current position
as the leading Indonesian telecommunications and
full-service
network
provider.
TELKOM expects its principal liquidity and capital resources
requirements, aside from its requirements for working capital
and to make payments of dividends and taxes, will at least
consist of the following:
•
capital expenditures for existing and new network and backbone
    infrastructure, including a backbone transmission network on
    Ring JASUKA (Jawa, Sumatra and Kalimantan), Submarine Cable JDM
(Jember-Denpasar-Mataram),
the expansion of TELKOM's CDMA wireless access networks,
    the expansion of Submarine Cable SUB
(Surabaya-UjungPandang-Banjarmasin),
an additional ground satellite segment in Jakarta, fiber optic
    transmission network
Medan-Padang,
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softswitch development, the installation and upgrading of fixed
    lines and increased capacity in its mobile cellular service
    conducted through Telkomsel (see "— Capital
    Expenditures");
•
debt service requirements relating to existing indebtedness,
    including
two-step
loans, its
short-term
loan with Bank Central Asia and Bank Niaga, and its
medium-term
notes of
    Rp.610 billion, IDR bonds of Rp.1 trillion, loan facility
    from Bank Central Asia in relation to the construction of
    Sumatera backbone network, loan from a consortium of banks for
    the Regional Division V junction project, loans from Citibank
    N.A. through its Hermes Export facility, High Performance
    Backbone facility and EKN-Backed facility and a loan from the
    Export and Import Bank of Korea in connection with the CDMA
    project and loan facilities of Rp.40,000 million and
    Rp.2,500 million from Bank Mandiri;
•
installment payments of the purchase price for shares of
    AriaWest which are expected to be fully paid by January 31,
    2009;
•
payments of contribution to TELKOM's defined benefit
    pension plan and post-retirement health care plan;
•
fixed monthly payments to MGTI pursuant to the amended and
    restated agreement for KSO IV, commencing February 2004 and
    terminating in 2010; and
•
payment of call option price through monthly payment beginning
    in December 2004 and ending March 2006 relating to the
    acquisition of 9.68% shares of Dayamitra.
Liquidity and capital resources will also be required for TELKOM
to change its current DLD access code as a result of the end of
TELKOM's exclusive right to provide DLD services, with
possible expenditures for the creation of a new routing database
and costs for customer education and marketing. TELKOM will be
required to fully implement this change in its DLD access code
by April 1, 2010. See Item 4. "Information on the
Company — B. Business Overview —
Regulations — DLD and IDD Services."
In addition, liquidity and capital resources will be required
for the share repurchase plan. See Item 7. "Major
Stockholders and Related Party Transactions — A. Major
stockholders — General."
Primary sources of financing available to TELKOM consist of:
(i) cash flow from operating activities;
(ii) financing from bonds issuance; (iii) financing
from banks or export credit agencies (including financing
procured by vendors); and (iv) deferred vendor payment
arrangements.
TELKOM believes that these sources of financing will be
sufficient to fund planned capital expenditures, anticipated
working capital needs and likely contractual obligations and
commitments in the short and long term. Nonetheless, if global
or Indonesian economic conditions worsen or do not improve,
competition or product substitution accelerates beyond current
expectations or the value of the Rupiah depreciates
significantly against the U.S. Dollar, TELKOM's net
cash flow from operating activities may decrease and the amount
of required capital expenditures in Rupiah terms may increase,
any of which may negatively impact its liquidity.
TELKOM manages the liquidity for all of its businesses,
including KSOs controlled by TELKOM, on a total group basis.
However, Telkomsel manages its own liquidity and accesses
capital resources, independently of TELKOM.
With regard to Telkomsel, its management expects to continue
focusing on enhancing and expanding Telkomsel's network
capacity and infrastructure. It is expected that these
expenditures will allow Telkomsel to maintain its position as
the leading provider of mobile cellular services in Indonesia in
an increasingly competitive market for such services. In recent
years, Telkomsel's primary source of financing has been
cash flow from operating activities. Telkomsel's management
believes that Telkomsel will continue to generate sufficient
cash flow from its operating activities to fund planned capital
expenditures in the short and long term.
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Defaults and Waivers of
Defaults under our Debt Facilities
In 2005 we were in breach of certain covenants in our High
Performance Backbone debt facilities from Citibank and Bank
Central Asia (BCA), and the indenture in connection with our IDR
bonds of Rp.1 trillion which require us not to make any
loans to or for the benefit of any person which in the aggregate
exceed a certain amount. We have obtained written waivers from
Citibank International plc, acting as agent for lenders under
the relevant facility agreements, BCA and PT Bank Rakyat
Indonesia Tbk.(BRI), acting as trustee of the IDR bonds.
Net Cash Flows
The following table sets forth information concerning
TELKOM's consolidated cash flows, as set out in (and
prepared on the same basis as) the consolidated financial
statements, except for foreign exchange convenience translations
(see "— Basis of Presentation — Foreign
Exchange Translations"):
Year Ended December 31,
2003
2004
2005
2005
Rp. (billion)
Rp. (billion)
Rp. (billion)
US$ (million)
Net cash flows:
from operating activities
12,852.5
16,051.5
21,102.7
2,146.8
from investing activities
(7,305.9
)
(9,598.1
)
(12,212.7
)
(1,242.4
)
from financing activities
(6,177.4
)
(6,904.9
)
(8,339.4
)
(848.4
)
Change in cash and cash equivalents
(630.8
)
(451.5
)
550.6
56.0
Effect of foreign exchange changes on cash and cash equivalents
26.2
213.1
(32.0
)
(3.3
)
Cash and cash equivalents, beginning of year
5,699.1
5,094.5
4,856.1
494.0
Cash and cash equivalents, end of year
5,094.5
4,856.1
5,374.7
546.7
Net Cash Flows from
Operating Activities
TELKOM's primary source of liquidity in recent years was
cash flows from operating activities and from financing
activities. Net cash flows from operating activities totaled
Rp.12,852.5 billion in 2003, Rp.16,051.5 billion in
2004 and Rp.21,102.7 billion (US$2,146.8 million) in
2005. In 2004, the growth in operating cash flows principally
resulted from higher cash receipts from operating revenues as a
result of an increase in data and Internet revenues, the
expansion of TELKOM's fixed line business as well as the
acquisition of KSO IV, growth in its mobile cellular business
conducted through Telkomsel and higher interconnection revenues
from mobile cellular operators. In 2005, the growth in operating
cash flows principally resulted from higher cash receipts from
operating revenues as a result of growth in its mobile cellular
business conducted through Telkomsel, higher interconnection
revenues from mobile cellular operators and IDD operators and
its IDD service business (TIC-007), and higher data and Internet
revenues due to increased SMS, data communication and broadband
Internet access network usage.
Year ended December 31,
2005 compared to year ended December 31, 2004.
In 2005 compared to 2004, net cash flows from operating
activities increased by Rp.5,051.2 billion, or 31.5%,
primarily due to:
•
an increase of Rp.4,327.7 billion, or 41.2%, in cash
    receipts from cellular business, primarily due to a growth in
    the mobile cellular business of Telkomsel;
•
an increase of Rp.1,636.9 billion, or 28.4%, in cash
    receipts from interconnection services, primarily due to an
    increase in cellular interconnection fees, resulting from an
    increased mobile cellular subscriber base in Indonesia; and
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Table of Contents
•
an increase of Rp.1,978.8 billion, or 39.8%, in cash
    receipts from data and Internet primarily due to increases in
    SMS usage by Telkomsel subscribers and the number of Speedy
    subscribers.
This increase was partially offset by:
•
an increase of Rp.2,684.1 billion, or 21.9%, in cash
    payments for operating expenses, which is in line with the
    increase in operating expenses (excluding depreciation and
    amortization, write-down of assets and loss on procurement
    commitments).
Year ended December 31,
2004 compared to year ended December 31, 2003.
In 2004 compared to 2003, net cash flows from operating
activities increased by Rp.3,199.0 billion, or 24.9%,
primarily due to:
•
an increase of Rp.2,760.2 billion, or 124.7%, in cash
    receipts from data and Internet services, particularly from
    greater SMS usage by Telkomsel subscribers;
•
an increase of Rp.1,882.6 billion, or 23.0%, in cash
    receipts from fixed lines telephone services, primarily from the
    increase in the number of subscribers for fixed wireline and
    fixed wireless services, as well as from the acquisition of KSO
    IV;
•
an increase of Rp.1,562.6 billion, or 37.2%, in cash
    receipts from interconnection, primarily due to an increase in
    interconnection fees collected from mobile cellular operators;
    and
•
an increase of Rp.1,572.3 billion, or 17.6%, in cash
    receipts from cellular, due to growth in mobile cellular
    business conducted through Telkomsel.
This increase was partially offset by:
•
an increase of Rp.3,408.8 billion, or 38.5%, in cash
    payments for operating expenses, which is in line with the
    increase in operating expenses (excluding depreciation and
    amortization); and
•
a decrease of Rp.648.1 billion, or 54.2%, in cash receipts
    from joint operation schemes, primarily due to the acquisition
    of KSO IV.
Net Cash Flows from Investing Activities
Net cash flows used in investing activities totaled
Rp.7,305.9 billion, Rp.9,598.1 billion and
Rp.12,212.7 billion (US$1,242.4 million) in 2003, 2004
and 2005, respectively. In 2003, 2004 and 2005, the net cash
used in investing activities were primarily used for capital
expenditures.
Apart from cash on hand and cash in banks, TELKOM invests the
majority of its excess cash from time to time in time deposits.
Since May 14, 2004, TELKOM also has been investing a part
of its excess cash in Rupiah-based mutual funds. At
December 31, 2005, Rp.159.9 billion of time deposit
had a maturity greater than three months and Rp.22 billion
(US$2.2 million) of mutual funds were outstanding.
Year ended December 31,
2005 compared to year ended December 31, 2004.
In 2005 compared to 2004, net cash flows used in investment
activities increased by Rp.2,614.6 billion, or 27.2%,
primarily due to:
•
an increase of Rp.3,538.1 billion, or 41.3%, in the
    acquisition of property, plant and equipment, primarily due to
    an additional installation of transmission stations, earth
    stations and equipment, cable network and an investment in data
    processing equipment.
This increase was partially offset by a decrease of
Rp.851.2 billion, or 80%, in cash payments for advances for
the purchase of property, plant and equipment.
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Year ended December 31,
2004 compared to year ended December 31, 2003.
In 2004 compared to 2003, net cash flows used in investment
activities increased by Rp.2,292.2 billion, or 31.4%,
primarily due to:
•
a decrease of Rp.1,609.9 billion, or 84.9%, in the cash
    proceeds from sale of temporary investments and the maturity of
    time deposits; and
•
an increase of Rp.1,063.4 billion for payments of advances
    for the purchase of property, plant and equipment.
Net Cash Flows from Financing Activities
Net cash flows used in financing activities totaled
Rp.6,177.4 billion, Rp.6,904.9 billion and
Rp.8,339.4 billion (US$848.4 million) in 2003, 2004
and 2005, respectively. In all three years, net cash flows from
financing activities were driven primarily by repayments of
outstanding indebtedness and by payments of cash dividends. In
2005, cash flow used in financing activities increased by
Rp.1,434.5 billion, or 20.8%, primarily resulting from a
148.3% increase in payments of cash dividends to minority
shareholders of subsidiaries to Rp.1,694.3 billion, a
193.6% decrease in proceeds from short-term borrowings (net of
repayments) from net proceeds of Rp.1,062.2 billion in 2004
to net repayments of Rp.994.7 billion in 2005, and a 76.1%
decrease in proceeds from long-term borrowings to
Rp.570.0 billion. This increase was partially offset by a
decrease of Rp.4,011.0 billion in repayments of long-term
borrowings.
Repayments of Current
Indebtedness.
At December 31, 2003, 2004 and 2005, approximately 89.2%,
72.7% and 72.7%, respectively, of TELKOM's current
indebtedness for borrowed money (consisting of current
maturities of long-term liabilities and short-term bank loans)
were denominated in foreign currencies, principally the
U.S. Dollar, such that the Rupiah amount of TELKOM's
cash flows used for the repayment of long-term liabilities was
significantly affected by the depreciation of the Rupiah in 2004
and 2005, compared to the appreciation of the Rupiah in 2003.
In 2003, 2004 and 2005, TELKOM made net repayments of current
indebtedness for borrowed money of Rp.3,050.0 billion,
Rp.7,601.6 billion and Rp.4,096.8 billion
(US$416.8 million), respectively. Cash outflows in 2005
reflected payments for:
•
two-step loans of Rp.716.3 billion;
•
liabilities from business acquisitions of AriaWest and KSO IV of
    Rp.568.8 billion;
•
Rp.2,336.1 billion for payment of bank loans; and
•
Rp.475.6 billion for payment of medium-term notes and
    obligations under capital leases.
Payment of Cash Dividends.
TELKOM paid cash dividends, as determined by the Company's
annual shareholder meeting, as follows:
Dividend
Total Cash
Dividend
Date of AGMS
Year
Dividends
per Share
(1)
(Rp. billion)
(Rp.)
May 9, 2003
2002
3,338.1
331.16
July 30, 2004
2003
3,043.6
301.95
June 24, 2005
2004
3,064.6
(2)
152.01
(1)
Dividend per share for 2002 and 2003 were prior to the
    two-for-one stock split as resolved in the AGMS on July 30,
    2004.
(2)
Including interim cash dividends distributed in December 2004
    amounting to Rp.143.4 billion.
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In 2003, 2004 and 2005, the amount of cash dividends paid was
effectively determined by the Government, which holds a majority
of TELKOM's issued and outstanding common shares. TELKOM
believes that the Government considers various factors,
including the views of TELKOM's board of directors and the
Government's own funding needs in determining the portion
of each year's net income to be paid out as cash dividends.
In 2003, 2004 and 2005, cash dividends paid to minority
shareholders of subsidiaries amounted to Rp.402.0 billion,
Rp.682.4 billion and Rp.1,694.3 billion, respectively,
which primarily represented cash dividends paid to minority
shareholders of Telkomsel.
Escrow Accounts.
In 2005, TELKOM recorded a net increase in escrow accounts of
Rp.96.2 billion (US$9.8 million), primarily resulting
from the funds deposited into the escrow accounts in connection
with the payment of TELKOM's obligations for the
acquisition of the remaining 9.68% of the shares of Dayamitra.
See Item 4. "Information on the Company —
B. Business Overview — General — Joint
Operation Scheme".
Working Capital
Net working capital, calculated as the difference between
current assets and current liabilities, was Rp.(2,473.1) billion
at December 31, 2004 and Rp.(3,208.6) billion (US$(326.4)
million) at December 31, 2005. The decrease in net working
capital was principally due to increases in trade accounts
payable, taxes payable, accrued expenses and unearned income.
These increases were partially offset by increases in cash and
cash equivalent, trade accounts receivable, prepaid expenses and
other current assets, and a decrease in short-term bank loans.
Current Assets
Current assets were Rp.9,203.9 billion at December 31,
2004 and Rp.10,304.6 billion (US$1,048.3 million) at
December 31, 2005, reflecting an increase of
Rp.1,100.7 billion, or 12.0%. The increase in current
assets was primarily due to:
•
an increase of Rp.518.6 billion, or 10.7%, in cash and cash
    equivalents from Rp.4,856.1 billion in 2004 to
    Rp.5,374.7 billion in 2005;
•
an increase of Rp.149.8 billion, or 23.8%, in prepaid
    expenses from Rp.628.1 billion in 2004 to
    Rp.777.9 billion in 2005;
•
an increase of Rp.258.8 billion, or 7.8%, in trade accounts
    receivable from Rp.3,319.1 billion in 2004 to
    Rp.3,577.9 billion in 2005;
•
an increase of Rp.97.4 billion, or 174.6%, in other
    accounts receivable from Rp.55.8 billion in 2004 to
    Rp.153.2 billion in 2005; and
•
an increase of Rp.114.9 billion, or 257.6%, in other
    current assets from Rp.44.6 billion in 2004 to
    Rp.159.5 billion in 2005.
These increases were partially offset by:
•
a decrease of Rp.58.3 billion, or 75.5%, in prepaid taxes
    from Rp.77.2 billion in 2004 to Rp.18.9 billion in
    2005.
At December 31, 2003, 2004 and 2005, approximately 19.4%,
22.3% and 17.8%, respectively, of TELKOM's current assets
were denominated in foreign currencies, principally the
U.S. Dollar in 2003, the Euro and the U.S. Dollar in
2004 and the U.S. Dollar in 2005, such that the movements
of Rupiah exchange rate against U.S. Dollar and Euro across
these years would affect TELKOM's current assets.
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Trade Accounts Receivable.
Trade accounts receivable from related parties (net of allowance
for doubtful accounts) increased by Rp.111.3 billion, or
26.6%, from Rp.419.1 billion as of December 31, 2004
to Rp.530.4 billion (US$54 million) at
December 31, 2005. Trade accounts receivable from third
parties (net of allowance for doubtful accounts) increased by
Rp.147.5 billion, or 5.1%, from Rp.2,900.0 billion at
December 31, 2004 to Rp.3,047.5 billion
(US$310 million) at December 31, 2005, primarily due
to an increase in trade accounts receivable from residential and
business subscribers. In the case of trade accounts receivable
from related parties, the increase was primarily due to an
increase in trade accounts receivable from the government
agencies.
The allowance for doubtful accounts for trade accounts
receivable from related parties increased by
Rp.19.4 billion, or 29.9%, from Rp.64.9 billion at
December 31, 2004 to Rp.84.3 billion
(US$8.6 million) at December 31, 2005, in line with
the increase in the amount of accounts receivable from related
parties.
At December 31, 2005 compared to December 31, 2004,
the allowance for doubtful accounts for trade receivables from
third parties increased by Rp.144.3 billion, or 31.6%, from
Rp.457.1 billion to Rp.601.4 billion
(US$61.2 million), in line with the increase in the amount
of accounts receivable from third parties.
Other Current Assets.
At December 31, 2005, Rp.159.5 billion
(US$16.2 million) of TELKOM's time deposits with
maturity of less than one year were restricted for security
interests for bank guarantees.
Current Liabilities
Current liabilities were Rp.11,677.0 billion at
December 31, 2004 and Rp.13,513.2 billion
(US$1,374.7 million) at December 31, 2005, reflecting
an increase of Rp.1,836.2 billion, or 15.7%. The increase
in current liabilities primarily arose from increases in the
following: (a) trade accounts payable; (b) taxes
payable; (c) accrued expenses; and (d) unearned income.
At December 31, 2003, 2004 and 2005, approximately 42.5%,
31.6% and 31.4%, respectively, of TELKOM's current
liabilities were denominated in foreign currencies, principally
the U.S. Dollar, such that the movement of Rupiah exchange
rate against U.S. Dollar across these years significantly
affected TELKOM's current liabilities.
Current Maturities of Long-term
Liabilities.
Current maturities of long-term liabilities decreased by
Rp.73.9 billion, or 3.2%, from Rp.2,300.8 billion at
December 31, 2004 to Rp.2,226.9 billion
(US$226.5 million) at December 31, 2005. This decrease
was primarily due to the decreases in current maturities of the
two-step loans and TELKOM's medium-term notes, which
decrease was partially offset by increases in current maturities
of bank loans and liabilities of business acquisitions.
Accrued Expenses.
Accrued expenses increased by Rp.469.8 billion, or 44.7%,
from Rp.1,051.4 billion at December 31, 2004 to
Rp.1,521.2 billion (US$154.8 million) at
December 31, 2005. The increase was primarily due to an
increase of Rp.201.5 billion, or 83.1%, in accruals for
general, administrative and marketing expenses from
Rp.242.6 billion at December 31, 2004 to
Rp.444.1 billion at December 31, 2005, an increase of
Rp.131.2 billion, or 40.8%, in accrued salaries and
benefits from Rp.321.2 billion at December 31, 2004 to
Rp.452.4 billion at December 31, 2005, and an increase
of Rp.86.8 billion, or 26.7% in accruals for operations,
maintenance and telecommunication services expenses from
Rp.324.3 billion at December 31, 2004 to
Rp.411.1 billion at December 31, 2005.
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Indebtedness
Consolidated total indebtedness (consisting of long-term
liabilities, current maturities of long-term liabilities and
short-term bank loans) at December 31, 2003, 2004 and 2005,
was as follows:
At December 31,
2003
2004
2005
2005
(Rp. in billion)
(US$ in million)
Indonesian
    Rupiah
(1)
4,485.1
4,550.0
4,009.0
407.8
U.S. Dollar
(2),(3)
8,562.2
9,904.2
7,993.9
812.8
Japanese
    Yen
(4)
1,377.7
1,512.4
1,302.6
132.5
EURO
(5)
890.7
649.7
427.7
43.5
Total
15,315.7
16,616.3
13,733.2
1,396.6
(1)
Amounts at December 31, 2005 include debt issuance costs
    for medium-term notes of Rp.0.7 billion. In addition for
    2003, 2004 and 2005, amounts also include bond issuance costs
    for TELKOM bonds of Rp.18.7 billion, Rp.13.4 billion
    and Rp.8.15 billion.
(2)
Amounts at December 31, 2003, 2004 and 2005 translated into
    Rupiah at Rp.8,450, Rp.9,300 and Rp.9,835 = US$1, respectively,
    being the Reuters sell rates for U.S. Dollars at each of
    those dates.
(3)
Amounts at December 31, 2003 include imputed interest on
    liabilities of business acquisitions relating to Pramindo and
    AriaWest of US$9.5 million (Rp.80.2 billion) and
    US$14.5 million (Rp.122.4 billion), respectively.
    Amounts at December 31, 2004 include imputed interest on
    liabilities of business acquisitions relating to AriaWest, the
    remaining 9.68% interest in Dayamitra and KSO IV in the
    amount of US$9.7 million (Rp.90.2 billion),
    US$1.3 million (Rp.11.9 billion) and
    US$101.0 million (Rp.938.7 billion), respectively.
    Amounts at December 31, 2005 included imputed interest on
    liabilities of business acquisitions relating to Aria West, the
    remaining 9.68% interest in Dayamitra and KSO IV of
    US$5.8 million (Rp.57.3 billion), US$0.3 million
    (Rp.2.5 billion) and US$72.9 million
    (Rp.717.1 billion), respectively, being imputed interest on
    installment payments of the foregoing liabilities.
(4)
Amounts at December 31, 2003, 2004 and 2005 translated into
    Rupiah at Rp.79.05, Rp.90.6 and Rp.83.89 = Yen 1,
    respectively, being the prevailing exchange rates for buying Yen
    at each of those dates.
(5)
Amounts at December 31, 2003, 2004 and 2005 translated into
    Rupiah at Rp.10,663.9, Rp.12,666.9 and Rp.11,651.5 =
    EURO 1, respectively, being the prevailing exchange rate
    for buying Euros at each of those dates.
Of total indebtedness at December 31, 2005,
Rp.2,400.7 billion, Rp.3,407.2 billion and
Rp.7,925.3 billion were scheduled for repayments in 2006,
2007 and 2008-2024, respectively. Of these amounts, Telkomsel
was scheduled to repay Rp.493.3 billion in 2006,
Rp.323.3 billion in 2007 and Rp.180.7 billion in 2008.
Further, Rp.14.3 billion was to be repaid by Dayamitra in
2006. Infomedia was scheduled to repay Rp.4.7 billion,
Rp.3.4 billion and Rp.2.3 billion in 2006, 2007 and
2008, respectively.
TELKOM expects scheduled repayments of indebtedness to be
financed primarily from net cash flows from operating activities
and re-financing by TELKOM, Telkomsel and Dayamitra,
respectively.
At December 31, 2005, approximately 53.01% of TELKOM's
Rupiah-denominated indebtedness and approximately 24.38% of its
U.S. Dollar-denominated indebtedness bore interest at
floating rates. TELKOM's Rupiah-denominated floating rate
indebtedness bore interest rates between 8.54% and 13.27%, with
rates generally based on interest rates on three-month
Certificates of Bank Indonesia (SBI) plus a margin of 1.0%. The
weighted average interest rate on Rupiah-denominated floating
rate indebtedness at December 31, 2005 was 9.17%.
TELKOM's U.S. Dollar-denominated floating rate
indebtedness was subject to interest rates between 4.02% and
5.31%, with rates generally based on floating interest rates
offered by the lenders or LIBOR plus a margin of between 0.5%
and 0.75%. The weighted average interest rate on
U.S. Dollar-denominated floating rate indebtedness at
December 31, 2005 was 5.03%. TELKOM's
Rupiah-denominated fixed rate indebtedness at that date bore a
weighted average interest rate of 15.29%, while its
U.S. Dollar-denominated fixed rate indebtedness bore a
weighted average interest rate of 5.70%. All of TELKOM's
Japanese Yen-denominated indebtedness was fixed rate and bore a
weighted average interest rate at December 31, 2005 of
3.11%.
At December 31, 2005, TELKOM had the following outstanding
significant indebtedness:
•
Rp.5,329.5 billion (US$542.2 million) (including
    current maturities) in two-step loans through the Government;
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•
Rp.991.9 billion (US$100.9 million) (after bond
    issuance costs) IDR bonds issued by TELKOM;
•
Rp.693.7 billion (US$70.6 million) (including current
    maturities) in acquisition indebtedness relating to
    TELKOM's acquisition of 100% equity interest in AriaWest
    (after discount);
•
Rp.3,151.3 billion (US$320.6 million) representing the
    present value of fixed monthly payments to be paid to MGTI in
    respect of the acquisition of KSO IV;
•
Rp.609.3 billion (US$62.0 million) medium-term notes
    (net of debt issuance costs) issued by TELKOM;
•
Rp.1,156.3 billion (US$117.6 million) in project
    financing from the Export and Import Bank of Korea in connection
    with the CDMA Project;
•
Rp.301.0 billion (US$30.6 million) loan for the
    Sumatera backbone network; and
•
Rp.827.3 billion (US$84.2 million) (including current
    maturities) of Telkomsel's loan from Citibank International
    plc through its Hermes Export facility (Rp.427.7 billion)
    and
EKN-Backed
facility
    (Rp.399.6 billion).
Two-Step Loans
Since 1982, TELKOM has entered into a series of two-step loans
in which the Government borrows money from supranational lenders
and foreign export credit agencies, such as the World Bank and
the U.S. Export-Import Bank, for on-lending to TELKOM to
fund investment in property, plant and equipment. TELKOM
obtained its last two-step loan in 1994 and, as a public
company, is no longer eligible to obtain Government-assisted
financing of this type.
At December 31, 2005, TELKOM's outstanding principal
indebtedness under the two-step loans totaled
Rp.5,329.5 billion (US$542.2 million), of which
US$227.0 million (Rp.2,232.7 billion) was denominated
in U.S. Dollars and ¥15,527.6 million
(Rp.1,302.6 billion) was denominated in Japanese Yen. As of
December 31, 2005, TELKOM has used all facilities of
two-step loans and the draw period for the two-step loan has
expired.
Two-step loans bear fixed or floating rates. Floating rates are
determined by reference to interest rates on the average of
3-month
Certificates of
Bank Indonesia (SBI) during the six months preceding the
installment due date plus 1.0% per annum or the interest rate
offered by lenders plus 5.25% for
two-step
loans which
are payable in Rupiah and the interest rate offered by offshore
lenders plus 0.5% for two-step loans which are payable in
foreign currencies. Repayments of principal are due on the loans
at various dates through 2024. For the years 2006 through 2010,
aggregate scheduled repayments of principal range from
Rp.418.0 billion to Rp.569.3 billion per year and
average Rp.476.3 billion per year.
The Company must maintain financial ratios as follows:
•
Projected net revenue to projected debt service ratio should
    exceed 1.5:1 and 1.2:1 for two-step loans originating from World
    Bank and Asian Development Bank ("ADB"), respectively;
    and
•
Internal financing (earnings before depreciation and interest
    expenses) should exceed 50% and 20% compared to capital
    expenditures for loans originally from the World Bank and ADB,
    respectively.
As of December 31, 2005, the Company was in compliance with
the above covenants.
Direct Borrowings
Beginning in 2002, TELKOM began funding a significant portion of
its capital expenditures through vendor-procured and other
direct borrowings from banks and other lenders, including the
capital markets. On February 25, 2002, TELKOM borrowed
US$4.0 million and Rp.90.0 billion from a consortium
of Indonesian banks to finance the development of an Internet
protocol backbone.
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TELKOM had never previously borrowed directly from a commercial
bank to finance capital expenditures. As of December 31,
2005, there was no outstanding amount under these facilities.
On April 10, 2002, TELKOM borrowed US$51.4 million and
Rp.173.0 billion from Citibank N.A. and PT Bank
Central Asia to finance the development of a high performance
backbone in Sumatera. Citibank loans, which were supported by an
export credit guarantee of Hermes Kreditversicherungs AG and
Istituto per I Servizi Assicurativi del Commercio Estero
("SACE" Italy), bear interest rate at a rate equal to
6-month
LIBOR plus
0.75% and fixed interest rate of 4.14%, respectively. Bank
Central Asia loan bears interest at 4.35% plus the
3-month
time deposit
rate. As of December 31, 2005, the outstanding amounts
under these facilities were US$21.9 million and
Rp.86.1 billion.
On June 21, 2002, TELKOM entered into a loan agreement with
several Indonesian banks in which Bank Bukopin acted as facility
agent for Rp.150 billion to fund the development of the
regional junction Regional Division V project. The lenders
charged interest at the rate of 19.5% for the first year and at
the average 3-month deposit rate plus 4% for the remaining
years. A substantial portion of these loans were supported by
export credit agency guarantees procured by the equipment
vendors for the project. As of December 31, 2005, the
outstanding amount under these facilities were
Rp.74.89 billion.
On August 27, 2003 TELKOM entered into a Loan Agreement
with The Export-Import Bank of Korea for approximately
US$124.0 million, with a portion of the loan amount to be
used by TELKOM to finance its obligations under the Master of
Procurement Partnership Agreement ("MPPA") it had
entered into with a consortium led by Samsung Corporation. The
loan bears interest, commitment and other fees totaling 5.68%.
As of December 31, 2005, the outstanding amount under this
facility was US$117.6 million.
On December 20, 2004, TELKOM entered into a short-term debt
financing arrangement with Hong Kong and Shanghai Banking
Corporation in the amount of Rp.100.0 billion with interest
rate at one-month Certificate of Bank Indonesia plus 1%, and
US$49 million with interest rate at LIBOR plus 1.8%. This
loan was fully repaid on October 14, 2005.
On December 21, 2004, TELKOM entered into a
US$65.0 million short-term loan facility agreement with ABN
AMRO to be used for working capital purposes. The principal
amount of US$30 million matured on March 31, 2005 and
was repaid, and the principal amount of US$35 million
matured on June 30, 2005 and was repaid. The loan bears
interest at 3-month US Dollar LIBOR plus 2.5%.
On December 3, 2004, Telkomsel entered into a short-term
loan agreement with Bank Central Asia (BCA) for the total
facility of Rp.170 billion. The loan bears interest at the
3-month
Bank Indonesia
Certificate plus 1% (13.09% as of December 31, 2005),
payable in arrears. The principal outstanding as of
December 31, 2005 was Rp.170.0 billion. The loan was
fully repaid on February 1, 2006.
IDR Bond Issuance
On July 16, 2002, TELKOM issued bonds denominated in Rupiah
amounting to Rp.1,000 billion. The bonds were issued at par
value and have a term of five years. The bonds bear interest at
a fixed rate of 17% per annum, payable quarterly beginning
October 16, 2002. The bonds are traded on the Surabaya
Stock Exchange and will mature on July 16, 2007. Net
proceeds after bond issuance costs of Rp.19.2 billion
amounted to Rp.980.8 billion.
As of December 31, 2004, all of the bond proceeds have been
used, primarily for the CDMA project with the remainder for the
access network.
The Company must maintain the following consolidated financial
ratios:
•
Debt service coverage ratio must exceed 1.5:1;
•
Debt to equity ratio must not exceed (i) 3:1 for the period
    January 1, 2002 to December 31, 2002; (ii) 2.5:1
    for the period January 1, 2003 to December 31, 2003;
    and (iii) 2:1 for the period January 1, 2004 to the
    date the bonds are redeemed; and
•
Debt to EBITDA ratio must not exceed 3:1.
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TELKOM also covenanted in the bonds indenture that during the
periods the bonds are outstanding, TELKOM would not make any
loans to or for the benefit of any person which in the aggregate
exceed Rp.500 billion. In 2005, TELKOM breached this
covenant. As of March 24, 2006, TELKOM had obtained a
written waiver from PT Bank Rakyat Indonesia Tbk., the trustee
of the bonds, which allows TELKOM to provide loans to certain
subsidiaries in an amount which in the aggregate exceeds
Rp.500 billion. See "— B. Liquidity and
Capital Resources — Defaults and Waivers of Defaults
under our Debt Facilities".
Medium-Term Notes
On December 13, 2004, TELKOM issued unsecured medium-term
notes ("MTN") in the principal amount of
Rp.1.125 trillion in four series, pursuant to a Medium-Term
Notes Issuance Agreement dated December 13, 2004.
Series A and Series B have matured and have been
repaid as of December 31, 2005. Series C is in the
principal amount of Rp.145 billion, matures on
June 15, 2006 and bears interest at the rate of 8.2% per
annum, and Series D is in the principal amount of
Rp.465 billion, matures on June 15, 2007 and bears
interest at the rate of 9.4% per annum. Interest on the
outstanding MTN is payable on June 15, 2006,
December 15, 2006 and June 15, 2007. Scheduled
interest payments have been made on their due dates as of the
date of this Annual Report. The MTN were offered at their
principal amounts.
Under the terms and conditions of the MTN, TELKOM cannot,
without prior approval of holders of a majority of the
outstanding principal amount of the MTN, take certain actions,
including (i) encumber, pledge or charge any part of its
assets, with certain exceptions; (ii) provide, or to cause
its subsidiaries to provide, any corporate guarantee to any
third party, except corporate guarantees relating to the
obligations of its subsidiaries, for the purpose of tendering or
acquiring assets through export credit; (iii) merge or
consolidate with other companies which results in a material
adverse effect to the operations and financial condition of
TELKOM; and (iv) dispose of assets which are in aggregate
more than 5% of TELKOM's net fixed assets.
TELKOM is required at the end of each calendar quarter during
the life of the MTN to maintain certain financial ratios,
namely: (i) debt service coverage ratio of not less than
1.5 to 1; (ii) debt to equity ratio of not more than 2 to
1; and (iii) debt to EBITDA ratio of not more than 3 to 1.
As of the date of this Annual Report, TELKOM is in compliance
with these ratios.
Acquisition Indebtedness and Option Purchase Price
Dayamitra
On December 14, 2004, TELKOM exercised the option to buy
the remaining 9.68% shares owned by TM Communication in
Dayamitra to complete its 100% acquisition of Dayamitra. Payment
for the shares in the amount of US$16.2 million will be
made on March 26, 2006 through an escrow account in
Citibank Singapore. TELKOM has been making monthly payments of
US$787,390 to the escrow account starting from December 26,
2004, which will end on March 26, 2006. TELKOM issued a
non-transferable promissory note to TM Communications as a
guarantee to buy the shares on March 26, 2006, during which
TM Communications will concurrently transfer the 9.68% share
certificate of Dayamitra to TELKOM. As a result, TELKOM
currently controls 100% of Dayamitra.
AriaWest
On July 31, 2003, TELKOM acquired all the shares of
AriaWest. As a result of the acquisition, TELKOM owes the former
shareholders of AriaWest US$109.1 million, which is being
repaid in ten semi-annual installments from July 31, 2004
through January 31, 2009. As of December 31, 2005, the
amount payable to AriaWest's former shareholders, before
unamortized discount, totaled US$76.4 million.
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KSO IV
On January 20, 2004, TELKOM and MGTI entered into an
agreement to amend and restate the KSO Agreement with respect to
Regional Division IV. For details, see Item 4.
"Information on the Company — B. Business
Overview — General — Joint Operation
Scheme".
At December 31, 2005, the remaining monthly payments to be
made by TELKOM to MGTI, before unamortized discount, amounted to
US$393.3 million (Rp.3,868.4 billion).
Sumatera High Performance Backbone Network
On April 10, 2002, TELKOM entered into four term loan
facilities to finance the construction of the Sumatera high
performance backbone network. These four facilities were entered
into with (i) Bank Central Asia, for Rp.173 billion;
(ii) Citibank, N.A., for US$6.95 million;
(iii) Citibank International plc as agent for certain
lenders under a syndicated loan, for US$23.40 million
(supported by an export credit guarantee of Hermes
Kreditversicherungs AG); and (iv) Citibank
International plc as agent for certain lenders under a
syndicated loan, for US$21.00 million (supported by an
export credit guarantee of Istituto per I Servizi Assicurativi
del Commercio Estero). As of December 31, 2005, all of
these facilities have been fully or partially utilized, with the
US$6.95 million loan to Citibank, N.A. being fully repaid
in May 2003.
Under the facility with Bank Central Asia, TELKOM is required at
the end of each calendar quarter during the life of the facility
to maintain certain financial ratios, namely: (i) debt to
EBITDA ratio of not more than 3 to 1; (ii) EBITDA to
interest expense ratio of at least 4 to 1; and (iii) EBITDA
to interest expense and principal ratio of at least 1.5 to 1.
TELKOM also covenanted in this facility that TELKOM would not
make any loans to or for the benefit of any person which in the
aggregate exceed Rp.500 billion. In 2005, TELKOM breached
this covenant. As of April 24, 2006, TELKOM had obtained a
written waiver from Bank Central Asia with regard to providing
loans to certain subsidiaries, in an amount which in the
aggregate exceeds Rp.500 billion . See "— B.
Liquidity and Capital Resources — Defaults and Waivers
of Defaults under our Debt Facilities.
Under the other outstanding facilities, during the period when
the subject loans are outstanding, TELKOM is required to
maintain the following financial ratios:
(i) debt service coverage ratio of not less than 1.5 to 1;
    (ii) debt to equity ratio of not more than: (a) 3 to 1
    for the period of April 10, 2002 to January 1, 2003,
    (b) 2.75 to 1 for the period of January 2, 2003 to
    January 1, 2004, (c) 2.5 to 1 for the period of
    January 2, 2004 to January 1, 2005 and (d) 2 to 1
    for the period of January 2, 2005 to the full repayment
    date of the loans (iii) debt to EBITDA ratio of not more
    than: (a) 3.5 to 1 for the period from April 10, 2002
    to January 1, 2004 (b) 3 to 1 for the period from
    January 2, 2004 to the full repayment date of the loans.
    TELKOM also covenanted in these facilities that TELKOM would not
    make any loans or grant any credit to or for the benefit of any
    person in an amount which in the aggregate exceeds 3% of
    TELKOM's stockholders' equity. In 2005, TELKOM
    breached this covenant. As of May 12, 2006, TELKOM had
    obtained a written waiver from Citibank International plc with
    regard to providing loans to certain subsidiaries, which in the
    aggregate exceed 3% of TELKOM's stockholders' equity.
    See "— B. Liquidity and Capital
    Resources — Defaults and Waivers of Defaults under our
    Debt Facilities.
Regional Division V Junction Project
On June 21, 2002, TELKOM entered into a loan agreement with
a consortium of banks for a Rp.400 billion facility in
order to finance the Regional Division V junction project.
The original loan was to be repaid in 14 quarterly installments
starting from April 2004. The loan agreement was amended on
April 4, 2003 to reduce the facility amount to
Rp.150 billion and provide for repayments to be made in 14
quarterly installments starting on May 21, 2004. As of
December 31, 2005, TELKOM had drawn down a total of
Rp.148.9 billion of this loan. As of December 31,
2005, the outstanding amount of the loan was
Rp.74.89 billion.
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Under this loan agreement, TELKOM is required at the end of each
calendar quarter during the life of the facility to maintain
certain financial ratios, namely: (i) debt to equity ratio
of not more than 3 to 1; and (ii) EBITDA to interest
expense ratio of not less than 5 to 1. As of the date of this
Annual Report, TELKOM is in compliance with these ratios.
Telkomsel's Indebtedness (including
    facilities)
Hermes Export Facility
On December 2, 2002, pursuant to the Partnership Agreement
with Siemens Aktiengesellschaft (AG), Telkomsel entered into a
Hermes Export Facility Agreement with Citibank International plc
(as Original Lender and Agent) providing a total facility of EUR
76.2 million divided into several tranches. The agreement
was subsequently amended with the latest amendment on
October 15, 2003, to reduce the facility amount to EUR
73.4 million. The interest rate on this facility is the
aggregate of applicable margin, EURIBOR and "mandatory
cost" incurred to comply with the requirements of foreign
banking or financial regulatory agencies, if any, and is paid
semi-annually, starting on the utilization date of the facility
(May 29, 2003). Interest paid for the loan was at 2.96% and
3.33% per annum as of December 31, 2004 and 2005,
respectively. As of December 31, 2005, total loans drawn
from the facility amounted to EUR 73.4 million and the
outstanding balance was EUR 36.7 million.
EKN-Backed Facility
On December 2, 2002, pursuant to the partnership agreement
with PT Ericsson Indonesia, Telkomsel entered into the
EKN-Backed Facility Agreement with Citibank International plc
(as Original Lender and Agent) covering a total facility amount
of US$70.5 million divided into several tranches. In
December 2004, the agreement was amended to reduce the facility
amount to US$68.9 million. The interest rate on the
facility is based on the aggregate of the applicable margin,
commercial interest reference rate and mandatory compliance
cost, if any (i.e., 4.02% as of December 31, 2004 and
2005). Interest is paid semi-annually, starting on the date
amounts are drawn (July 31, 2003). As of December 31,
2005, Telkomsel had drawn down US$68.95 million from this
facility and the outstanding balance was US$40.65 million.
Dayamitra's
Indebtedness
As of December 31, 2005, Dayamitra had an indebtedness
outstanding of Rp.14.3 billion (US$1.5 million),
representing loan facilities from Bank Mandiri pursuant to the
terms of loan agreements entered into on December 20, 2003.
The loans are payable on a quarterly basis until the fourth
quarter of 2006 and bear interest at 14% per annum.
Capital Expenditures
At December 31, 2005, TELKOM (unconsolidated) incurred
capital expenditures of Rp.3,367.8 billion
(US$342.6 million), which was less than the Rp.
5,572.4 billion originally budgeted in its capital
expenditure plan.
TELKOM groups its capital expenditures into the following
categories for planning purposes:
•
Infrastructure, which consists of the transmission network and
    backbone (including data backbone and fixed line network
    backbone infrastructure) and access network (including fixed
    wireless networks);
•
Phone, which is essentially fixed wireline and fixed wireless;
•
Mobile Cellular, which consists of GSM mobile wireless telephone
    services and is presently conducted through Telkomsel;
•
Multimedia, which consists of Internet access, VoIP services and
    data services and other content development; and
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•
Service-Net, which consists of various commercial services
    intended to increase traffic on TELKOM's network, including
    interconnection, Internet network and third-party call centers.
In addition, Telkomsel incurred capital expenditures of
Rp.10,085.7 billion (US$1,026.0 million) for network
infrastructure and other investments and TELKOM's other
subsidiaries incurred capital expenditures of
Rp.99.5 billion (US$10.1 million).
The following table sets out TELKOM's historical and
planned capital expenditure requirements for the periods
indicated, including historical and planned capital expenditures
for Telkomsel, Dayamitra and TELKOM's other consolidated
subsidiaries:
Year Ended December 31,
2003
(1)
2004
(1)
2005
(1)
2006
(2)
2007
(3)
Rp. (billion)
TELKOM:
Infrastructure:
Transmission Network and Backbone
1,595.1
560.4
277.7
1,205.3
1,015.0
Access Network
1,849.6
1,831.2
1,577.0
2,937.1
1,724.5
Subtotal Infrastructure
3,444.7
2,391.6
1,854.7
4,142.4
2,739.5
Commercial Services:
Phone
161.9
901.5
524.5
1,077.7
360.0
Mobile Cellular
—
—
—
—
—
Multimedia
76.2
92.7
334.2
729.9
169.5
Services-Net
99.9
34.2
94.9
108.8
222.2
Subtotal Commercial Services
338.0
1,028.4
953.6
1,916.4
751.7
Supporting Services
151.1
295.6
559.5
754.6
758.5
Subtotal for TELKOM (unconsolidated)
3,933.8
3,715.6
3,367.8
6,813.4
4,249.7
TELKOM's Subsidiaries:
Telkomsel
5,348.8
4,982.7
10,085.7
11,937.0
14,000
Dayamitra
109.5
50.4
—
41.3
21.1
Infomedia Nusantara
44.6
63.0
37.9
114.5
82.7
Pramindo Ikat Nusantara
37.4
1.7
29.4
44.5
35.2
Indonusa Telemedia
0.8
1.4
8.9
—
28.5
Graha Sarana Duta
17.0
3.7
2.4
18.0
13.0
PT Pro Infokom Indonesia
0.6
0.6
—
—
—
PT Metra (Holding)
6.1
0.9
19.3
42.0
32.5
AriaWest
0.2
0.1
1.1
87.3
175.2
Napsindo
53.8
0.3
0.5
—
—
Subtotal for subsidiaries
5,618.8
5,104.8
10,185.2
12,284.6
14,388.2
Total for TELKOM (consolidated)
9,552.6
8,820.4
13,553.0
19,098.0
18,637.9
(1)
Amounts for 2003, 2004 and 2005 are actual capital expenditures.
(2)
Amounts for 2006 are planned capital expenditures included in
    TELKOM's budget and are subject to upward or downward
    adjustment.
(3)
Amounts for 2007 are projected capital expenditures for such
    year, and actual capital expenditures may be significantly
    different from projected amounts.
Actual future capital expenditures may differ from the amounts
indicated above due to various factors, including but not
limited to the Indonesian economy, the Rupiah/US dollar and
Rupiah/Euro
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exchange rates and other applicable foreign exchange rates, the
availability of vendor or other financing on terms acceptable to
TELKOM, technical or other problems in obtaining or installing
equipment and whether TELKOM enters any new lines of business.
In particular, TELKOM's ability to make substantial future
capital expenditures will depend on whether it is successful in
implementing one or more forms of financing, including "pay
as you grow". See Item 3. "Key
Information — D. Risk Factors —
TELKOM's ability to develop adequate financing arrangements
is critical to support its capital expenditures" and
Item 4. "Information on the Company —
B. Business Overview — Business
Strategy — Reducing Cost of Capital."
Planned Investments in
2006
In 2006, TELKOM plans to make capital investments in
infrastructure, commercial services and supporting services.
Planned Investments in
Infrastructure
TELKOM's planned capital investments in infrastructure in
2006 total Rp.4,142.4 billion. This will be used for
capital investments in transmission infrastructure, which are
expected to include investments in a fiber optic transmission
network, a backbone transmission network on the island of
Kalimantan and Sulawesi and an additional ground satellite
segment in Jakarta, a submarine cable system between
Batam-Jakarta and a submarine cable system between Puger and
Denpasar. Substantial investment will also be made in expanding
access infrastructure, which includes fiber optic cable fixed
line, copper wire fixed line and CDMA wireless access networks.
For a more complete discussion of TELKOM's planned
infrastructure investments, see Item 4. "Information
on the Company — B. Business Overview —
Network Infrastructure."
Planned Investments in
Commercial Services
TELKOM also plans to spend Rp.1,916.4 billion in 2006 for
capital investments in commercial services, including:
•
capital investments in fixed line commercial services (including
    fixed wireless services), which include additional capacity,
    service enhancements and upgrades, including its value added
    services and software and mechanical and electrical systems;
•
enhancing TELKOM's multimedia network (including core
    network of IP transport, HFC and CATV services), which includes
    increases in the number of VoIP access points, Internet
    multiplexing (IMUX) systems for Internet and data access,
    Internet value added services such as B2B
e-commerce,
broadband
    access (xDsl), and improving TELKOM's HFC and CATV systems;
    and
•
investing in service-net, including the establishment of fixed
    wireless services,
e-commerce,
internet
    connectivity and value added services.
Planned Investments in
Supporting Services
TELKOM plans to spend Rp.754.6 billion in 2006 for capital
investments in supporting facilities, including:
•
investments in BTS stations to expand network coverage,
    transmission receiver (TRX) and microcells to improve its
    quality;
•
switching equipment;
•
equipment used for prepaid products
•
fiber optic transmission for the large cities in Java
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•
additional radio network capacity
•
3G roll out plan, and
•
supporting facilities consisting of buildings, R&D and
    office facilities.
Other Financing
Techniques
In common with many Indonesian state-owned enterprises, TELKOM
has historically relied on two-step loans financed by the
Government and revenue sharing with co-investors to fund
investment in property, plant and equipment. In recent years,
however, TELKOM has funded its capital investments largely
through internally generated cash flows from operating
activities and direct borrowing from commercial banks. In
addition, TELKOM has in recent years accessed the debt capital
markets for a portion of its financing needs. On July 16,
2002, TELKOM issued a fixed rate IDR Bond in the amount of
Rp.1,000 billion with maturity of five years with fixed
interest rate of 17% per annum. On December 15, 2004,
TELKOM issued unsecured medium-term notes ("MTN") in
the principal amount of Rp.1.125 trillion in four series with
interest rates ranging from 7.7% to 9.4% per annum. TELKOM is
presently in the process of exploring alternative sources of
financing for capital investment, including vendor-procured and
other bank financing, as well as other potential sources of
borrowed funds.
Revenue Sharing
Until recently, TELKOM made use of revenue-sharing arrangements
to develop fixed line networks in heavily populated urban areas
of Indonesia, public card-phone booths and its analog mobile
cellular networks. Under these revenue-sharing arrangements,
investors finance the costs incurred in procuring and installing
equipment, while TELKOM manages and operates the equipment, and
bears the cost of repairs and maintenance, after installation
and until the end of the revenue-sharing period. The investors
legally retain rights to the equipment during the
revenue-sharing period but transfer ownership to TELKOM at the
end of such period. See Item 4. "Information on the
Company — B. Business Overview —
General — Revenue Sharing Arrangements (PBHs)."
TELKOM did not fund any capital investments (other than capital
investments in fixed line telephone services and broadband
Internet services) through revenue-sharing arrangements in 2003,
2004 or 2005 and does not intend to fund any such capital
investments (other than capital investments in fixed line
telephone services) through such arrangements in the future,
except in the context of its efforts to promote the "pay as
you grow" program to fund capital investments. See
"Pay as You Grow" below. Since 2004, TELKOM has been
trying to replace existing revenue-sharing arrangements with new
partnership schemes on more favorable terms.
Pay as You Grow
The Pay as You Grow program involves arrangements in which
TELKOM and its equipment suppliers agree that a percentage of
the contract cost will be paid upfront (typically 25%) and the
balance will be paid once the lines are put into service. TELKOM
and its suppliers also agree to work together to plan and design
networks, assess capacity requirements and determine timetable
for procurement. The "pay as you grow" scheme allows
TELKOM to pay the equipment vendors based on the attainment of a
certain number of customers in the related area/facility or
within one year from completion date, whichever is earlier.
Vendors participating in this "pay as you grow" scheme
have assessed the risk of entering into such scheme and, up to
the date of this Annual Report, have only been willing to enter
into this scheme for projects that they believe have high
customer potential. Accordingly, vendors have always been paid
by TELKOM within a few months after the equipment has been
delivered. TELKOM expects that only a relatively small number of
equipment suppliers will be invited to participate in pay as you
grow programs and supply a substantial portion of TELKOM's
infrastructure and other equipment needs.
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Critical Accounting Policies, Estimates and Judgments
The preparation of TELKOM's consolidated financial
statements in conformity with Indonesian GAAP, as well as the
reconciliation to U.S. GAAP, requires TELKOM to make
estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and revenue
and expenses for the years reported. Management continually
evaluates its estimates and judgments including those related to
useful lives and carrying value of property, plant and equipment
and intangible assets, valuation allowance for receivables,
pension and other post-retirement benefits, income taxes and
legal contingencies. Management bases its estimates and
judgments on historical experience and other factors that are
believed to be reasonable under the circumstances. For a
complete discussion of the application of these and other
significant accounting policies, see Note 2 to the
Company's consolidated financial statements. Actual results
could differ from those estimates under different assumptions
and conditions. TELKOM believes that of our significant
accounting policies, the following may involve a higher degree
of judgment or complexity or are areas where assumptions and
estimates are particularly critical to the financial statements:
Allowances for Doubtful
Accounts
The allowance for doubtful accounts is the Company's best
estimate of the amount of probable credit losses in the
Company's existing accounts receivable. The Company
determines the allowance based on historical write-off
experience. The Company reviews its allowance for doubtful
accounts monthly. Past due balances over 90 days for retail
customers are fully provided, and past due balance for
non-retail customers over a specified amount are reviewed
individually for collectibility. Account balances are charged
off against the allowance after all means of collection have
been exhausted and the potential for recovery is considered
remote. The Company does not have any off-balance sheet credit
exposure related to its customers.
Carrying Amount of Property,
Plant and Equipment and Goodwill and Other Intangible
Assets
TELKOM estimates the useful lives of property, plant and
equipment and goodwill and other intangible assets in order to
determine the amount of depreciation and amortization expense to
be recorded during any reporting period. The useful lives are
estimated at the time the asset is acquired and are based on
historical experience with similar assets as well as taking into
account anticipated technological or other changes and, in the
case of rights to operate intangible assets, the remaining term
of the KSO agreement. When the carrying amount of the asset
exceeds its recoverable value due to, among others,
technological changes, significant adverse change in legal
factors or business climate, unanticipated competition, industry
changes or physical damage, the useful lives assigned to these
assets may either need to be shortened, resulting in the
recognition of increased depreciation and amortization expense
in future periods or these changes could result in the
recognition of an impairment charge to reflect the write-down in
value of the asset. TELKOM reviews these types of assets for
impairment periodically, when events or circumstances indicate
that the carrying amount may not be recoverable over the
remaining lives of the assets. Assessment of the timing and/or
the amount of such impairment is a matter of significant
judgment. In assessing impairments, TELKOM uses discounted cash
flows that take into account management's estimates of
future operations. The most important estimates that we use in
projecting our future cash flows involve our expectations of the
future prices at which our services will be charged, the number
of access lines that we will have in service and the discount
rate that is used to arrive at the discounted present value of
the projected future cash flows. The prices at which our
services are charged are subject to government regulation. The
number of access lines that we will have in service will depend
upon our ability to source sufficient, affordable financing to
build new access lines.
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Pension and Post-retirement
Benefits
We have a commitment, mainly through TELKOM's pension fund,
to pay pension and other post-retirement benefits to our
employees and former employees who reach 56 years of age.
The cost of these benefits and the present value of our pension
and other post-retirement liabilities depend on a number of
factors which we determine on an actuarial basis utilizing a
number of assumptions. The assumptions used in determining the
net periodic cost (income) for pension and post-retirement
benefits include the expected long-term rate of return on the
relevant plan's assets and the discount rate. In the case
of the post-retirement healthcare plan, the expected rate of
increase in medical costs is also used. Any changes in these
assumptions will impact the net periodic cost (income) recorded
for pension and post-retirement benefits.
TELKOM uses long-term historical actual return information and
estimated future long-term investment return information by
reference to external sources, taking into account the current
and expected asset allocations, to develop its expected rate of
return on plan assets.
At the end of each year, TELKOM determines the appropriate
discount rate, which represents the interest rate that should be
used to determine the present value of future cash flows
currently expected to be required to settle the pension and
post-retirement benefit obligations. In determining the
appropriate discount rate we considered the current yields on
high quality corporate fixed-income investments. We were not
able to identify suitable investments in Indonesia with a
corresponding maturity to the expected duration of the benefit
obligations so we have used the yield-to-maturity of Indonesian
Government Bonds at year end. At December 31, 2005,
TELKOM's discount rate was 11%. Due to the fact that there
are very limited types of high-quality debt instruments in
Indonesia coupled with the lack of ability to estimate interest
rates, TELKOM believes that the yield-to-maturity of the
Indonesian Government Bonds represents the most appropriate
discount rate to measure the present value of the benefit
obligations at year end. Changes in such rates due to changes in
the reference Indonesian Government Bonds brought about by
changing economic conditions in Indonesia and throughout the
world would affect the recognition of our pension and
post-retirement benefit obligations and as a consequence, could
materially affect our financial position and results of
operations.
The expected rate of medical cost has been determined by
comparing the historical relationship of our actual medical cost
increases with the rate of general inflation in the Indonesian
economy and health care utilization patterns. Past
experience has shown that our actual medical costs have on
average increased by a factor of 2% above the general rate of
inflation. Our projected medical cost was 12% and 9% as of
December 31, 2004 and 2005, respectively.
Assumed health care cost trends have a significant effect on the
amounts reported for the health care plan. A
one-percentage-point change in assumed health care cost trend
rates would have the following effects:
1-Percentage-
1-Percentage-
Point Increase
Point Decrease
Effect on total of service and interest cost components
159,073
(126,008
)
Effect on post-retirement benefit obligation
1,143,943
(908,400
)
Other assumptions include life expectancy of the members, the
rate of increase in compensation levels and the average
remaining years of service.
Early retirement benefits are recognized at the time TELKOM
makes a commitment to provide early retirement benefits as a
result of an offer made in order to encourage voluntary
redundancy. TELKOM is demonstrably committed to a termination
when and only when, TELKOM has a detailed formal plan for the
early retirement and such plan is without realistic possibility
of withdrawal.
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Income Taxes
Deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the
amounts of assets and liabilities recognized for financial
reporting purposes and the amounts recognized for income tax
purposes. Deferred tax liabilities are recognized for all
taxable temporary differences and deferred tax assets are
recognized for deductible temporary differences to the extent
that it is probable that taxable income will be available in
future periods against which the deductible temporary
differences can be utilized or the tax asset will be realized in
future periods.
Under Indonesian tax regulations as of the date of this Annual
Report, a dividend distributed by a company to a corporate
shareholder, that has a minimum share ownership of 25% and has
businesses other than as a holding company, is not subject to
tax whereas a capital gain on the sale of shares is subject to
tax at the normal corporate tax rate. As long as we continue to
hold our investments in our affiliated companies with a minimum
share ownership of 25% and have businesses other than as a
holding company, and dividend distributions from a company to a
corporate shareholder that meets the criteria described above
continues to be not subject to tax, we do not need to record a
deferred tax liability in respect of the undistributed earnings
of these affiliated companies.
A change in our intention to hold an investment or other facts
and circumstances may lead TELKOM to determine that we no longer
expect to realize our interest in the undistributed earnings of
the particular affiliated company in a manner which enables us
to take advantage of the zero percent tax rate applicable to
dividend distributions. Such a change in the future would
require us to recognize a deferred tax liability with a
commensurate charge to our income statement.
Deferred tax is calculated at the enacted tax rates at the
balance sheet date. If enacted tax rates changed, TELKOM would
adjust its deferred tax assets and liabilities, through the
income tax expense in the period of change, to reflect the
enacted tax rate expected to be in effect when the deferred tax
items reverse.
Legal Contingencies
As of the date of this Annual Report, we are involved in certain
legal proceedings and have accrued amounts that represent our
estimate of the probable outcome of these matters. Such
estimates of outcome are derived from consultation with outside
counsel, as well as an assessment of litigation and settlement
strategies. While we believe that our current accruals are
adequate, a future event or change in the facts and
circumstances may require us to make additional accruals that
would be charged to our income statement in the future. See
Note 51 to the consolidated financial statements and
Item 8. "Financial Information — A.
Consolidated statements and other financial
information — Material Litigation".
C.
Research and Development and Intellectual Property
TELKOM makes investments to improve its product and service
offerings. Such expenditure amounted to approximately
Rp.2.1 billion in 2003, Rp.27.8 billion in 2004 and
Rp.8.4 billion (US$0.9 million) in 2005. In 2005,
these expenditures related to video conferencing, SMS
development, CMS system, CDMA lab, measuring system and other
content development.
D.
Trend Information
A number of developments have had and may have in the future a
material impact on TELKOM's results of operations,
financial condition and capital expenditures. These developments
include:
•
upgrading of the network with soft switching technology;
•
increasing relative contribution of Telkomsel to our
    consolidated revenues;
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•
higher domestic fixed line tariffs beginning in 2004 and ability
    of Government to implement additional planned tariff increases;
•
the ability of the Government to implement regulatory changes
    regarding interconnection, access codes and licenses for 3G
    services;
•
implementation of cost-based interconnection tariff;
•
changes in foreign exchange rates and interest rates;
•
increase in the usage of high speed broadband Internet in
    Indonesia;
•
acquisition of Pramindo;
•
acquisition of AriaWest;
•
acquisition of Dayamitra
•
acquisition of KSO IV;
•
competition in the market for DLD services;
•
expansion of TELKOM's IDD services;
•
fixed wireless development and deployment; and
•
implementation of competence-based human resource management.
See Item 5. "Operating and Financial Review and
Prospects — A. Operating Results".
E.
Off-Balance Sheet Arrangements
TELKOM is party to a number of operating leases. These operating
leases relate principally to motor vehicles, computers,
circuits, towers, land and buildings. TELKOM believes some of
these operating leases are material to its business.
TELKOM has entered into a partnership agreement with Motorola,
Inc., Ericsson Radio A.B., Siemens Aktiengesellschaft (AG) and
Nokia Oyj whereby TELKOM is obligated to purchase certain
cellular equipment and services. In addition, TELKOM has entered
into agreements pursuant to which TELKOM is committed to pay for
services relating to the launch of the TELKOM-2 Satellite and
the construction of a PSTN network for each of Regional Division
II and V. For more details relating to these agreements, see
Item 10. "Additional Information — C.
Material Contracts".
Except as disclosed above, TELKOM does not have off-balance
sheet arrangements that are material.
F.
Tabular Disclosure of Contractual Obligations
The following summarizes TELKOM's contractual obligations
at December 31, 2005 and the effect such obligations are
expected to have on liquidity and cash flow in future periods:
Payments Due by Period
Less than
More than
Contractual Obligations
Total
1 year
1-3 years
3-5 years
5 years
(Rp. billion)
Short-Term
    Loans
(1)(6)
173.8
173.8
—
—
—
Long-Term
    Debts
(2)(6)
13,307.7
2,210.7
5,134.2
2,899.0
3,063.8
Capital Lease
    Obligations
(3)
251.8
16.2
46.6
74.9
114.1
Interest on Short-term Loans, Long-term Debts and Capital Lease
    Obligations
3,437.8
924.4
1,152.9
593.8
766.7
Operating
    Leases
(4)
2,815.9
474.8
946.4
543.3
851.4
Unconditional Purchase
    Obligations
(5)
6,594.5
6,594.5
—
—
—
Total
26,581.5
10,394.4
7,280.1
4,111.0
4,796.0
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(1)
Relates to liabilities under short term loans obtained from Bank
    Central Asia and Bank Niaga. See Note 20 to the
    consolidated financial statements.
(2)
See "— Liquidity and Capital
    Resources — Indebtedness" and Notes 22, 23,
    24 and 25 to the consolidated financial statements.
(3)
Relates to the leases of the repeaters used for TELKOM's
    telecommunication networks for TELKOMFlexi.
(4)
Relates primarily to leases of towers, computers, vehicles,
    land, buildings, office equipment and circuits.
(5)
Relates to commitments of TELKOM to suppliers and vendors for
    the purchase of telecommunications-related equipment and
    infrastructure.
(6)
Excludes contractually committed rate of interest.
In addition to the above contractual obligations, as of
December 31, 2005, Telkom had long-term liabilities for
pension, post-retirement health care benefits and long service
awards. Telkom expects to contribute Rp.568.8 billion to
its post-retirement health care benefits plan and
Rp.693.5 billion to its defined benefit pension plan in
2006. See Notes 42, 43, 44 and 54 to the consolidated
financial statements.
ITEM 6.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A.
Directors and Senior Management
In accordance with Indonesian law, the Company has a two-tier
board structure, consisting of a Board of Commissioners and a
Board of Directors. The executive management functions are
carried out by the Board of Directors, whose members are
comprised of the top executives of the Company, comparable to
the chief executive officer, chief financial officer and other
such officers of corporations incorporated under the laws of
many of the States in the United States of America.
Board of Commissioners
TELKOM's Articles of Association (the
"Articles"), referring to the Indonesian Company Law,
states that the principal statutory duties of the Board of
Commissioners are to supervise the policies of the Board of
Directors in the operation and management of the Company and to
give advice to the Board of Directors. In carrying out its
supervisory activities, the Board of Commissioners is
accountable to the stockholders of the Company.
The Board of Commissioners, which supervises the management of
TELKOM and the implementation of TELKOM business plan by the
Board of Directors, does not have day-to-day management
functions or authority, except in limited circumstances where
all members of the Board of Directors have been suspended for
any reason.
The current Board of Commissioners of TELKOM consists of one
President Commissioner and four Commissioners, two of whom are
independent commissioners.
Pursuant to the Articles, each Commissioner is appointed for a
term commencing from the date of the appointment by the general
meeting of stockholders until the closing of the third annual
general meeting of stockholders following the date of
appointment, without prejudice to the right of the general
meeting of stockholders to discharge a Commissioner at any time
before his or her term of office expires. If the position of a
Commissioner becomes vacant for any reason, the Articles further
provide that within 60 days of the occurrence of such
vacancy, an announcement that there will be notice for a general
meeting of stockholders must be made to nominate a successor.
Pursuant to the Articles, meetings of the Board of Commissioners
are presided over by the President Commissioner. If the
President Commissioner is absent, another member of the Board of
Commissioners chosen from the Commissioners present presides
over the meeting.
Meetings of the Board of Commissioners must be held at least
once every three months and at any other time (i) upon
request of the President Commissioner, (ii) upon request of
one-third of the members of the Board of Commissioners,
(iii) upon written request of the Board of Directors, or
(iv) upon request of a shareholder or a group of
stockholders holding at least one-tenth of the
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outstanding shares of TELKOM with valid voting rights. The
quorum for all Board of Commissioners meetings is more than
one-half of the total number of the Commissioners then
represented in person or by proxy granted to one of the other
Commissioners of TELKOM at such meeting.
Resolutions of a meeting of the Board of Commissioners shall be
by consensus. If consensus cannot be reached, it shall be by the
affirmative vote of a majority of the members of the Board of
Commissioners present or represented at the meeting. In the
event of a tie, the proposed resolution shall be deemed to have
been rejected.
The members of the Board of Commissioners as of
December 31, 2005 and May 31, 2006 were:
Age as of
Name
January 1, 2006
Title
Since
Tanri Abeng
64
President Commissioner
March 10, 2004
P. Sartono
61
Independent Commissioner
June 21, 2002
Arif Arryman
50
Independent Commissioner
June 21, 2002
Anggito Abimanyu
43
Commissioner
March 10, 2004
Gatot Trihargo
45
Commissioner
March 10, 2004
Tanri Abeng
Mr. Abeng has been President Commissioner of TELKOM since
March 10, 2004. From 1980 to 1998, Mr. Abeng served as
President Director (1980-1991) and President Commissioner
(1991-1998) of PT Multi Bintang Indonesia, Indonesia's
largest brewery. He also served as President Director of
PT Bakrie & Brothers from 1991 to 1998, was President
Commissioner of PT B.A.T. Indonesia from 1993 to 1998 and
was a Commissioner of PT Sepatu BATA from 1989 to 1998. He
was also a member of Parliament from 1993 to 1999 and was
Minister of State-Owned Enterprises from 1998 to 1999.
Mr. Abeng holds a degree from the University of Hasanudin,
a masters degree in business administration from the State
University of New York, Buffalo and has completed the Advanced
Management Program at the Claremont Graduate School in Los
Angeles.
P. Sartono
Mr. P. Sartono has been an Independent Commissioner of
TELKOM since June 21, 2002. Mr. P. Sartono became
an employee of TELKOM in 1972 and has served in various
management positions, including as Corporate Secretary from 1991
to 1995, until his retirement in 2000. During his tenure at
TELKOM, he also held various positions at Directorate General of
Post and Communications from 1972 to 1985 and served as
President Director of PT Telekomindo Primabhakti.
Mr. P. Sartono holds a degree in law from the
University of Indonesia and a Master of Management (Marketing)
degree from IPWI Jakarta and a Master of Law degree from the
Institute Business Law and Management (Sekolah Tinggi Ilmu Hukum
IBLAM) in Jakarta.
Arif Arryman
Mr. Arryman has been an Independent Commissioner of TELKOM
since June 21, 2002. In addition he has served as
Independent Commissioner of PT Bank BNI since 2001.
Previously, he served as an advisor to the Coordinating Minister
for Economy and a member of the assistance team to the Ministry
of Finance. Mr. Arryman graduated with a degree in
Industrial Engineering from Bandung Institute of Technology, a
masters degree in Engineering from Asia Institute of Technology,
Bangkok, Diploma d'Etude Approfondie from University
Paris-IX Dauphine France and a doctoral degree in Economics from
University of Paris-IX Dauphine France.
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Anggito Abimanyu
Mr. Abimanyu has been a Commissioner of TELKOM since
March 10, 2004. As of the date of this Annual Report, he is
the Head of the Agency for Research in Economics, Finance and
International Cooperation of the Ministry of Finance and has
been a member of the expert staff to the Finance Minister since
2000. Mr. Abimanyu previously served as a member of the
Board of Commissioners of Bank Lippo and of Bank Internasional
Indonesia. Mr. Abimanyu is also a lecturer in the Faculty
of Economics of Gadjah Mada University. Mr. Abimanyu holds
both a bachelor and a master degree in economics from Gadjah
Mada University, a master in science degree in International
Development from the University of Pennsylvania and a Ph.D.
degree in Environmental Economics from the University of
Pennsylvania.
Gatot Trihargo
Mr. Trihargo has been a Commissioner of TELKOM since
March 10, 2004. As of the date of this Annual Report, he
serves as a member of the Special Staff of the Ministry of
State-Owned
Enterprises. Mr. Trihargo holds a degree in accounting from
Sekolah Tinggi Akuntansi Negara, Jakarta, and a masters degree
in Accountancy and Financial Information Systems from Cleveland
State University in Ohio.
Board of Commissioners' Committees
As of the date of this Annual Report, the Board of Commissioners
has three standing committees: the Audit Committee, the Review
and Planning Committee and the Nomination and Renumeration
Committee. An Independent Commissioner chairs each committee. In
addition, external members to the Audit Committee, in order to
be considered independent under applicable Indonesian rules:
(a) must not be a member of any Indonesian registered
public accountant that has provided audit and/or
non-audit
services to
TELKOM within one year prior to his appointment to the Audit
Committee; (b) must not have been a TELKOM employee within
one year prior to his appointment to the Audit Committee;
(c) must not own, directly or indirectly, any shares in
TELKOM; and (d) must not have any business relationship
that relates to TELKOM's businesses.
As of the date of this Annual Report, the Audit Committee of the
Board of Commissioners is composed of seven members:
(i) Mr. Arif Arryman, an Independent Commissioner and
the Chairman; (ii) Mr. P. Sartono, an Independent
Commissioner; (iii) Mr. Mohammad Ghazali Latief;
(iv) Mr. Salam; (v) Mr. Dodi Syaripudin;
(vi) Mr. Sahat Pardede and (vii) Mr. Gatot
Trihargo. All of the members of the Audit Committee (except for
Mr. Arif Arryman, Mr. Sartono and Mr. Trihargo)
are independent external members and Mr. Pardede is an
accounting and financial expert. New listing rules adopted
pursuant to
Rule
10A-3
under
the Exchange Act require a foreign private issuer with
securities listed on the NYSE to have an audit committee
comprised of independent directors. The rules became effective
on July 31, 2005. Under
Rule
10A-3(c)(3),
however, foreign private issuers are exempt from the
independence requirements if (i) the home country
government or stock exchange requires the company to have an
audit committee; (ii) the audit committee is separate from
the board of directors and has members from both inside and
outside the board of directors; (iii) the audit committee
members are not elected by the management and no executive
officer of the company is a member of the audit committee;
(iv) the home country government or stock exchange has
requirements for an audit committee independent from the
management of the company and (v) the audit committee is
responsible for the appointment, retention and oversight of the
work of external auditors. TELKOM avails itself of this
exemption as set forth in its Amended Section 303A Annual
Written Affirmation, filed with the NYSE on January 12,
2006. An Audit Committee Charter (the "Charter")
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that has been adopted by the Board of Commissioners governs the
committee. The Charter outlines the committee's purpose,
function and responsibilities and specifies that the committee
is responsible for:
•
Overseeing the Company's financial reporting process on
    behalf of the Board of Commissioners. As part of its
    responsibilities, the committee will recommend to the Board of
    Commissioners, subject to shareholder approval, the selection of
    TELKOM's external auditor;
•
Discussing with TELKOM's internal and external auditors the
    overall scope and specific plans for their respective audits.
    The committee will also discuss TELKOM's consolidated
    financial statements and the adequacy of TELKOM's internal
    controls;
•
Meeting regularly with TELKOM's internal and external
    auditors, without management present, to discuss the results of
    their examinations, their evaluation of TELKOM's internal
    controls and the overall quality of TELKOM's financial
    reporting; and
•
Carrying out additional tasks that are assigned by the Board of
    Commissioners, especially on financial and accounting related
    matters.
The Review and Planning Committee was established on
August 1, 2003. The objective of this committee is to
review the company's
long-term
plans, as
well as annual business budget plans, following which
recommendations would be made by this committee to the Board of
Directors. The committee is also responsible for supervising and
monitoring the implementation of the business plans of the
company. As of the date of this Annual Report, the Review and
Planning Committee consists of nine members:
(i) Mr. Anggito Abimanyu (the Chairman);
(ii) Mr. Arif Arryman (the Vice Chairman);
(iii) Mr. Yuki Indrayadi (Secretary);
(iv) Mr. P. Sartono; (v) Mr. Kindy Syahrir;
(vi) Mr. Ario Guntoro; (vii) Mr. Adam
Wirahadi; (viii) Mrs. Widuri M. Kusumawati; and
(ix) Mr. Arman Soeriasoemantri. All of the members of
the Review and Planning Committee (except for Mr. Abimanyu,
Mr. Arryman and Mr. Sartono) are independent external
members.
On May 20, 2003, following TELKOM's 2003 Annual
General Meeting of stockholders, the Board of Commissioners
re-established
the
Nomination and Remuneration Committee. As of the date of this
Annual Report, the Nomination and Remuneration Committee is
composed of: (i) Mr. Tanri Abeng, the President
Commissioner and the Chairman; (ii) Mr. P. Sartono, an
Independent Commissioner and the Secretary; and
(iii) Mr. Gatot Trihargo, a Commissioner. The
committee was tasked with: (a) formulating selection
criteria and nomination procedures for strategic positions in
the Company based on good corporate governance principles;
(b) assisting the Board of Commissioners and consulting
with the Board of Directors in candidate selection for strategic
positions in the Company; and (c) formulating a
remuneration system for the Board of Directors based on fairness
and performance.
The Commissioners' business address is 5th Floor, Grha
Citra Caraka Building, Jalan Gatot Subroto Kav. 52, Jakarta
12710, Indonesia.
Board of Directors
The Board of Directors is comprised of one President Director
and six Directors. Directors are elected and dismissed by
stockholder resolutions at a general meeting of stockholders at
which the holder of the Series A Dwiwarna Share is present
and such holder approves the aforementioned stockholder
resolutions. In order to be eligible for election, candidates
for Director must be nominated by the holder of the
Series A Dwiwarna Share. Each Director is appointed for a
term commencing from the date of appointment by the general
meeting of stockholders until the closing of the fifth annual
general meeting of stockholders after the date of appointment,
without prejudice to the right of the general meeting of
stockholders to discharge a Director at any time before his/her
term of office expires.
The principal functions of the Board of Directors are to lead
and manage TELKOM and to control and manage TELKOM's
assets. The Board of Directors is responsible for the
day-to-day
management of
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TELKOM under the supervision of the Board of Commissioners. The
Articles provide that the Board of Directors shall consist of at
least two Directors, one of whom shall be the President Director.
The President Director, or in case of his absence, another
Director as provided for in the Articles shall have authority to
represent TELKOM and execute documents on behalf of TELKOM,
subject to the provisions of the Articles. The President
Director shall preside over meetings of the Board of Directors
or in his absence, any other member of the Board of Directors
appointed from among and by those present may preside over such
meetings.
The Articles provide that meetings of the Board of Directors may
be held whenever considered necessary upon the request of
(i) the President Director, (ii) at least
one-third
of the
members of the Board of Directors, (iii) the Board of
Commissioners, or (iv) written notice from any shareholder
or group of shareholders holding at least
one-tenth
of the
outstanding shares of TELKOM with valid voting rights. The
Articles further provide that the quorum for all Directors'
meetings is more than
one-half
of the members
of the Board of Directors present or represented in person or by
proxy granted to another Director of TELKOM in such meeting. At
Directors' meetings, each Director shall have one vote and
one additional vote for each other Director he represents as
proxy.
Resolutions of a meeting of the Board of Directors shall be by
consensus. If consensus cannot be reached, it shall be by the
affirmative vote of a majority of the members of the Board of
Directors present or represented at the meeting. In the event of
a tie, the matter shall be determined by the Chairman of the
meeting.
TELKOM has a disclosure committee comprised of 14 senior members
from various departments and chaired by the CFO. The disclosure
committee's role is to support TELKOM's management in
designing and evaluating TELKOM's disclosure controls and
procedures and participating in the disclosure process. TELKOM
formally established its disclosure committee on
February 18, 2005. Since its formal establishment, the
disclosure committee has established internal work procedures
relating to the preparation of TELKOM's annual report on
Form 20-F, and participated in the review and preparation
of TELKOM's annual report on Form 20-F. The
establishment of the disclosure committee formalized the
previous disclosure process where designated senior employees
from various departments were responsible for assisting with the
necessary disclosures.
The members of the Board of Directors as of December 31,
2005 and May 31, 2006 were:
Age as of
Name
January 1, 2006
Title
Since
Arwin Rasyid
48
President Director
June 24, 2005
Garuda Sugardo
56
Vice President Director and
Chief Operating Officer
June 24, 2005
Rinaldi Firmansyah
45
Director of Finance
March 10, 2004
Arief Yahya
44
Director of Enterprise & Wholesale
June 24, 2005
Abdul Haris
50
Director of Network & Solution
March 10, 2004
John Welly
51
Director of Human Resources
June 24, 2005
Guntur Siregar
54
Director of Consumer
June 24, 2005
Arwin Rasyid
Mr. Rasyid was appointed the President Director of TELKOM
on June 24, 2005. He previously served as Vice President
Director of PT Bank Negara Indonesia from 2003 to 2005,
President Director of Bank Danamon Indonesia from 2000 to 2003,
Vice Chairman of Badan Penyehatan Perbankan Nasional (the
Indonesian Banks Restructuring Agency) in 2000, Vice President
Director of Bank Niaga from 1998 to 1999, Assistant Vice
President of Bank of America from 1986 to 1987 as well in
various positions in Bank Niaga since 1987. Mr. Rasyid
graduated with a degree in economics from the University of
Indonesia. He also holds a Master of Arts degree in
International Economics and a Master of Business Administration
degree in International Business from University of Hawaii, USA.
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Garuda Sugardo
Mr. Sugardo was appointed the Chief Operating Officer and
Vice President Director of TELKOM on June 24, 2005. He
joined TELKOM in 1977 and has held several positions in various
departments. He previously served as Senior Consultant Marketing
in the Management Consulting Center of TELKOM, Director of
Telecommunication Service Business of TELKOM from 2002 to 2004,
Director of Operation and Technical of Indosat as well as a
number of positions in TELKOM from 1977-2000. Mr. Sugardo
graduated with a degree in Electrical Engineering from the
University of Indonesia.
Rinaldi Firmansyah
Mr. Firmansyah has been Director of Finance of TELKOM since
March 10, 2004. He previously served as Vice President
Commissioner, President Director and Director of Investment
Banking of PT Bahana Securities from 2003 to 2004, 2001 to
2003 and 1997 to 2001, respectively, and Commissioner and Head
of the Audit Committee of PT Semen Padang in 2003.
Mr. Firmansyah graduated with a degree in electrical
engineering from the Bandung Institute of Technology and a
Masters degree in business administration from the Indonesian
Institute of Management Development, Jakarta.
Mr. Firmansyah is also a Chartered Financial Analyst (CFA).
Arief Yahya
Mr. Yahya was appointed the Director of Enterprise &
Wholesale of TELKOM on June 24, 2005. He joined TELKOM in
1986 and has held several positions in various departments.
Previously, he served as TELKOM's Head of Regional Division
V (East Java). Mr. Yahya graduated with a degree in
electrical engineering from Bandung Institute of Technology and
a Masters degree in Telecommunication Engineering from
University of Surrey.
Abdul Haris
Mr. Haris was appointed the Director of Network &
Solution of TELKOM on June 24, 2005. He joined TELKOM in
1980 and has held several positions in various departments. He
previously served as Director of Telecommunications and Network
Business of TELKOM from 2004 to 2005, and as Deputy Head of
TELKOM's Regional Division II (Jakarta).
Mr. Haris has a degree in electrical engineering from North
Sumatra University and a Masters degree in business
administration from Prasetya Mulya Management Institute.
John Welly
Mr. Welly was appointed the Director of Human Resources of
TELKOM on June 24, 2005. He joined TELKOM in 1981 and has
held several positions in various departments. He previously
served as President Director of PT INTI, Director of
Operations and Marketing of TELKOM from 1998 to 2000,
Commissioner of Telkomsel in 1998, Director of Human Resources
and Support Divisions/ Senior Executive Vice President for Human
Resources and Support of TELKOM from 1995 to 1998, and
Commissioner of PT Aplikanusa Lintasarta from 1995 to 1996.
Mr. Welly graduated with a degree in Electrical Engineering
from the Bandung Institute of Technology and a Masters degree in
telecommunications and information from Essex University, UK.
See " — D. Employees — On-going
Investigations" and Item 3. "Key
Information — D. Risk Factors — Risks
relating to TELKOM and its subsidiaries — Certain
TELKOM employees, including present and former TELKOM directors,
are subject to
on-going
police investigations".
Guntur Siregar
Mr. Siregar was appointed the Director of Consumer of
TELKOM on June 24, 2005. He joined TELKOM in 1975 and has
held several positions in various departments. He previously
served as Senior Consultant Financial Management in Management
Consulting Center of TELKOM, Director of Finance of TELKOM from
2002 to 2004, Director of Commerce of Indosat from 2000 to 2002,
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Commissioner of PT Aplikanusa Limtasarta from 1996 to 2000, Head
of Regional Division II (Jakarta) from 1996 to 2000, and
Head of Regional Division I (Sumatera) from 1995 to 1996.
Mr. Siregar graduated with a degree in Electrical
Engineering from the Bandung Institute of Technology. See
" — D. Employees — On-going
Investigations" and Item 3. "Key
Information — D. Risk Factors — Risks
relating to TELKOM and its subsidiaries — Certain
TELKOM employees, including present and former TELKOM directors,
are subject to
on-going
police investigations".
None of the Directors has a service contract with the Company
nor are any such contracts proposed. The Directors'
business address is Jalan Japati, 1, Bandung 40133, Indonesia.
None of the Directors or Commissioners are related to one
another.
B.     Compensation
Each Commissioner is granted a monthly honorarium and certain
other allowances and is paid an annual bonus if TELKOM surpasses
certain financial and operating targets, the amounts of which
are determined by the stockholders at the general meeting of
stockholders. Each Commissioner also receives a lump-sum bonus
paid at the end of the Commissioner's term pursuant to an
MoF letter which 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 (tantiem)
if TELKOM surpasses certain financial and operating targets, the
amounts of which are determined by the stockholders at the
general meeting of the stockholders. 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 stockholders. 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
benefits, such
as housing, car and driver. For the year ended December 31,
2005, the aggregate compensation paid by TELKOM and its
consolidated subsidiaries to all of their Commissioners and
Directors was Rp.71.9 billion (US$7.3 million), while
the amount paid by TELKOM (unconsolidated) to all its
Commissioners and Directors was approximately
Rp.28.96 billion (US$2.9 million), in each case
including bonuses and the cost of benefits provided to
Directors, such as housing facilities.
The Company and its subsidiaries provide honoraria and
facilities to support the operational duties of the Board of
Commissioners. The total of such benefits amounted to
Rp.14.0 billion, Rp.22.7 billion and
Rp.19.7 billion in 2003, 2004 and 2005, respectively, which
reflected 0.1%, 0.1% and 0.1% of total operating expenses in
2003, 2004 and 2005, respectively.
The Company and its subsidiaries provide salaries and facilities
to support the operational duties of the Board of Directors. The
total of such benefits amounted to Rp.45.6 billion,
Rp.50.3 billion and Rp.52.1 billion in 2003, 2004 and
2005, respectively, which reflected 0.3%, 0.3% and 0.2% of total
operating expenses in 2003, 2004 and 2005, respectively.
C.     Board practices
Individual Directors are charged with specific 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 absent 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 stockholders to elect a
new Board of Directors within 60 days.
The Board of Directors is required to obtain the written
approval of the Board of Commissioners for the following
actions: (i) buying or selling the shares of listed
companies in excess of the amount stipulated by the Board of
Commissioners; (ii) participating in or disposing of other
capital investments; (iii) establishing, transferring its
interests in or dissolving subsidiaries; (iv) transferring,
trading, disposing or acquiring any business segments;
(v) entering into licensing agreements, management
contracts or similar agreements with other entities;
(vi) selling or otherwise disposing of fixed assets in
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excess of the amount stipulated by the Board of Commissioners;
(vii) ceasing to collect or writing off bad debts from the
Company's books or inventory in excess of the amount
stipulated by the Board of Commissioners; (viii) binding
the Company as surety in excess of the amount stipulated by the
Board of Commissioners; and (ix) assuming or granting
medium 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 10% or more of the
Company's revenues or 20% or more of stockholders'
equity or such other amount as specified in Indonesian capital
market regulations must be authorized by the stockholders at the
general meeting of stockholders. In the performance of its
duties, the Board of Directors must act in the interests of the
Company.
The Articles provide that members of the Board of Directors are
prohibited from assuming the following: (i) a position as
director of another state-owned corporation or private
companies, (ii) any position within the structural or
functional department of the central or district government, or
(iii) other positions outside TELKOM which may directly or
indirectly raise conflicts of interest with TELKOM and/or which
violate the provisions of applicable laws and regulations. The
Articles further provide that if members of the Board of
Directors wish to assume any other position not prohibited above
or wish to obtain an exemption from the foregoing prohibitions,
such Director would require permission from the Board of
Commissioners. In addition, such appointment shall be
reported to the general meeting of stockholders.
In addition, the Articles prohibit a Director with conflicting
interests representing TELKOM in the issues causing such
conflict of interest. In such cases, TELKOM shall be represented
by another member of the Board of Directors with the consent of
the Commissioners. In the event that TELKOM faces a conflict of
interest with all members of its Board of Directors, TELKOM
shall be represented by the Board of Commissioners or a member
of the Board of Commissioners chosen by the Commissioners in the
issues causing such conflict.
Each Director is appointed for a term commencing from the date
of appointment by the general meeting of stockholders until the
closing of the fifth annual general meeting of stockholders
after the date of appointment, without prejudice to the right of
the general meeting of stockholders to discharge a Director at
any time before his/her term of office expires. For further
information on the composition and terms of the Board of
Directors, see Item 6. "Directors, Senior Management
and Employees — A. Directors and Senior
Management — Board of Directors".
None of the Directors or Commissioners has any substantial
interest, direct or indirect, in any company carrying on a
similar trade as TELKOM.
D.     Employees
As of December 31, 2005, TELKOM and its subsidiaries had
34,004 employees in total, of which 28,179 were employed by
TELKOM, and 5,825 were employed by TELKOM's subsidiaries.
As of December 31, 2004, TELKOM and its subsidiaries had
34,657 employees in total, of which 29,375 were employed by
TELKOM, and 5,282 were employed by TELKOM's subsidiaries.
As of December 31, 2003, TELKOM and its subsidiaries had
35,204 employees in total, of which 30,820 were employed by
TELKOM, and 4,384 were employed by TELKOM's subsidiaries.
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The table below sets forth a breakdown of TELKOM's
employees by position as at December 31, 2005:
TELKOM regions as at
KSO regions VII as at
TELKOM's subsidiaries as at
December 31, 2005
December 31, 2005
December 31, 2005
Senior management
148
0
38
Middle management
2,095
82
316
Supervisors
8,605
839
1,011
Others
14,118
2,292
4,460
Total
24,966
3,213
5,825
TELKOM's 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 partner 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 benefits,
including a pension plan and a post-retirement health care plan,
medical benefits for themselves and certain members of their
immediate family, housing allowance, other allowances and
certain other benefits, 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 five
years, the size of the annual bonus pool has ranged from
Rp.114.8 billion to Rp.304.4 billion. In 2005, bonuses
were paid by TELKOM to all employees including TELKOM's
employees in KSO and Non-KSO divisions. 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 staff level for each
Division are then determined.
Except in connection with its initial public offering in 1995,
TELKOM does not maintain an employee share scheme for any of its
employees or senior management.
TELKOM's mandatory retirement age for all employees is 56.
TELKOM sponsors a defined benefit pension plan and a defined
contribution pension plan. The defined benefit pension plan is
for permanent employees hired prior to July 1, 2002. The
amount of the pension entitlement under the defined benefit
pension plan is based on the employee's years of service
and salary level upon retirement and is transferable to
dependents upon the employee's death. The main sources of
pension fund are the contributions from the employees and
TELKOM. The participating employees contribute 18% of basic
salary (prior to March 2003 the employee contribution rate was
8.4%) and TELKOM contributes the remaining amount required to
fund the plan. TELKOM's contributions to the pension fund
were Rp.486.3 billion, Rp.845.7 billion and
Rp.698.5 million (US$71.1 million), for the years
ended December 31, 2003, 2004 and 2005, respectively. See
Note 42 to the consolidated financial statements.
Effective January 1, 2003, TELKOM (a) increased the
minimum pension benefit for retired employee to approximately
Rp.425,000 per month and (b) increased pension benefits for
employees who retired prior to August 1, 2000 by 50%.
Current employees who effectively retired on or after
July 1, 2002 receive an increase of monthly pension benefit
amounting to twice the amount of their basic monthly salary.
This policy applied to employees who retired at the normal
pension age of 56.
The defined contribution plan is provided for employees hired
with permanent status on or after July 1, 2002. The plan is
managed by a financial institution pension fund (Dana Pensiun
Lembaga Keuangan). The Company's annual contribution to the
defined contribution plan is determined based on a certain
percentage of the participants' salaries and amounted to
Rp.399 million and Rp.971 million in 2004 and 2005,
respectively.
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The Company's employees are entitled to receive certain
cash awards based on length of services and after completing
certain years of services which are either paid at the time the
employee reaches a certain anniversary date or upon retirement
or at the time of termination if the employee has met the
required number of years of service.
TELKOM also provides
post-retirement
healthcare benefits for all of its retired employees, including
their immediate family. There are two types of funding for
post-retirement
healthcare benefits: (i) for employees hired before
November 1, 1995 who retired prior to June 3, 1995 or
who have 20 years of service for those retired after
June 3, 1995, such benefits are funded by the TELKOM
Healthcare Foundation; (ii) for employees hired before
November 1, 1995 who retire with years of service of less
than 20 years; and for employees hired after
November 1, 1995, such benefits will be granted in the form
of an insurance allowance by TELKOM. TELKOM's contributions
(including contributions paid by all KSO units) to the plan for
employees hired before November 1, 1995 who retired prior
to June 3, 1995, and who have had 20 years of service
when they retired after June 3, 1995 were
Rp.188.5 billion, Rp.724.5 billion and
Rp.435.9 billion (US$44.3 million), for the years
ended December 31, 2003, 2004 and 2005, respectively.
In May 2000, TELKOM employees formed a union named "Serikat
Karyawan TELKOM" or "SEKAR". The formation of
SEKAR is in accordance with the Presidential Decree No. 83
of 1998 regarding ratification of ILO Convention No. 87 of
1948 concerning the freedom to form a union and the protection
of the right to form an organization. Membership with SEKAR is
not compulsory. TELKOM believes that its relations with SEKAR
are good. However, there can be no assurance that the activities
of employee unions will not materially and adversely affect
TELKOM's business, financial condition and prospects.
On-going
Investigations
There are on-going investigations by the West Java Police
Department as to the conduct of TELKOM's Director of Human
Resources Development, TELKOM's Director of Consumer, and
several other TELKOM employees (including one former TELKOM
director and one former President Director of Napsindo). As the
details of the investigations have not been made public, TELKOM
does not know the full nature or extent of the investigations or
the matters to which they relate, or whether any charges are
likely to be filed. Based on press reports, TELKOM understands
that the investigations relate principally to an alleged
violation of anti-corruption law regarding (i) the
retention by TELKOM of a consultant and an alleged overpayment
without compliance with proper procedures; and (ii) the
alleged provision of interconnection services to Napsindo
(TELKOM's subsidiary) and Globalcom (a Malaysian company)
at an incorrect tariff, and alleged use by Napsindo/ Globalcom
of TELKOM's network for the provision of illegal VoIP
services. It is also understood that one of the investigations
relates to TELKOM's guarantee of a bank loan obtained by
Napsindo. To TELKOM's knowledge, no charges have been filed
against any of the persons investigated by the West Java Police
Department, although several of them (but not our Director of
Consumer) were held in custody in West Java pending completion
of the investigations. On May 10, 2006, those individuals
were released from police custody because the police were unable
to find any incriminating evidence to support the alleged
charges during the 120-day period they were held. 120 days
is the maximum period allowed for police custody of suspects for
investigation purposes. However, the investigation is ongoing.
There can be no assurance that the police will not find evidence
of wrong-doing, that charges will not be filed in relation to
the foregoing or that such persons or other TELKOM employees
will not be found guilty of any offence. Although TELKOM
believes that the investigations are without merit, to the
extent any of such persons are in custody, or are found guilty
of any offence, TELKOM is and would be deprived of their
services. In addition, TELKOM does not believe that there are
any financial ramifications for TELKOM as a result of the
investigations. See Item 3. "Key
Information — D. Risk Factors — Certain
TELKOM employees, including present and former TELKOM directors,
are subject to
on-going
police investigations"
.
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E.     Share ownership
All the directors and commissioners individually beneficially
own less than one percent of the shares of the Company and their
respective beneficial share ownership in the Company has not
been disclosed to stockholders or otherwise made public.
ITEM 7.     MAJOR STOCKHOLDERS AND
RELATED PARTY TRANSACTIONS
A.     Major stockholders
General
The following table sets forth certain information as of
December 31, 2005 with respect to (1) persons known to
the Company to be the owner of more than 5% of the
Company's Common Stock (whether directly or beneficially
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
10,320,470,711
51.19%
Series B
JPMCB US Resident (Norbax Inc.)
1,992,333,765
9.88%
Series B
The Bank of New York (BoNY)
1,291,002,696
6.41%
Series B
Board of Directors and Commissioners
78,332
<0.01%
As of December 31, 2005, a total of 37,414,543 American
Depositary Shares ("ADSs") and 20,159,999,279
Series B shares (including the Series B shares
represented by these ADSs) and one Series A Dwiwarna share
were outstanding.
The Government holds a majority of the outstanding Series B
shares of TELKOM. In addition, the Government is the holder of
the Series A Dwiwarna share, which has special voting
rights. See Item 7. "Major Stockholders and Related
Party Transactions — Relationship with the
Government — Government as Shareholder."
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 stockholders. 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 Series A 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 effective control of these
matters even if it were to beneficially own less than a majority
of the outstanding shares of Common Stock.
TELKOM's total number of shares immediately prior to its
Initial Public Offering was 8,400,000,000, which consisted of
8,399,999,999 Series B shares and 1 Series A Dwiwarna
share, all of which were owned by the Government. On
November 14, 1995, the Government sold some of its TELKOM
shares through an initial public offering on the Jakarta Stock
Exchange and Surabaya Stock Exchange. The shares offered
consisted of 933,333,000 new Series B shares and
233,334,000 Series B shares owned by the Government. The
Government also conducted a global share offering listed on the
New York Stock Exchange and the London Stock Exchange for
700 million Series B shares owned
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by the State of the Republic of Indonesia, which were converted
into 35 million ADSs. Each ADS represented 20 Series B
shares at that time.
In December 1996, the Government completed a block sale of
388 million Series B shares. In 1997, the Government
distributed 2,670,300 Series B shares as an incentive to
stockholders who did not sell their shares within one year from
the date of the initial public offering.
In May 1999, the Government completed another block sale of
898 million Series B shares.
Under Law No. 1/1995 on Limited Liability Companies, the
minimum total par value of TELKOM's issued share capital
has to be at least 25% of the total par value of TELKOM's
authorized share capital, or in TELKOM'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 share capital by way of capitalization of
certain additional paid-in capital. The bonus shares were
distributed to the then existing stockholders in August 1999.
In December 2001, the Government conducted another
block-sale
of
1,200 million shares (or 11.90% of the total outstanding
Series B shares).
On July 16, 2002, the Government sold 312 million
Series B shares (3.1% of the Series B shares) through
an accelerated placement of TELKOM's shares to
institutional investors in Indonesia and globally at Rp.3,635
per share.
At TELKOM's Annual General Meeting of Shareholders in July
2004, the shareholders approved the split of nominal value of
the Series A Dwiwarna share and Series B Shares of the
Company from Rp.500 per share to Rp.250 per share. The number of
authorized shares increased from 40,000,000,000 shares to
80,000,000,000 shares while the number of outstanding shares as
of such date increased from 10,079,999,640 shares to
20,159,999,280 shares. As a result of the split of the nominal
value, the previous one Series A Dwiwarna Share became two
shares with the following criteria: (i) one Series A
Dwiwarna share was preserved as a Series A Dwiwarna share
owned by the Government with a nominal value of Rp.250 per share
and (ii) the other share was issued as one Series B
Share owned by the Government.
At TELKOM's Extraordinary General Meeting of Shareholders
on December 21, 2005, the shareholders approved a share
repurchase plan, pursuant to which TELKOM may repurchase up to a
maximum of 5% of issued and outstanding Series B Shares for
a total repurchase amount not exceeding Rp.5.25 trillion, in
accordance with the rules and regulations of Badan Pengawas
Pasar Modal dan Lembaga Keuangan ("BAPEPAM") and the
stock exchanges on which TELKOM shares and ADSs are trading, as
well as other applicable regulatory bodies. Such repurchases are
intended to be made from time to time over the eighteen month
period following the announcement. Repurchases may be made at
the discretion of the Company's management through
purchases of shares on the Jakarta and Surabaya Stock Exchanges,
purchase of shares in ADS form on the New York Stock Exchange,
off-exchange
transactions and agreements, or any other legal means the
Company deems appropriate.
Through its share repurchase plan, TELKOM intends to achieve
(i) greater flexibility in managing its capital;
(ii) lower its overall cost of financing and improve its
Earnings Per Share, Earnings Per ADS and Return on Equity and
(iii) flexibility to undertake share repurchases at any
time during the period the approval is in force.
TELKOM has appointed Morgan Stanley Services Limited as the
agent and PT. Danareksa Securities as the local broker for
the share repurchase.
Pursuant to the share repurchase plan, as of June 2, 2006,
TELKOM has cumulatively repurchased an aggregate of 8,373,500
Series B shares on either the Jakarta Stock Exchange or the
New York Stock Exchange, representing less than 0.05% of the
total issued and outstanding Series B shares of
20,159,999,279 for a total repurchase amount of
Rp.61.4 billion (US$6.2 million).
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Relationship with the Government
Government as
Shareholder
As of December 31, 2005, the Government held approximately
51.19% of TELKOM's Common Stock and the Series A share
(the "Dwiwarna Share"), which carries special voting
rights. As its largest shareholder, the Government is interested
in TELKOM's performance both in terms of the benefits it
provides to the nation as well as its ability to operate on a
commercial basis. The material rights and restrictions that are
applicable to the Common Stock are also applicable to the
Dwiwarna Share, except that the Government may not transfer the
Dwiwarna Share and as the holder of the Dwiwarna Share has a
veto with respect to (i) the nomination, election and
removal of Directors; (ii) the nomination, election and
removal of Commissioners; (iii) the issuance of new shares;
and (iv) amendments to the Articles, including actions to
merge or dissolve TELKOM, increase or decrease its authorized
capital, or reduce its subscribed capital. Accordingly, the
Government will have effective control of these matters even if
it were to beneficially own less than a majority of the
outstanding shares of Common Stock. 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 Dwiwarna
Share.
It is the policy of the Company not to enter into transactions
with affiliates 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 unaffiliated third party. The State Minister of
State-owned
Enterprise
("SMSOE") has advised the Company that the 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.
The SMSOE has adopted a similar policy.
Under regulations of BAPEPAM, Indonesia's capital markets
and financial institution supervisory agency, because the
Company is listed on Indonesia's stock exchanges, any
transaction in which there is a conflict of interest (as defined
below) must be approved by a majority of the holders of shares
of Common Stock who do not have a conflict of interest in the
proposed transaction, unless the conflict existed before the
Company was listed and was fully disclosed in the offering
documents. A conflict of interest is defined in BAPEPAM
regulations to mean the difference between the economic
interests of the Company and its stockholders, on the one hand
and the personal economic interests of the members of the board
of commissioners, board of directors or principal stockholders
(a holder of 20% or more of the issued shares) and their
respective affiliates jointly or separately on the other. A
conflict of interest also exists when members of the board of
commissioners, board of directors or a principal shareholder of
the Company or their respective affiliates is involved in a
transaction in which their personal interests may be in conflict
with the interest of the Company. BAPEPAM has powers to enforce
this rule; stockholders of the Company may also be entitled to
seek enforcement or bring enforcement action based on
this rule.
Transactions between TELKOM and other state-owned or controlled
enterprises could constitute "conflict of interest"
transactions under the BAPEPAM regulations and the approval of
disinterested stockholders would have to be obtained if a
conflict of interest were to exist. TELKOM believes that many
transactions conducted with state-owned or controlled
enterprises in the ordinary course of their businesses and
TELKOM's business are on an arms-length, commercial basis
and do not constitute "conflict of interest"
transactions for which a disinterested stockholder vote would be
required. Such transactions might include the sale by TELKOM of
telephone services to state-owned or controlled enterprises or
the purchase by TELKOM of electricity from a state-owned
enterprise. Moreover, the BAPEPAM regulations do not require
TELKOM to obtain disinterested shareholder approval of any
transaction, the principal terms of which were disclosed in the
Indonesian prospectus for the Initial Public Offering. TELKOM
expects, however, in light of the substantial presence of
enterprises owned or controlled by the Government, through the
MoF, SMSOE, or one of its or their affiliates have in Indonesia,
it may be desirable, in connection with the development and
growth of TELKOM's business,
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for TELKOM to enter into joint ventures, arrangements or
transactions with such enterprises from time to time. Under such
circumstances, TELKOM may seek to consult BAPEPAM in determining
whether the proposed joint venture, arrangement or transaction
would require a vote of disinterested stockholders under the
terms of the BAPEPAM regulations. If BAPEPAM were of the view
that the proposed joint venture, arrangement or transaction
would not require a vote of disinterested stockholders under its
regulations, TELKOM would proceed without seeking disinterested
stockholders approval. If, however, BAPEPAM were to take the
position that the proposal would require a vote of disinterested
stockholders under its rule, TELKOM would either seek to obtain
the requisite disinterested stockholder approval or abandon the
proposal.
Government as
Regulator
The Government regulates the telecommunications sector through
the MoCI. In particular, the MoCI has authority to issue decrees
implementing laws, which are typically broad in scope, thereby
giving the Ministry considerable latitude in implementing and
enforcing regulatory policy. Pursuant to such decrees, the MoCI
defines the industry structure, determines the tariff formula,
determines TELKOM's USO obligations and otherwise controls
many factors that may affect TELKOM's competitive position,
operations and financial condition. Through the DGPT, the
Government regulates frequency and bandwidth allocation and
TELKOM must obtain a license from the DGPT for each of its
services as well as the utilization of frequency and bandwidths.
The Company and other operators are also required to pay radio
frequency usage fees. Telkomsel also holds several licenses
issued by the MoCI (or previously issued by the MoC) for the
provision of its cellular services and from the Indonesian
Investment Coordinating Board relating to investment by
Telkomsel for the development of cellular phone line services
with national coverage, including the expansion of its network
coverage. The Government, through the MoCI as regulator, has the
power to grant new licenses for the establishment of new joint
ventures and other arrangements, particularly in the
telecommunications sector.
The Company and its subsidiaries pay concession fees for
telecommunication services provided and radio frequency usage
charges to the MoCI. Concession fees amounted to
Rp.239.0 billion, Rp.314.7 billion and
Rp.558.5 billion (US$56.8 million) in 2003, 2004 and
2005, respectively. Concession fees accounted for 1.6%, 1.6% and
2.3% of total operating expenses in 2003, 2004 and 2005,
respectively. Radio frequency usage charges amounted to
Rp.371.7 billion, Rp.492.6 billion and
Rp.548.2 billion (US$55.8 million) in 2003, 2004 and
2005, respectively. Radio frequency usage charges accounted for
2.5%, 2.5% and 2.2% of total operating expenses in 2003, 2004
and 2005, respectively. Beginning in 2005, the Company and its
subsidiaries pay Universal Service Obligation ("USO")
charges to the MoCI, which for 2005, amounted to
Rp.307.7 billion (US$31.3 million), reflecting 1.2% of
total operating expenses in 2005.
Government as Lender
As of December 31, 2005, the Government had sub-loaned
borrowings from foreign lenders to TELKOM as "two-step
loans" amounting to Rp.5,329.5 billion
(US$542.2 million), including current maturities. TELKOM is
obligated to pay to the Government interest and principal
repayment that is subsequently remitted by the Government to the
respective lenders. At the end of December 2005, foreign
currency loans represented 66.3% of the outstanding total of
such loans. The remaining 33.7% of such outstanding loans is
denominated in Rupiah. In 2005, the annual interest rates
charged on loans repayable in Rupiah range from 8.3% to 10.7%,
on those repayable in U.S. Dollar range from 4.0% to 6.8%,
and on the loan repayable in Japanese Yen is 3.1%. See
Item 5. "Operating and Financial Review and
Prospects — B. Liquidity and Capital
Resources — Indebtedness".
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,
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however, deals with the various departments and agencies of the
Government as separate customers and the provision of services
to any single department or agency does not constitute a
material part of TELKOM's revenues. The Government and
government agencies are treated for tariff purposes in respect
to its connection charges and monthly charges as
"residential", which rates are lower than the business
service rates. This special treatment does not apply to the
tariff for local, long distance and IDD calls.
Other
Proportion of securities of
TELKOM held in Indonesia and outside Indonesia
As of December 31, 2005, 14,018 persons, including the
Government, were registered as holders of 20,159,999,279
Series B shares of TELKOM's Common Stock in Indonesia.
There were a total of 37,414,543 ADSs held by
149 registered holders as of December 31, 2005. The
ADSs are traded on the NYSE and the LSE.
Change in Control
There are no arrangements which are known to the Company which
may result in a change in control to the Company.
B.     Related party transactions
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 45 to the Company's
consolidated financial statements. The most significant of these
transactions include:
Indosat
At the time TELKOM acquired Pramindo in August 2002, a 13% of
the issued and paid up share capital of Pramindo was owned by
Indosat, a company that, at that time, was majority owned and
controlled by our major shareholder, the Government of
Indonesia. Since December 20, 2002, Indosat has been
controlled by Singapore Technologies Telemedia Pte. Ltd. TELKOM
still considers Indosat as a related party because the
Government can exert significant influence over the financial
and operating policies of Indosat by virtue of its right to
appoint one director and one commissioner of Indosat.
Following the merger of Indosat, PT Indosat Multimedia
Mobile ("IM3"), Satelindo and PT Bimagraha
Telekomindo on November 20, 2003, with Indosat as the
surviving entity, all the rights and obligations of Satelindo
and IM3 arising from their agreements with TELKOM and Telkomsel,
as the case may be, were transferred to or assumed
by Indosat.
The Company has an agreement with Indosat for the provision of
international telecommunication services to the public. The
principal matters covered by the agreement are as follows:
•
The Company provides a local network for 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 Telecommunication
    of the Republic of Indonesia. The international
    telecommunication services include telephone, telex, telegram,
    package switched data network, television, teleprinter,
    Alternate Voice/Data Telecommunication (AVD), hotline and
    teleconferencing. The Company receives compensation for the
    services, based on the interconnection tariff determined by the
    Minister of Communications of the Republic of Indonesia;
•
The Company has also entered into an interconnection agreement
    between the Company's PSTN network and Indosat's
    cellular network in connection with the implementation of Indosat
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Multimedia Mobile services and the settlement of the related
    interconnection rights and obligations; and
•
The Company's compensation relating to leased lines/
    channel services, such as International Broadcasting System, AVD
    and bill printing is calculated at 15% of Indosat's
    revenues from such services. Indosat also leased circuits from
    the Company to link Jakarta, Medan and Surabaya through
year-end
2003.
In 1994, the Company transferred to Satelindo (now Indosat) the
right to use a parcel of Company-owned land located in Jakarta
that had been previously leased to PT Telekomindo
Primabhakti. 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.43.0 billion to the Company for the thirty-year right.
Satelindo paid Rp.17.2 billion in 1994 and the remaining
Rp.25.8 billion was not paid because the Utilization Right
("Hak Pengelolaan Lahan") on the land could not be
delivered as provided in the transfer agreement. In 2000,
the Company and Satelindo agreed on an alternative solution by
accounting for the above payment as lease expense up to 2006.
In 2001, Satelindo paid an additional amount of
Rp.59.9 billion as lease expense up to 2024.
Telkomsel also entered into an agreement with Indosat for the
provision of international telecommunication services to GSM
mobile cellular customers. The principal matters covered by the
agreement are as follows:
•
Telkomsel's GSM mobile cellular telecommunication network
    is connected with Indosat's international gateway exchanges
    to make outgoing or receive incoming international calls through
    Indosat's international gateway exchanges;
•
Telkomsel receives as compensation for the interconnection, a
    specific percentage of Indosat's revenues from the related
    services made through Indosat's international gateway
    exchanges;
•
Billings for international calls made by Telkomsel's
    customers of GSM mobile cellular telecommunication are handled
    by Telkomsel. Telkomsel is obliged to pay Indosat's share
    of revenue regardless whether billings to customers have been
    collected; and
•
The agreement dated March 29, 1996, was initially valid for
    one year, but extendable as agreed by both parties. The latest
    amended agreement is valid until March 2008, but extendable
    as agreed by both parties. Pending negotiations on a new
    agreement, Telkomsel and Indosat have entered into an interim
    agreement with terms similar to those set forth above. Under the
    terms of the interim agreement, Telkomsel will receive 27% of
    the applicable tariff for outgoing international calls from
    Telkomsel subscribers and Rp.800 per minute for incoming
    international calls to Telkomsel subscribers. The interim
    agreement became effective on March 1, 2004 and continues
    until such date that Telkomsel and Indosat enter into a new
    agreement.
Telkomsel also has an agreement for the usage of Indosat's
telecommunication facilities. The agreement, which was made in
1997, is valid for eleven years and subject to change based on
an annual review and agreement by both parties. The charges for
the usage of the facilities amounted to Rp.17.9 billion,
Rp.19.1 billion and Rp.19.1 billion
(US$1.9 million) in 2003, 2004 and 2005, respectively, or
0.1%, 0.1% and 0.1% of total operating expenses in 2003, 2004
and 2005, respectively.
Other agreements between Telkomsel and Indosat are as follows:
Agreement on Construction and Maintenance for the
    Jakarta-Surabaya Cable System
("J-S
Cable System")
Telkomsel, Lintasarta, Satelindo and Indosat entered into the
Construction and Maintenance for
J-S
Cable System
Agreement. The parties formed a management committee consisting
of a chairman and a representative of each party, to direct the
construction and operation of the cable system. The construction
of the cable system was completed in 1998. Based on the
agreement, Telkomsel shared
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19.325% of the total construction cost. Operation and
maintenance costs are shared based on an agreed formula.
Telkomsel's share in operation and maintenance costs
amounted to Rp.1.4 billion, Rp.2.1 billion and
Rp.1.2 billion (US$0.1 million) in 2003, 2004 and
2005, respectively.
Indefeasible Right of Use
Agreement
On September 21, 2000, Telkomsel entered into an agreement
with Indosat for the use of SEA — ME — WE 3
and tail link in Jakarta and Medan. Based on the agreement,
Telkomsel was granted an indefeasible right to use certain
capacity of the network commencing from September 21, 2000
to 2015 by prepaying compensation amounting to
US$2.7 million. In addition to the prepayment, Telkomsel is
also charged annual operation and maintenance costs amounting to
US$0.1 million.
Interconnection Revenues
The Company and its subsidiaries earned net interconnection
revenues from Indosat (including Satelindo and IM3 before their
merger with Indosat) of Rp.235.7 billion in 2003,
representing 0.9% of total operating revenues in 2003. The
Company and its subsidiaries were charged net interconnection
charges from Indosat of Rp.158.3 billion and
Rp.52.8 billion (US$5.4 million) in 2004 and 2005,
respectively, representing 0.5% and 0.1%, of total operating
revenues in 2004 and 2005, respectively.
Leased Lines
The Company provides leased lines to Indosat and its
subsidiaries, namely Indosat Mega Media and Lintasarta. The
leased lines can be used by those companies for telephone,
telegraph, data, telex, facsimile or other telecommunication
services. Revenue earned from these transactions amounted to
Rp.43.6 billion, Rp.109.8 billion, and
Rp.126.4 billion (US$12.9 million) in 2003, 2004 and
2005, respectively, representing 0.2%, 0.3% and 0.3% of total
operating revenues in 2003, 2004 and 2005, respectively.
Satellite Transponder Lease
Lintasarta utilizes the Company's satellite transponders or
frequency channels. Revenue earned from these transactions
amounted to Rp.23.7 billion, Rp.14.5 billion and
Rp.8.1 billion (US$0.8 million) in 2003, 2004 and
2005, respectively, representing 0.1%, less than 0.1% and less
than 0.1% of total operating revenues in 2003, 2004 and 2005,
respectively.
Data communication network
Telkomsel has an agreement with Lintasarta and PT Artajasa
Pembayaran Elektronis ("Artajasa") for the usage of
data communication network system. The charges from Lintasarta
and Artajasa for the services amounted to Rp.11.0 billion,
Rp.21.4 billion and Rp.23.1 billion
(US$2.4 million) in 2003, 2004 and 2005, respectively,
representing 0.1%, 0.1% and 0.1% of total operating expenses in
2003, 2004 and 2005, respectively.
Agreement with Government
agencies and associated companies
The Company provides telecommunication services to Government
agencies.
The Company has entered into agreements with Government agencies
and associated companies, namely, CSM, KSO VII, and Patrakom,
for utilization of the Company's satellite transponders or
frequency channels. Revenues earned from these transactions
amounted to Rp.73.2 billion, Rp.51.0 billion and
Rp.66.8 billion (US$6.8 million) in 2003, 2004 and
2005, respectively, representing 0.3%, 0.2% and 0.2% of total
operating revenues in 2003, 2004 and 2005, respectively.
The Company provides leased lines to other license operators
such as CSM, Patrakom and PSN. The leased lines can be used by
these companies for telephone, telegraph, data, telex, facsimile
or other
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telecommunication services. Revenue earned from these
transactions amounted to Rp.44.7 billion,
Rp.25.7 billion and Rp.30.7 billion
(US$3.1 million) in 2003, 2004 and 2005, respectively,
which was 0.2%, 0.1% and 0.1% of total operating revenues in
2003, 2004 and 2005, respectively.
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 ("PT INTI"), Lembaga
Elektronika Nasional, PT Adhi Karya, PT Pembangunan
Perumahan, PT Nindya Karya, PT Boma Bisma Indra,
PT Wijaya Karya, PT Waskita Karya and PT Gratika,
which are all state-owned companies, and Koperasi Pegawai
Telkom, a related party cooperative. Purchases made from these
related parties amounted to Rp.127.0 billion,
Rp.268.9 billion and Rp.337.7 billion
(US$34.3 million) in 2003, 2004 and 2005, respectively,
representing 1.1%, 2.4% and 2.5% of total fixed assets purchases
in 2003, 2004 and 2005 respectively.
PT INTI is also a major contractor and supplier providing
equipment, including construction and installation services, for
Telkomsel. Total purchases from PT INTI in 2003, 2004 and
2005 amounted to Rp.52.3 billion, Rp.217.7 billion and
Rp.67.6 billion (US$6.9 million), respectively,
representing 0.5%, 1.9% and 0.5% of total fixed assets purchases
in 2003, 2004 and 2005, respectively.
Telkomsel has an agreement with PSN for lease of PSN's
transmission link. Based on the agreement, which was made on
March 14, 2001, the minimum lease period is 2 years
since the operation of the transmission link and is extendable
subject to agreement by both parties. The lease charges amounted
to Rp.40.5 billion, Rp.49.7 billion and
Rp.95.2 billion (US$9.7 million) in 2003, 2004 and
2005, respectively, representing 0.3%, 0.3% and 0.4% of total
operating expenses in 2003, 2004 and 2005, respectively.
The Company and its subsidiaries carry insurance (on their
property, plant and equipment against property losses, inventory
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
Rp.159.5 billion, Rp.148.3 billion and
Rp.58.3 billion (US$5.9 million) in 2003, 2004 and
2005, respectively, representing 1.1%, 0.8% and 0.2% of total
operating expenses in 2003, 2004 and 2005, respectively.
The Company and its subsidiaries maintain current accounts and
time deposits in several state-owned banks. In addition, some of
those banks are appointed as collecting agents for the Company.
Total placements in form of current accounts and time deposits,
and mutual funds in state-owned banks amounted to
Rp.2,116.0 billion and Rp.3,315.4 billion
(US$337.3 million) as of December 31, 2004 and 2005,
respectively, representing 3.8% and 5.3% of total assets as of
December 31, 2004 and 2005, respectively. Interest income
recognized during 2003, 2004 and 2005 was Rp.274.0 billion,
Rp.150.4 billion and Rp.124.0 billion
(US$12.6 million), representing 74.9%, 47.3% and 36.0% of
total interest income, respectively.
The Company's subsidiaries have loans from a state-owned
bank. Interest expense on the loans for 2004 and 2005 amounted
to Rp.9.1 billion and Rp.5.1 billion
(US$0.5 million), representing 0.7% and 0.4% of total
interest expense in 2004 and 2005, respectively.
The Company (a) leases buildings, (b) purchases
materials and construction services and (c) utilizes
maintenance and cleaning services from Dana Pensiun Telkom and
PT Sandhy Putra Makmur, a subsidiary of Yayasan Sandikara
Putra Telkom (a foundation managed by Dharma Wanita
Telkom). Total charges from these transactions amounted to
Rp.32.8 billion, Rp.24.9 billion and
Rp.39.1 billion (US$4.0 million) in 2003, 2004 and
2005, respectively, representing 0.2%, 0.1% and 0.2% of total
operating expenses in 2003, 2004 and 2005, respectively.
The Company purchased encoded phone cards from Perusahaan Umum
Percetakan Uang Republik Indonesia, a state-owned company. The
cost of the phone cards amounted to Rp.7.7 billion, nil and
nil in 2003, 2004 and 2005, respectively, representing 0.05%, 0%
and 0% of total operating expenses for 2003, 2004 and 2005,
respectively.
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The Company and its subsidiaries earned (were charged)
interconnection revenues (charges) from PSN of
Rp.19.0 million, Rp.(5.5) million and Rp.1.1 million
(US$0.1 million) in 2003, 2004 and 2005, respectively,
representing 0.1%, (0.02)% and less than 0.01% of total
operating revenues in 2003, 2004 and 2005, respectively.
In addition to revenues earned under the KSO Agreements, the
Company also earned income from building rental, repairs and
maintenance services and training services provided to the KSO
Units, amounting to Rp.23.1 billion, Rp.18.4 billion
and Rp.26.8 billion (US$2.7 million) in 2003, 2004 and
2005, respectively, representing 0.1%, 0.1% and 0.1% of total
operating revenues in 2003, 2004 and 2005, respectively.
The Company has a revenue-sharing arrangement with Koperasi
Pegawai Telkom ("Kopegtel"). Kopegtel's share in
the revenues from these arrangements amounted to
Rp.20.6 billion and Rp.31.9 billion
(US$3.2 million) in 2004 and 2005, respectively,
representing 0.1% and 0.1% of total operating revenues in 2004
and 2005, respectively.
Telkomsel has operating lease agreements with Patrakom and CSM
for the usage of their transmission link for a period of three
years, subject to extensions. The lease charges amounted to
Rp.25.0 billion and Rp.123.9 billion in 2004 and 2005,
respectively, representing 0.1% and 0.5% of total operating
expenses in 2004 and 2005, respectively.
Kisel is a cooperative that was established by Telkomsel's
employees to provide car rental services, printing and
distribution of customer bills, collection and other services,
principally servicing Telkomsel
.
For Kisel's
services, Telkomsel paid Rp.109.5 billion and
Rp.78.7 billion in 2004 and 2005, respectively. Telkomsel
also has dealership agreements with Kisel for distribution of
SIM cards and pulse reload vouchers. Total SIM cards and pulse
reload vouchers sold to Kisel amounted to Rp.816.6 billion
and Rp.1,158.6 billion in 2004 and 2005, respectively.
Infomedia provides electronic media and call center services to
KSO Unit VII based on an agreement dated March 4,
2003. Revenue earned from these transactions in 2004 and 2005
amounted to Rp.5.5 billion and Rp.9.2 billion
(US$0.9 million), respectively, or 0.02% and 0.02% of total
operating revenues in 2004 and 2005, respectively.
The Company provides a defined benefit pension plan and a
post-retirement health care plan for its pensioners through Dana
Pensiun Telkom and Yayasan Kesehatan Pegawai Telkom. See
Notes 42 and 44 to the consolidated financial statements in
Item 18.
The Company has also seconded a number of its employees to
related parties to assist them in operating their business. In
addition, the Company provides certain of its related parties
with the right to use its buildings free of charge.
C.     Interest of experts and
counsel
Not applicable.
ITEM 8.     FINANCIAL INFORMATION
A.     Consolidated statements and
other financial information
See Item 18. "Consolidated Financial Statements,"
which is incorporated herein by reference.
Material Litigation
Commissions for Business
Competition Watch (Komisi Pengawas Persaingan Usaha)
("KPPU")
On August 13, 2004, the KPPU issued its verdict in
Commission Court, which determined that the Company had breached
several articles of Law No. 5/1999 on Anti Monopolistic
Practices and Unfair Business Competition ("Competition
Law"). In addition, KPPU also indicated that the Company
should allow Warung Telkom ("kiosks") to channel
international calls to other international call
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operators, and abolish the clause in agreements between the
Company and Warung Telkom providers which limit Warung Telkom to
sell telecommunication services of other operators. The Company
filed an appeal to the Bandung District Court which on
December 7, 2004 issued its verdicts in favor of the
Company. On January 4, 2005, KPPU filed an appeal to the
Indonesian Supreme Court. The Company does not believe that
these proceedings presently pending will have a material adverse
effect on the Company's consolidated financial position,
results of operations or liquidity.
B.     Significant changes
On May 13, 2004, TELKOM received its commercial license to
provide IDD fixed line services. On June 7, 2004, TELKOM
began offering IDD fixed line services to customers under the
brand name "TIC 007."
See the important disclosures regarding changes in the
regulations governing the Indonesian telecommunications industry
in Item 4. "Information on the Company — B.
Business Overview — Regulations".
See Note 53 to the Company's consolidated financial
statements in Item 18 for information relating to material
subsequent events occurring after December 31, 2005.
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ITEM 9.     THE OFFER AND LISTING
A.     Offer 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)
2001
3,400
1,825
First Quarter
3,150
1,775
Second Quarter
3,200
2,175
Third Quarter
3,525
2,650
Fourth Quarter
3,250
2,425
2002
First Quarter
4,300
2,825
Second Quarter
4,725
3,700
Third Quarter
3,900
3,125
Fourth Quarter
4,000
2,350
2003
First Quarter
3,725
3,225
Second Quarter
4,950
3,650
Third Quarter
6,000
4,125
Fourth Quarter
6,750
5,650
2004
First Quarter
4,025
3,300
Second Quarter
4,350
3,300
Third Quarter
4,225
3,650
Fourth Quarter
5,200
4,175
2005
First Quarter
5,125
4,300
Second Quarter
5,350
4,175
Third Quarter
5,800
4,775
Fourth Quarter
6,150
4,925
October
5,400
5,000
November
5,500
4,925
December
6,150
5,450
2006
January
6,550
6,050
February
6,400
5,950
March
7,000
6,200
April
7,750
6,900
May
8,400
7,050
*
On October 1, 2004, TELKOM effected a two-for-one split of
    its Common Stock from Rp.500 par value per share to Rp.250 par
    value per share as resolved in the AGMS on July 30, 2004.
    The price per share reflects this split for all periods shown.
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On December 29, 2005 (the last trading day in 2005 on the
JSX), the closing price for a share of Common Stock was Rp.5,900.
The table below sets forth, for the periods indicated, the
reported high and low quoted prices of the ADSs on the NYSE and
LSE.
ADS PRICE INFORMATION
Price per ADS
Price per ADS
(NYSE)
(LSE)
Calendar Year
High
Low
High
Low
(in US Dollars)
(in US Dollars)
2001
First Quarter
6.7
4.0
6.5
3.9
Second Quarter
5.6
3.7
5.6
3.8
Third Quarter
7.1
5.5
7.1
5.5
Fourth Quarter
5.8
4.7
6.1
4.8
2002
First Quarter
8.6
5.5
8.6
5.5
Second Quarter
9.8
8.4
9.8
8.4
Third Quarter
8.7
7.0
8.7
7.1
Fourth Quarter
8.9
5.6
8.9
5.3
2003
First Quarter
8.44
7.30
8.53
7.27
Second Quarter
12.09
8.19
11.78
8.33
Third Quarter
13.73
9.85
13.90
9.60
Fourth Quarter
16.42
13.13
16.05
13.40
2004
First Quarter
19.45
15.13
18.97
15.29
Second Quarter
19.91
14.13
20.27
14.08
Third Quarter
18.55
15.81
19.00
15.73
Fourth Quarter
23.33
18.30
23.21
19.37
2005
First Quarter
21.96
18.11
21.86
18.17
Second Quarter
21.96
16.85
21.99
16.88
Third Quarter
23.66
18.10
29.76
17.97
Fourth Quarter
25.50
19.81
25.47
19.71
October
21.35
19.81
20.76
19.78
November
22.08
19.82
20.45
19.71
December
25.50
22.21
25.47
22.05
2006
January
27.75
24.65
27.29
23.78
February
28.00
26.05
27.86
26.73
March
31.51
26.38
31.38
26.62
April
35.19
30.46
35.11
30.76
May
38.28
28.86
38.35
30.60
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On December 31, 2005, the closing price for an ADS was
US$23.86 on the NYSE and US$23.78 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
40 shares of Common Stock, are listed on the New York Stock
Exchange ("NYSE") and the London Stock Exchange
("LSE"). TELKOM's Common Stock has also been
publicly offered without listing in Japan.
The Indonesian Securities Market
As of the date of this Annual Report, there are two stock
exchanges in Indonesia. The primary market is the JSX located in
Jakarta 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.801.25
trillion at year end 2005 as compared to Rp.695.56 trillion for
the SSX. Total trading value on the JSX during 2005 was
Rp.406.01 trillion, compared with Rp.5.29 trillion on the SSX.
Overview of the JSX
As of December 31, 2005, the JSX comprised of 122 members.
Trading rules on the JSX are, at present, generated in the form
of decisions by the JSX. There are currently two daily trading
sessions for regular market and negotiated market from Monday to
Thursday, a morning session from 9.30 a.m. to 12.00 noon,
followed by an afternoon session from 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. There is only one cash market trading session
from Monday to Thursday, 9.30 a.m. to 12.00 noon, and on
Friday, 9.30 a.m. to 11.30 a.m.
Trading of securities is divided into three market segments:
regular market, negotiated market and cash market (except for
right issues which may only be traded in the cash and negotiated
markets). The regular market is the mechanism for trading stock
in standard lots on a continuous auction market during exchange
hours. Regular market and cash market trading is generally
carried out in unit lots of 500 shares. The price movements:
•
for shares with previous price under Rp.500, in multiples of
    Rp.5 and each price movement should be no more than Rp.50;
•
for shares with previous price between the range of Rp.500 up to
    Rp.2,000, in multiples of Rp.10 and each price movement should
    be no more than Rp.100;
•
for shares with previous price between the range of Rp.2,000 up
    to Rp.5,000, in multiples of Rp.25 and each price movement
    should be no more than Rp.250; and
•
for shares with previous price between the range of Rp.5,000 or
    more, in multiples of Rp.50 and each price movement should be no
    more than Rp.500.
Auctioning takes place according to price priority and time
priority. Price priority refers to the giving of priority to
buying orders at a higher price or selling orders at a lower
price. If buying or selling orders are placed at the same price,
priority is given to the buying or selling order placed first
(i.e. time priority).
The negotiated market trading is carried out by (i) direct
negotiation between members of JSX or (ii) between clients
through one member of JSX or (iii) between client and
member of JSX or
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(iv) between member of JSX with Kustodi Penjaminan Efek
Indonesia (Indonesian Clearing Guarantee Corporation)
("KPEI"). The negotiated market trading does not use
round lots.
Transactions on the JSX regular market are required to be
settled no later than the third trading day after the
transactions except for cross trading. Transactions on the
negotiated market are settled based on agreement between the
selling exchange member and the buying exchange member, and are
settled per transaction. Transactions on the JSX cash market are
required to be settled on the trading day of the transactions.
In case of a default by an exchange member on settlement, cash
market trading takes place, pursuant to which trading of
securities by means of direct negotiation on cash and carry
terms will be conducted. All cash market transactions must be
reported to the JSX. An exchange member is obliged to pay a
transaction cost as regulated by the JSX, delay in payment of
the transaction cost will be subject to a fine of 1.0% of the
outstanding amount for each day of delay. For any violation on
JSX rules, JSX may impose to exchange member sanctions:
(i) fine up to Rp.500 million; (ii) a written
warning; (iii) suspension; or (iv) revocation of
license as an exchange member.
All transactions involving shares listed only on the JSX which
use the services of brokers must be conducted through the JSX.
In order for a trade (except a block trade) to be made on the
JSX, both the cash and securities settlement must be conducted
through the facilities of the JSX. Engaging in short selling is
prohibited under the applicable regulations. Furthermore, the
JSX may cancel a transaction if proof exists of fraud, market
manipulation or the use of insider information. The JSX may also
suspend trading if there are indications of fraudulent
transactions or artificial inflation of share prices, misleading
information, use of insider information, counterfeit securities
or securities blocked from trading, or any other material event.
The JSX may suspend trading of certain securities or suspend
certain members of the stock exchange. For transactions
involving shares listed on both the JSX and the SSX, either
exchange may be used to effect the trade.
Members of the JSX charge a brokerage fee for their services,
based on agreement with their client, up to a maximum of 1.0% of
the transaction value. When conducting share transactions on the
JSX, exchange members are required to pay a transaction cost in
the amount of 0.03% of the transaction value (for transactions
in the regular and cash markets) and a transaction cost in the
amount of 0.03% of the transaction value or based on the
exchange policy (for transactions in the negotiated markets).
The transaction cost is minimum Rp.2 million per month as
contribution for the provision of stock exchange's
facilities (which continues to apply for stock exchange members
in suspension). The clients are also responsible for paying a
10.0% value added tax on the amount of brokerage fee and
transaction cost. Also, Indonesian sellers are required to pay a
withholding tax of 0.1% (0.6% for founder shares) of the total
transaction value. Additionally, stamp duty of Rp.3,000 is
payable on any transaction with a value between Rp.250,000 and
Rp.1,000,000 and stamp duty of Rp.6,000 is payable on every
transaction with a value of more than Rp.1,000,000.
Shareholders or their appointees may request at any time during
working hours, the issuer or a securities administration bureau
appointed by the issuer of such shares to register their shares
in the issuer's registry of shareholders. Reporting of
share ownership to BAPEPAM is mandatory for shareholders whose
ownership has reached 5.0% or more of issued and fully paid up
capital, upon meeting such share ownership level or upon changes
of such ownership.
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 40 shares of Common
Stock. As of December 31, 2005, 37,414,543 ADSs were
outstanding in either the New York Stock Exchange or London
Stock Exchange and there were 149 registered holders of ADSs.
D.     Selling Stockholders
Not applicable.
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Table of Contents
E.     Dilution
Not applicable.
F.     Expenses of the issue
Not applicable.
ITEM 10.     ADDITIONAL
INFORMATION
A.     Share capital
Not applicable.
B.     Memorandum and articles of
association
The Company's articles of association
("Articles") have been registered with the Ministry of
Justice in accordance with the Limited Liability Company Law
No. 1 Year 1995 ("Indonesian Company Law")
and was announced by Ministerial Decree number
C2-7468.HT.01.04.TH.97
year
1997. According to article 3, the objectives and purposes
of the Company are to operate telecommunications networks and
provide telecommunications and information services.
In accordance with Indonesian company law, TELKOM 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. See
Item 6. "Directors, Senior Management and
Employees — A. Directors and Senior Management."
The Articles state that any transaction involving a conflict of
interest between the Company and its directors, commissioners
and stockholders should be approved by a stockholders meeting,
in which approval is required from a majority of independent
stockholders.
Each director also receives an annual bonus and other incentives
if TELKOM surpasses certain financial and operating targets, the
amounts of which are determined by the stockholders at the
general meeting of stockholders. 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 stockholders.
Each commissioner is granted a monthly honorarium and certain
other allowances and is paid an annual bonus if TELKOM surpasses
certain financial operating targets, the amounts of which are
determined by the stockholders at the general meeting of
stockholders. Each commissioner also receives a lump sum bonus
paid at the end of the commissioner's term pursuant to a
letter of the Ministry of Finance which applies to all
state-owned companies. No fees are paid to the Commissioners or
Directors for attendance at their respective board meetings.
The Board of Directors are tasked with the responsibility of
leading and managing the Company in accordance with its
objectives and purposes and to control, preserve and manage the
assets of the Company. Within such broad scope of
responsibility, the Board of Directors are authorized to cause
the Company to borrow such sums as it may require from time to
time subject to the limitations set forth in the Articles. The
borrowing powers of the Board of Directors may only be varied
through an amendment to the Articles.
The Articles do not contain any requirement for (i) the
directors to retire by a specified age, or (ii) the
directors to own any or a specified number of shares of the
Company. The rights, preferences and restrictions attaching to
each class of the shares of the Company in respect of specified
matters are set forth below:
•
dividend rights
. Dividends are to be paid based upon the
    financial condition of TELKOM and in accordance with the
    resolution of the stockholders in a general meeting, which will
    also determine the form of and time for payment of the dividend;
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•
voting rights
. The holder of each voting share is
    entitled to one vote at a general meeting of stockholders;
•
rights to share in the Company's profits
. See
    dividend rights;
•
rights to share in any surplus in the event of
    liquidation
. Stockholders are entitled to surplus in the
    event of liquidation in accordance with their proportion of
    shareholding, provided the nominal value of the Common Stock
    that they hold is fully paid-up;
•
redemption provisions
. There are no stock redemption
    provisions in the Articles. However, based on Article 30 of
    Indonesian Company Law, TELKOM may buy back at the maximum 10%
    of its issued shares;
•
reserved fund provisions
. Retained earnings up to a
    minimum of 20% of the issued capital of the Company is to be set
    aside to cover potential losses suffered by the Company. If the
    amount in the reserved fund exceeds 20% of the issued capital of
    the Company, general meeting of stockholders may authorize the
    Company to utilize such excess funds as dividends;
•
liability to further capital calls
. Stockholders of the
    Company may be asked to subscribe for new shares in the Company
    from time to time. Such right is to be offered to stockholders
    prior to being offered to third parties and may be transferred
    at the option of the shareholder. The Board of Directors of the
    Company is authorized to offer the new shares to third parties
    in the event that the existing shareholder is unable or
    unwilling to subscribe for such new shares; and
•
provisions discriminating against any existing or prospective
    holder of such securities as a result of such shareholder owning
    a substantial number of shares
. The Articles do not contain
    any such provision.
In order to change the rights of holders of stock, an amendment
to the relevant provisions of the Articles would be required.
Any amendment to the Articles requires the approval of the
holder of the Series A Dwiwarna share and two thirds of the
holders of the Series B shares present at a general
meeting. Such meeting must also be attended by the holder of the
Series A Dwiwarna share.
General meetings of stockholders may only be convened upon the
issuance of the requisite notice by the Company. The notice is
to be published in at least 2 newspapers having general
circulation within Indonesia, one of which must be in Indonesian
and the other in English. The notice period for convening annual
general meetings and extraordinary general meetings is
21 days (not including the date the meeting was called and
the date of the meeting) and 14 days (not including the
date the meeting was called and the date of the meeting)
respectively. The quorum for the general meeting is stockholders
representing more than 50% of the outstanding share capital of
the Company. In the event that quorum is not achieved, another
meeting is to be held, which meeting does not require the issue
of a notice. At the second meeting, the quorum for the meeting
is stockholders representing one third of the outstanding share
capital of the Company. In the event that quorum is not achieved
at the second meeting, a third meeting may be held, the quorum
for which shall be determined by the Head of the District Court
that has a judicial jurisdiction over TELKOM. Stockholders may
vote by proxy. All resolutions are to be passed by consensus. If
consensus cannot be reached, resolutions are passed by simple
majority, unless a larger majority is required by the Articles.
The Articles do not contain any limitations on the right of any
person, to own shares of the Company. Indonesian capital market
regulations do not contain any limitation on the right of any
person, whether local or foreign, to own shares in a company
listed on an Indonesian stock exchange.
Any takeover of the Company is required to be approved by the
holder of the Series A Dwiwarna share and a majority
constituting 75% of the holders of the Series B shares at a
general meeting of stockholders that must be attended by the
holder of the Series A Dwiwarna share. There are no other
provisions in the Articles that would have the effect of
delaying, deferring or preventing a change in control of the
Company.
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Each director and commissioner has an obligation to report to
BAPEPAM with regard to their ownership and the changes of their
ownership in the Company and this obligation also applies to
stockholders who have an ownership of 5% or more in the paid up
capital of the Company. TELKOM believes that the Articles are
not significantly different from those generally prevailing in
Indonesia in respect of public companies listed on an Indonesian
stock exchange. TELKOM also believes that the provisions in the
Articles relating to changes in the capital of TELKOM are not
more stringent than that required by Indonesian law.
Summary of significant differences between Indonesian
corporate governance practices and the NYSE's corporate
governance standards
The following sets forth a brief, general summary of significant
differences between the corporate governance practices followed
by Indonesian companies, such as TELKOM, and those required by
the listing standards of the New York Stock Exchange (the
"NYSE") of U.S. companies that have common stock
listed on the NYSE. The NYSE listing standards are available on
the NYSE's website at http://www.nyse.com.
Overview of Indonesian
law
Indonesian public companies are required to observe and comply
with certain good corporate governance practices. The
requirements and the standards for good corporate governance
practices for public companies are mainly embodied in the
following regulations: Law No. 1 of 1995 on Limited
Liability Companies ("Company Law"); the Law
No. 8 of 1995 on Capital Market ("Capital Market
Law"); the Regulations of the Indonesian Capital Market
Supervisory Board ("BAPEPAM Regulations"); and the
rules issued by the Indonesian stock exchanges, namely Jakarta
Stock Exchange ("JSX") and Surabaya Stock Exchange
("SSX"). In addition to the above statutory
requirements, the articles of association ("Articles")
of public companies commonly incorporate provisions directing
the corporate governance practices in such companies.
Similar to the laws of the United States, Indonesian laws
require public companies to observe and comply with standards of
corporate governance practices that are more stringent than
those applied to privately-owned companies. It should be noted
that in Indonesia, the term "public company" does not
necessarily refer to a company whose shares are listed on a
securities exchange. Under the Capital Market Law, a non-listed
company may be deemed a public company, and subjected to the
laws and regulations governing public companies, if such company
meets or exceeds the capital and shareholder requirements
applicable to a publicly-listed company.
In 2000, the Government established the National Committee on
Corporate Governance ("NCGI"), an informal committee
that was tasked with formulating good corporate governance
standards for Indonesian companies. As a result, the NCGI
formulated the Code for Good Corporate Governance
("Code") which recommended setting more stringent
corporate governance standards for Indonesian companies, such as
the appointment of independent audit and compensation committees
by the Boards of Commissioners, as well as increasing the scope
of Indonesian companies' disclosure obligations. Although
the NCGI recommended that the Code be adopted by the Government
as a basis for legal reform, as of the date of this Annual
Report the Government has not enacted regulations that fully
implement the provisions of the Code. For example, while public
companies such as TELKOM are now required to have independent
audit committees, they are not yet required to have independent
compensation committees. Accordingly, many of the Code's
provisions have not been implemented by Indonesian companies.
Composition of Board of
Directors; Independence
The NYSE listing standards provide that the board of directors
of a U.S. listed company must consist of a majority of
independent directors and that certain committees must consist
solely of
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independent directors. A director qualifies as independent only
if the board affirmatively determines that the director has no
material relationship with the company, either directly or
indirectly.
Unlike companies incorporated in the United States, the
management of an Indonesian company consists of two organs of
equal stature, the Board of Commissioners ("BoC") and
the Board of Directors ("BoD"). Generally, the BoD is
responsible for the day-to-day business activities of the
company and is authorized to act for and on behalf of the
company, while the BoC has the authority and responsibility to
supervise the BoD and is statutorily mandated to provide advice
to the BoD.
With regard to the BoC, the Company Law requires a public
company's BoC to have at least two members. Although the
Company Law is silent as to the composition of the BoC, Listing
Regulation No. 1A issued by the JSX states that at
least 30% of the members of the BoC of a public company (such as
TELKOM) must be independent.
As to the BoD, the Company Law states that the BoD has the
authority to manage the daily operation of the company and must
have at least two members, each of whom must meet the minimum
qualification requirements set forth in the Company Law. Given
the difference between the role of the members of the BoD in an
Indonesian company and that of their counterparts in a
U.S. company, Indonesian law does not require that certain
members of the BoD must be independent and neither does it
require the creation of certain committees composed entirely of
independent directors.
Committees
The NYSE listing standards require that a U.S. listed
company must have an audit committee, a nominating/corporate
governance committee and a compensation committee. Each of these
committees must consist solely of independent directors and must
have a written charter that addresses certain matters specified
in the listing standards.
The Company Law does not require Indonesian public companies to
form any of the committees described in the NYSE listing
standards. However, Listing Regulation No. 1A issued
by the JSX does require the BoC of a listed public company (such
as TELKOM) to form committees that will oversee the
company's audit process (which committee must be headed by
an independent member of the BoC).
TELKOM has an audit committee composed of seven members: two
independent commissioners, four members who are not affiliated
with TELKOM and a
non-independent
commissioner with no right to vote as he is affiliated with the
Government. New listing rules adopted pursuant to
Rule
10A-3
under
the Exchange Act requires a foreign private issuer with
securities listed on the NYSE to have an audit committee
comprised of independent directors. The rules became effective
on July 31, 2005. Under
Rule
10A-3(c)(3),
however, foreign private issuers are exempt from the
independence requirements if (i) the home country
government or stock exchange requires the company to have an
audit committee; (ii) the audit committee is separate from
the board of directors and has members from both inside and
outside the board of directors; (iii) the audit committee
members are not elected by the management and no executive
officer of the company is a member of the audit committee;
(iv) the home country government or stock exchange has
requirements for an audit committee independent from the
management of the company; and (v) the audit committee is
responsible for the appointment, retention and oversight of the
work of external auditors. TELKOM avails itself of this
exemption as set forth in its Amended Section 303A Annual
Written Affirmation, filed with the NYSE on January 12,
2006. The NYSE listing standards and the charter of
TELKOM's audit committee share the goal of establishing a
system for overseeing the company's accounting that is
independent from management and of ensuring the auditor's
independence. However, unlike the requirements set forth in the
NYSE listing standards, TELKOM's audit committee does not
have direct responsibility for the appointment, compensation and
retention of TELKOM's external auditor. TELKOM's audit
committee can only recommend the appointment of the external
auditor to the BoC, and the BoC's decision is subject to
shareholder approval. For more information, see Item 6.
"Directors, Senior Management and Employees — A.
Directors and Senior Managers — Board of
Commissioners' Committees."
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TELKOM's BoC also
re-established
TELKOM's nomination and remuneration committee on
May 20, 2003. The committee was tasked with formulating:
(a) selection criteria and nomination procedures for
Commissioners and Directors; and (b) a compensation system
for Commissioners and Directors for the 2003 fiscal year. In
accordance with its mandate from the BoC, the committee
delivered its report regarding its activities during the 2004
Annual General Meeting of TELKOM's stockholders.
For more information on TELKOM's BoC committees, see
Item 6. "Directors, Senior Management and
Employees — A. Directors and Senior
Managers — Board of Commissioners'
Committees."
Disclosure regarding
corporate governance
The NYSE listing standards require U.S. companies to adopt,
and post on their websites, a set of corporate governance
guidelines. The guidelines must address, among other things:
director qualification standards, director responsibilities,
director access to management and independent advisers, director
compensation, director orientation and continuing education,
management succession, and an annual performance evaluation
itself. In addition, the CEO of a U.S. company must certify
to the NYSE annually that he or she is not aware of any
violations by the company of the NYSE's corporate
governance listing standards. The certification must be
disclosed in the company's annual report to shareholders.
There are no disclosure requirements in Indonesian law similar
to the NYSE listing standards described above. However, the
Capital Market Law generally requires Indonesian public
companies to disclose certain types of information to
shareholders and to BAPEPAM, particularly information relating
to changes in the public company's shareholdings and
material facts that may affect the decision of shareholders to
maintain their share ownership in such public company.
Code of Business Conduct and
Ethics
The NYSE listing standards require each U.S. listed company
to adopt, and post on its website, a code of business conduct
and ethics for its directors, officers and employees. There is
no similar requirement under Indonesian law. However, companies
that are required to submit periodic reports to the SEC,
including TELKOM, must disclose in their Annual Reports whether
they have adopted a code of ethics for their senior financial
officers. Although the requirements as to the contents of the
code of ethics under SEC rules are not identical to those set
forth in the NYSE listing standards, there are significant
similarities. Under SEC rules, the code of ethics must be
designed to promote: (a) honest and ethical conduct,
including the handling of conflicts of interest between personal
and professional relationships; (b) full, fair, accurate
and timely disclosure in reports and documents filed with or
submitted to the SEC; (c) compliance with applicable laws
and regulations; (d) prompt internal reporting of
violations of the code; and (e) accountability for
adherence to the code. Furthermore, shareholders must be given
access to physical or electronic copies of the code. See
Item 16B. "Code of Ethics."
C.     Material contracts
Acquisition of Pramindo
Pursuant to a Conditional Sale and Purchase Agreement dated
April 19, 2002, TELKOM agreed to acquire 100% of its KSO
partner in Regional Division I, Pramindo and obtained management
control over Pramindo. Upon the closing of the agreement on
August 15, 2002, TELKOM acquired a 30% interest in
Pramindo. In September 2003, TELKOM acquired a further 15% of
the shares of Pramindo. The total purchase price for 100% of
Pramindo was US$384.4 million. Of this amount,
US$95.4 million was paid in August and September of 2002,
with TELKOM acquiring full control over Pramindo. The balance of
the purchase price was payable in ten unequal quarterly
installments from September 2002 through December 2004. Under
the agreement, TELKOM also agreed to repay loans to the
International Finance Corporation amounting to
US$86.2 million.
On January 28, 2004, TELKOM signed a
short-term
loan
agreement with ABN AMRO Bank N.V. Jakarta in the amount of
approximately US$130 million and on March 15, 2004,
TELKOM used the loan
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proceeds to repurchase the remaining outstanding promissory
notes that TELKOM had issued as consideration for the purchase
of Pramindo's shares. This allowed TELKOM to accelerate the
purchase of the remaining 55% of Pramindo that it did not yet
own and, as of the date of this Annual Report, TELKOM owns 100%
of Pramindo.
Acquisition of AriaWest
On July 31, 2003, TELKOM acquired 100% of the shares of its
KSO partner for Regional Division III, AriaWest, for an
aggregate consideration of US$38.67 million in cash
(US$20 million of which was paid when the purchase
agreement was signed on May 8, 2002 and the remaining
US$18.67 million was paid on July 31, 2003) and
US$109.1 million in promissory notes. The promissory notes,
which are
interest-free,
are
payable in 10
semi-annual
installments. At the same time, in consideration of the release
of AriaWest's outstanding obligations to its lenders,
TELKOM also repaid approximately US$99 million of
AriaWest's debt (on behalf of AriaWest) and entered into a
new loan agreement for approximately US$197 million with
AriaWest's lenders, which was fully prepaid in December
2004. TELKOM and AriaWest also entered into a settlement
agreement pursuant to which TELKOM and AriaWest irrevocably
settled, discharged and released claims and counterclaims in
their ICC arbitration proceeding and TELKOM agreed to pay a
settlement amount of US$20 million.
Interconnection Agreement with Indosat
On September 23, 2005, TELKOM signed an Interconnection
Agreement with PT Indosat, Tbk. This agreement provides for
the interconnection (i) of TELKOM's local fixed line
network with Indosat's
long-distance
fixed
line network; (ii) of Indosat's local fixed line
network with TELKOM's
long-distance
fixed
line network; (iii) between TELKOM's and
Indosat's
long-distance
fixed
line networks; (iv) of TELKOM's domestic fixed line
network with Indosat's international fixed line network;
and (v) Indosat's local fixed line network with
TELKOM's international fixed line network, with the
interconnection tariff being calculated on a
call-by-call
basis.
This agreement replaces previous interconnection agreements with
Indosat, namely (i) Interconnection Agreement and the
Settlement of Interconnection Financial Rights and Obligations
No. PKS
162/HK81OPSAR-00/2002
—
26/DNI/HK720/02 dated September 3, 2002 as has been amended
with Addendum No. PKS
56/HK.810/JAR-30/2005
—
065/100-ICO/REL/2005
dated March 31, 2005, to the limit of the provisions
regulating on interlocal interconnection; (ii) Agreement on
the Performance of Telecommunications Services
No.
63/HK.800/UTA-00/97
—
092/DRU.HK.720/97 dated August 21, 1997; and
(iii) Interconnection Agreement
No.
64/HK.81OPSAR-00/97
—
1000/NDN/HK.720/97 dated August 21, 1997.
On December 1, 2005, TELKOM and Indosat entered into
another interconnection agreement enabling each party's
customers to make domestic calls between Indosat's mobile
network and TELKOM's fixed line network and allowing
Indosat's mobile customers to access TELKOM's IDD
service by dialing "007". This agreement overrides
those existing interconnection agreements relating to
TELKOM's fixed line network and Indosat's mobile
network. This agreement is valid for three years from its
execution date, and thereafter, may be amended upon agreement by
both parties.
Contract with Orbital Sciences Corporation
On October 24, 2002, TELKOM signed a contract with Orbital
Sciences Corporation, a U.S. company which develops and
manufactures affordable space systems for commercial, civil
government and military customers, to develop the
TELKOM-2
satellite, a
geosynchronous communication satellite based on Orbital's
STAR-2
platform. The
contract has been amended on several occasions. Under the First
Amendment dated December 15, 2003, the total fixed cost
payable by TELKOM was US$73 million, which was fully paid
by TELKOM in July 2005. Pursuant to the Fifth Amendment dated
August 30, 2005, TELKOM agreed to pay US$148,215 to Orbital
Sciences Corporation to extend the service years of the
satellite. The Fifth Amendment also amended the scheduled
payment of "Milestone 15" from US$2,000,000 to
US$1,851,785. TELKOM replaced its Palapa
B-4
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satellite with the
TELKOM-2
satellite in
November 2005. The
TELKOM-2
satellite has
a capacity of 24 standard
C-band
transponders
with transponder specifications similar to those of the
TELKOM-1
satellite. The
TELKOM-2
satellite has
been designed for 15 years of
in-orbit
life. TELKOM
expects that the satellite will support its national as well as
regional communications network for voice, video and data
communications. The satellite was launched into
geo-synchronous
orbit
22,300 miles above the earth and operates in geostationary orbit
position located at 118 degrees east longitude.
Contract with Arianespace
On November 8, 2002, TELKOM signed a US$62.9 million
fixed price contract with Arianespace S.A. for the launch of the
TELKOM-2
satellite
using an
Ariane-5
launch vehicle with double launch. Payment was made in 4
installments between January 2004 until September 2004. On
October 15, 2004, the parties amended the contract to allow
TELKOM to exercise a reflight option, which allows TELKOM a
reflight in the event of a launch failure or a certain amount of
compensation in the event of a partial launch failure.
Master of Procurement Partnership Agreement (MPPA) with
Samsung Consortium
On October 9, 2002, TELKOM signed an Initial Purchase Order
Contract for CDMA 2000 IX with a consortium lead by Samsung
Corporation ("Samsung Consortium") for BSS procurement
in Regional Divisions V, VI and VII and on December 23,
2002, TELKOM signed a Master Procurement Partnership Agreement
("MPPA") for the construction of Network and Switching
Subsystem ("NSS") nationwide and BSS for Regional
Divisions IV, V, VI and VII. As of December 31, 2005,
TELKOM's remaining purchase commitment in connection with
this MPPA amounted to US$5.6 million and
Rp.1,826 million.
Samsung Consortium shall service and maintain the CDMA 2000 IX
system that it constructs pursuant to a Service
Level Agreement dated the same date as the MPPA in return
for annual consideration of US$11.6 million.
Master of Procurement Partnership Agreement (MPPA) with
Ericsson CDMA Consortium
TELKOM and a consortium led by Ericsson ("Ericsson CDMA
Consortium") have entered into a Master of Procurement
Partnership Agreement ("MPPA") on December 23,
2002 for the construction of BSS for Regional Division II. As of
December 31, 2005, TELKOM's remaining purchase
commitment in connection with this MPPA amounted to
US$6.8 million and Rp.12,753 million.
Ericsson CDMA Consortium shall service and maintain the CDMA
2000 IX system that it constructs pursuant to a Service
Level Agreement dated the same date as the MPPA in return
for the annual consideration of US$5.3 million.
Master of Procurement Partnership Agreement (MPPA) with
PT INTI
TELKOM and PT INTI signed a Master of Procurement
Partnership Agreement on August 26, 2003, whereby
PT INTI is appointed to construct a CDMA fixed wireless
access network and integrate such network with TELKOM's
existing network and all ancillary services relating thereto in
West Java and Banten. As of December 31, 2005,
TELKOM's remaining purchase commitment in connection with
this MPPA amounted to US$355,275 and Rp.233 million.
PT INTI will service and maintain the CDMA 2000 IX system
that it constructs pursuant to a Service Level Agreement
dated the same date as the MPPA in return for the annual
consideration of US$2.3 million.
Partnership Agreement with Siemens Consortium
TELKOM entered into a Partnership Agreement with a consortium
led by Siemens AG on September 24, 2003, for the
development, procurement and construction of a backbone
transmission network in Kalimantan and Sulawesi, a related
network management system and the provision of
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maintenance services in connection with this network. Other
members of the consortium include PT Siemens Indonesia,
PT LEN Industri and Corning Cable System Gmbh & Co.
K.G. The consideration payable by TELKOM for the fiber optic
networks was US$3.8 million plus Rp.74.0 billion (for
the network located within Kalimantan) and US$3.8 million
plus Rp.70.7 billion (for the network located within
Sulawesi). On March 14, 2005, the parties amended the
Partnership Agreement with respect to the scope of agreement,
work schedule and location, and agreed to increase the contract
price to Rp.157.4 billion plus US$7.7 million. The
development project was completed in May 2005.
PSTN Regional Junction in Jakarta Area
On February 8, 2002, TELKOM signed an agreement with
Olex-Lucent-Brimbun
for
the award of the PSTN Regional Junction Regional Division II
Work, which encompasses SDH Transmission System, Optical Fibre,
NMS and other services. The agreement has been amended several
times, the latest being on December 4, 2003. As of the
latest amendment to the agreement, the total cost of services
and equipment is set at US$28.8 million and
Rp.123.2 billion, respectively. The contract expired in
2004.
Master of Procurement Partnership Agreement (MPPA) with
    Motorola
On March 24, 2003, TELKOM signed a Master of Procurement
Partnership Agreement ("MPPA") with Motorola, Inc.
Under the MPPA, Motorola is obliged to construct a CDMA fixed
wireless access network and integrate such network with
TELKOM's existing network and all ancillary services
relating thereto in Regional Division I. As of December 31,
2005, TELKOM's remaining purchase commitment in connection
with this MPPA amounted to US$422,424 and Rp1,307 million.
Motorola, Inc. will service and maintain the CDMA 2000 IX system
that it constructs, pursuant to a Service Level Agreement
dated the same date as the MPPA in return for an annual
consideration of US$3 million.
Metro Junction and Optical Network Access Agreement for
    Regional Division III with PT INTI
On November 12, 2003, TELKOM entered into an agreement with
PT INTI for the construction and procurement of an optical
network, as well as a network management system and other
related services and equipment, with respect to Regional
Division III (West Java). Under this agreement, TELKOM is
obligated to pay PT INTI a total consideration of
US$6.6 million and Rp.111.7 billion.
Agreement for the Procurement of Softswitch System
    Class 4 with a consortium led by
Santera-Olex
On December 18, 2003, TELKOM entered into an agreement with
a consortium led by
Santera-Olex
for the
construction and procurement of a softswitch system
(class 4) and the improvement of switching capacity in the
existing switching system in Jakarta, Bandung and Surabaya.
Pursuant to the terms of this agreement, TELKOM was to pay
US$4.0 million and Rp.2.5 billion. On March 4,
2004, the parties amended the agreement with respect to the
scope of work and work schedule, and agreed to reduce the Rupiah
portion of the consideration to Rp.2.2 billion. The work
was completed in December 2004.
Co-Operation
Agreement on Fixed Wireless CDMA Facilities Construction in KSO
    Divre VII Area
On January 14, 2003, TELKOM and Bukaka SingTel entered into
a
Co-Operation
Agreement on Fixed Wireless CDMA Facilities Construction in KSO
Divre VII Area (the
"Co-Operation
Agreement") that implemented the terms of the June 11,
2002 Memorandum of Understanding between TELKOM and Bukaka
SingTel. Under the terms of the
Co-Operation
Agreement,
TELKOM, through its Fixed Wireless Division, will invest
US$30.8 million for the construction of fixed wireless CDMA
facilities for 146,700 line units in Denpasar, Makasar, Manado,
Kupang and Mataram, which facilities will be
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managed, operated and maintained by Bukaka SingTel. The new
facilities are expected to be completed by 2006, with TELKOM and
its Fixed Wireless Division receiving 95% of net revenues
generated by the new facilities until such time as an internal
rate of return of 28% is achieved, after which TELKOM and Bukaka
SingTel will each receive 50% of net revenues. The
Co-Operation
Agreement
will expire on December 31, 2010, at which time ownership
of the new facilities will vest in TELKOM.
Partnership Agreement for the Construction and Provision of
    High Performance Backbone in Sumatera
On November 30, 2001, TELKOM signed a partnership agreement
with a consortium consisting of PT Pirelli Cables Indonesia
and PT Siemens Indonesia for the construction and provision
of a high performance backbone network in Sumatera. The
agreement became effective as of June 10, 2002. The scope
of work includes the provision of an optical fiber cable,
together with transmission equipment and network management
systems. TELKOM is obligated to pay US$49.2 million and
Rp.174.4 billion (together with
value-added
tax
thereon) as consideration. The amount due under the agreement
was fully paid in April 2004.
Partnership Agreement for the Development of a PSTN Regional
    Junction for Regional Division V (East Java)
On December 5, 2001, TELKOM entered into a partnership
agreement with a consortium consisting of Sumitomo Corporation,
NEC Corporation and PT Nasio Karya Pratama for the
development of a high quality PSTN Regional Junction for
Regional Division V (East Java). The scope of work includes the
development of a SDH transmission system, as well as the
provision of ancillary fiber optic and other related equipment.
TELKOM was initially obligated to pay Japanese Yen
3.7 billion and Rp.125.5 billion (which is inclusive
of
value-added
tax).
The parties agreed to add another partner, PT Communication
Cable System Indonesia, to the consortium on September 27,
2002. In accordance with an amendment agreement dated
December 11, 2003, the parties agreed to amend the contract
price payable by TELKOM to Japanese Yen 1,258.8 million and
Rp.188.8 billion (which is exclusive of
value-added
tax). In
June 2004, the parties agreed to amend this agreement for the
volume and scope of work and the project implementation period.
The total contract price after this amendment is
Rp.187.4 billion, or Japanese Yen 1.3 billion. The
development project was completed in October 2004.
Agreement for
Dumai-Melaka
Cable
    System
On May 14, 2004, TELKOM entered into a Cooperation
Agreement with Telekom Malaysia Berhad ("Telekom
Malaysia") pursuant to which TELKOM and Telekom Malaysia
formed a consortium for the deployment and maintenance of the
Dumai-Melaka
Cable
System. On the same date, the consortium entered into a Supply
Contract with NEC Corporation for the deployment of the
150 km optical submarine cable between Indonesia and
Malaysia, which was scheduled to be completed by the end of 2004
and was completed in January 2005. TELKOM and Telekom Malaysia
were to contribute equally to a payment to NEC Corporation of
US$8.7 million.
Acquisition of Dayamitra
On May 17, 2001, TELKOM acquired 90.32% of the issued and
fully paid shares of Dayamitra, the KSO VI Investor, for
US$134.2 million (including consultant's fee of
US$3.3 million) and also purchased a call option and
granted a put option with respect to the remaining 9.68% partner
shares of Dayamitra for the amount of US$6.3 million which
was fully paid in 2003. An initial payment of
US$18.3 million was paid on the closing date of the
transaction on May 17, 2001, US$8.9 million was paid
on August 10, 2001 as an adjustment to the purchase price
based on Dayamitra's adjusted working capital and the
balance of US$103.6 million was to be paid through an
escrow account in eight quarterly installments of
US$12.9 million each beginning on August 17, 2001 and
TELKOM paid the last quarterly installment on May 17, 2003.
On December 14, 2004, TELKOM exercised its call option to
purchase, and acquired, the remaining 9.68% of the shares of
Dayamitra, for an aggregate consideration
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of approximately US$22.1 million which represents the
present value of the option strike price of US$16.2 million
plus the option purchase price of US$6.3 million and
payment for Dayamitra's adjusted working capital of
US$1.0 million. TELKOM is required to pay the option strike
price less funds available in the escrow account on
November 30, 2004 in 16 equal installments, the last of
which is required to be made on March 26, 2006.
PT Mitra Global Telekomunikasi Indonesia
On January 20, 2004, TELKOM and MGTI entered into an
agreement to amend and restate the KSO Agreement with respect to
Regional Division IV. Under the amended and restated KSO
agreement, the rights to operate
fixed-line
telecommunication services in KSO IV region are transferred to
TELKOM and KSO IV is operated under the management, supervision,
control and responsibility of TELKOM. In addition, for the
remaining KSO period, TELKOM is entitled at its sole discretion
and expense to construct new telecommunication facilities in
Regional Division IV. MGTI receives fixed monthly payments,
while TELKOM is entitled to the balance of the KSO revenues
after the monthly amounts due to MGTI and operating expenses. If
the KSO IV unit is unable to or does not for any reason pay MGTI
the fixed monthly payments due to it, TELKOM is obligated to
make up any deficiency. At the end of the KSO period
(December 31, 2010), all rights, title and interest of MGTI
in existing property, plant and equipment (including new
additional installations) and inventories shall be transferred
to TELKOM at no cost. As a result of the amended and restated
KSO agreement, TELKOM obtained the legal right to control
financial and operating decisions of Regional Division IV for a
purchase price of US$390.7 million, or
Rp.3,285 billion, which represents the present value of the
fixed monthly payments (totaling US$517 million) to be paid
by TELKOM to MGTI from 2004 through 2010 plus direct cost of the
business combination.
Indemnity given to KAP Hans Tuanakotta Mustofa & Halim
(formerly KAP Hans Tuanakotta & Mustofa)
TELKOM has entered into three indemnity agreements with
Deloitte. Under the first agreement, dated February 9,
2004, TELKOM agreed to indemnify Deloitte against reasonable
legal costs incurred in successfully defending any legal
proceedings brought against Deloitte on the basis of the
inclusion of the audited 2000 and 2001 financial statements in
Amendment No. 2 to 2002 Annual Report on Form 20-F/A
that was filed on February 9, 2004, provided however that
the indemnity will be void and inoperative if a court, after
adjudication, determines that Deloitte is liable for
professional malpractice. If this situation were to arise,
Deloitte has agreed to immediately reimburse TELKOM for all
amounts paid by TELKOM under this indemnity.
Under the second agreement, dated June 29, 2004, TELKOM has
agreed to indemnify Deloitte against reasonable legal costs
incurred in successfully defending any legal proceedings brought
against Deloitte on the basis of the inclusion of the audited
2001 financial statements in its 2003 Annual Report on
Form 20-F, provided however that the indemnity will be void
and inoperative if a court, after adjudication, determines that
Deloitte is liable for professional malpractice. If this
situation were to arise, Deloitte has agreed to immediately
reimburse TELKOM for all amounts paid by TELKOM under this
indemnity.
Under the third agreement, dated April 25, 2005, TELKOM
provided a similar indemnity to the second agreement, but with
respect to inclusion of the audited 2001 financial statements in
its Amendment No. 1 to 2003 Annual Report on
Form
20-F/A.
Medium-Term Notes Issuance Agreement
See Item 5. "Operating and Financial Review and
Prospects — B. Liquidity and Capital
Resources —
Medium-Term
Notes".
See Exhibit 4.45 for an English summary of the terms and
conditions of the MTN.
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NEC-Siemens
Consortium
On June 10, 2005, TELKOM entered into a partnership
agreement with NEC-Siemens Consortium, a consortium consisting
of NEC Corporation and PT Siemens Indonesia for the
procurement and installation of Ring JASUKA Backbone amounting
to US$46.9 million and Rp.169.6 billion. The scope of
work under this agreement covers the procurement and
installation of Ring JASUKA Backbone, which is the optical cable
transmission system consisting of
(i)
Ring-I
(Link
Jakarta-Tanjung
Pandan-Pontianak-Batam-Dumai-Pekanbaru-Palembang-Jakarta); and
(ii) Ring-II (Link Medan-Padang-Pekanbaru-Medan).
In July 2005, TELKOM entered into a supply contract with NEC
Corporation for the Tanjung Pandan-Pontianak capacity expansion
amounting to US$4,636,493.96, excluding 10% VAT. The scope of
work under this agreement includes the procurement and
installation of Ring JASUKA Backbone, which expands the capacity
of the existing undersea optical cable transmission system.
D.     Exchange controls
Foreign Equity Ownership Restrictions
Prior to September 1997, foreign investors were only permitted
to purchase up to 49% of shares offered in a public offering and
up to 49% of the publicly listed shares of any Indonesian listed
company 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 flow of foreign exchange. Capital transactions, including
remittances of capital, profits, dividends and interest, are
free of exchange controls. A number of regulations,
however, have an impact on the exchange system. For example,
only banks are authorized to deal in foreign exchange and
execute exchange transactions related to the import and export
of goods. In addition, Indonesian banks (including branches
of foreign banks in Indonesia) are required to report to Bank
Indonesia (the Indonesian Central Bank) any fund transfers
exceeding US$10,000.
As a
state-owned
company, TELKOM, based on the decree of the Head of Foreign
Commercial Loan Coordinating Team ("PKLN"), is
required to obtain an approval from PKLN prior to acquiring
foreign commercial loans and must submit periodical reports to
PKLN during the term of the loans.
Bank Indonesia holds the authority to issue Rupiah currency and
has responsibility for maintaining 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 offer prices announced by Bank Indonesia on a
daily basis. On August 14, 1997, Bank Indonesia terminated
the trading band policy, effectively free floating the Rupiah
against other currencies. Since that date, the Rupiah has
depreciated significantly against world currencies.
During the past 25 years, 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 Rp.415 to Rp.623 to the U.S. Dollar; in
March 1983, when the rate went from Rp.703 to Rp.970 to the
U.S. Dollar; and in September 1986, when the rate fell from
Rp.1,134 to Rp.1,644 to the U.S. Dollar. Between the time
of the 1986 devaluation and August 14, 1997 the value of
the Rupiah has gradually adjusted downward against the
U.S. Dollar by about 4% annually. Since the free-floating
regime was implemented in August 1997, the Rupiah fluctuation
has been significant. During 2005, the average rate of Rupiah to
the U.S. Dollar was Rp.9,710, with the highest and lowest
rates being Rp.10,800 and Rp.9,133 respectively.
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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 fixed
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, which,
as of the date of this Annual Report is at the rate of 20%, on
the amount of the distribution (in the case of cash
dividends) or on the stockholders' proportional share of
the value of the distribution. A lower rate provided under
double taxation treaties may be applicable provided the
recipient is the beneficial owner of the dividend and has
provided to the Company (with a copy to the Indonesian Office of
Tax Services where the Company is registered) a Certificate of
Tax Residence issued by the competent authority, or its
designee, of the jurisdiction where the Non-Indonesian Holder is
domiciled (the "Certificate of Residence"). 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 through an Indonesian stock
exchange is subject to a final 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 of
founder shares or the sale or transfer of founder shares through
an Indonesian stock exchange may, under current Indonesian tax
regulations, be subject to additional 0.5% final 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%.
In 1999,
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the Ministry of Finance issued a Decision that stipulates the
estimated net income for the sale of shares in a
non-public
company to
be 25% of the sale price, resulting in an effective withholding
tax rate of 5% of the sales price. This is a final withholding
tax and the obligation to pay lies with the buyer (if it is
an Indonesian taxpayer) or the Company (if the buyer is a
non-resident taxpayer). Exemption from withholding tax on income
from the sale of shares in a
non-public
company may
be available to
non-resident
sellers of
shares depending on the provisions of the relevant double
taxation treaties. In order to benefit from the exemption under
the relevant double taxation treaty, the non-resident seller
must provide the Certificate of Tax Residence to the buyer or
the Company and to the Indonesian Tax Office that has
jurisdiction over the buyer or the Company (if the buyer is
a
non-resident
taxpayer).
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, except for the sale or transfer of shares in a
non-public company, the current Indonesian tax regulations do
not provide specific 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 Office by making a
specific application accompanied by a Certificate of Residence
issued by the competent tax authority, or its designee; of the
jurisdiction in which the Non-Indonesian Holder is domiciled.
Stamp Duty
Any documents that are prepared in the transactions in common
stock in Indonesia, which documents will be used as evidence in
Indonesia, are subject to stamp duty of Rp.6,000. Generally, the
stamp duty is due at the time the document is executed.
United States Federal Income Taxation
The following is a general description of the principal
United States federal income tax consequences to a
U.S. Holder, as defined below, 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 thereunder, and judicial and administrative
interpretations thereof, all as in effect 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, financial institutions, persons subject to the
alternative minimum tax, broker-dealers, persons that have a
"functional currency" other than the U.S. Dollar
and persons owning, directly or indirectly, 10% or more of the
voting shares of the Company) may be subject to special rules
not discussed below. The following summary is limited to
U.S. Holders, as defined below, who will hold the ADSs or
shares of Common Stock as "capital assets" within the
meaning of Section 1221 of the Code and not as part of a
"hedge," "straddle" or "conversion
transaction" within the meaning of Sections 1221, 1092
and 1258 of the Code and the regulations thereunder. The
discussion below also does not address the effect of any
United States state, local or foreign tax law or any
United States federal estate, gift or alternative minimum
tax law on a holder of the ADSs or shares of Common Stock.
As used herein, the term "U.S. Holder" means a
holder of ADSs or shares of Common Stock who is (i) a
citizen or resident of the United States for
United States federal income tax purposes; (ii) a
corporation, or other entity treated as a corporation, created
or organized under the laws of the United States or any
political subdivision thereof; (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.
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If a partnership (including any entity treated as a partnership
for United States federal income tax purposes) holds ADSs
or shares of Common Stock, the tax treatment of a partner in
such partnership will depend upon the status of the partner and
the activities of the partnership. Partners in such a
partnership should consult their tax advisors as to the
particular United States federal income tax consequences
applicable to them.
Holders of ADSs 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.
You are urged to consult your tax advisor concerning the
particular United States federal, state, local and foreign
income and other tax considerations regarding the ownership and
disposition of the ADSs or shares of Common Stock.
Taxation of Distributions
Subject to the passive foreign investment company
("PFIC") rules discussed below, the gross amount of a
distribution with respect to ADSs or shares of Common Stock
(other than certain pro rata distributions of ADSs or shares of
Common Stock or rights to subscribe for ADSs or shares of Common
Stock), without reduction for Indonesian taxes withheld, will be
treated as a dividend subject to tax as ordinary income on the
date of receipt by the Depositary or the holder of such ADSs or
shares of Common Stock, respectively, to the extent of the
Company's current and accumulated earnings and profits as
determined for U.S. federal income tax purposes. A
non-corporate recipient of dividend income will generally be
subject to tax on such dividend income at a maximum
U.S. federal rate of 15% rather than the marginal tax rates
generally applicable to ordinary income provided certain
requirements are met. Dividends received from "qualified
foreign corporations" generally qualify for the reduced
rate. A non-U.S. corporation (other than a PFIC) will
generally be considered to be a qualified foreign corporation
(i) if it is eligible for the benefits of a comprehensive
tax treaty with the United States which the Secretary of
Treasury determines is satisfactory for purposes of this
provision and which includes an exchange of information program;
or (ii) with respect to any dividend it pays on stock which
is readily tradable on an established securities market in the
United States. The Treasury Department has determined that
the income tax treaty between Indonesia and the United States as
in effect as of the date of this Annual Report meets the
requirements described in clause (i) above and the Company
believes that it would be eligible for the benefits of such
treaty. In addition, because the ADSs are listed on the
New York Stock Exchange, an established securities market
in the United States, they would under Treasury Department
guidelines be considered to be readily tradeable on that
exchange. Distributions, if any, in excess of current and
accumulated earnings and profits will constitute a 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 the remaining portion of the distribution is
in excess of such basis, that amount will constitute capital
gain as discussed below. U.S. corporate holders will
generally not be eligible for the dividends received deduction
otherwise allowed under Section 243 of the Code for
distributions to domestic corporations in respect of
distributions on ADSs or shares of Common Stock.
If a distribution is paid with respect to ADSs or shares of
Common Stock in Rupiah, the amount of the distribution will
generally equal the U.S. Dollar value of the Rupiah
distribution, including the amount of any Indonesian tax
withheld, calculated by reference to the exchange rate in effect
on the date the distribution is actually or constructively
received by the Depositary or the holder of such shares of
Common Stock, respectively, regardless of whether the payment is
in fact converted into U.S. Dollars on that date. Any
subsequent gain or loss in respect of such Rupiah arising from
exchange rate fluctuations will be ordinary income or loss. This
exchange gain or loss will generally be treated as United States
source income for United States foreign tax credit limitation
purposes. If the Depositary
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converts the Rupiah to U.S. Dollars on the date it receives
such Rupiah, U.S. Holders will not recognize any such gain
or loss.
Subject to the limitations and conditions set forth in the Code,
U.S. Holders 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. 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.
U.S. Holders that do not elect or are not permitted to
claim foreign tax credits may instead claim a deduction for
Indonesian tax withheld.
Taxation of Capital
Gains
Subject to the PFIC rules discussed below, the sale or other
disposition of ADSs or shares of Common Stock by a
U.S. Holder will generally result in the recognition of
U.S. source gain or loss in an amount equal to the
difference between the amount realized on the sale or other
disposition and the holder's adjusted basis in such ADSs or
shares of Common Stock. 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. As of the date of this
Annual Report,
long-term
capital gain
of a
non-corporate
holder is subject to a maximum tax rate of 15% in respect of
property with a holding period of more than one year. The
deductibility of a capital loss is subject to limitations.
Passive Foreign Investment
Company Status
Adverse United States federal income tax rules apply to holders
of equity interests in a corporation classified as a 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 the average value of its assets determined
quarterly for the taxable year consists of passive assets.
Passive assets are defined 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 a PFIC. If the
Company is not operated in the manner anticipated as of the date
of this Annual Report, 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 gain upon sale or other
disposition or certain distributions realized by a
U.S. Holder with respect to its ADSs or shares of Common
Stock would be allocated ratably over the entire period during
which the U.S. Holder held such ADSs or shares of Common
Stock and would be subject to the highest ordinary income tax
rate for each taxable year (other than the amounts allocable to
the current year of the U.S. Holder) in which the items
were treated as having been earned, regardless of the rate
otherwise applicable to the U.S. Holder. Such
U.S. Holder would also be liable for an additional tax
equal to an interest charge on the tax liability attributable to
income that is treated as allocated to prior years as if such
liability had actually been due in each such prior year.
If the Company is classified as a PFIC, a U.S. Holder would
not be eligible for a reduced tax rate on dividends paid on, and
on gain realized with respect to dispositions of, ADSs or shares
of Common Stock. See "Taxation of Distributions" above.
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F.     Dividends and paying
agents
Not applicable.
G.     Statement by experts
Not applicable.
H.     Documents on display
TELKOM files reports, including annual reports on
Form
20-F
and
other information with the SEC pursuant to the rules and
regulations of the SEC that apply to foreign private issuers.
You may read and copy any materials filed with the SEC at the
Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20459. You may obtain information on the
operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330.
Subject
to some exceptions, TELKOM is required to file its periodic
reports electronically through the SEC's EDGAR system. Any
filings TELKOM makes electronically will be available to the
public over the Internet at the SEC's Website at
http://www.sec.gov.
I.     Subsidiary Information
Not applicable.
ITEM 11.
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
A.     Disclosure About Market
Risk
General
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
long-term
foreign
currency liabilities as it believes that the expenses associated
with fully hedging such liabilities are not justified. Instead
the Company hedges its obligations for the current year. As of
December 31, 2005, foreign currency time deposits provided
approximately 32.25% coverage against foreign currency
denominated current liabilities. The Company's exposure to
interest rate risk is managed through maintaining a mix of fixed
and variable rate liabilities and assets, including
short-term
fixed rate
assets, the rates for which are reset periodically. The
Company's exposure to such market risks fluctuated
significantly during 2003, 2004 and 2005 as the Indonesian
economy has been affected by a significant fluctuation of the
Rupiah and interest rates. The Company is not able to predict
whether such conditions will continue during the remainder of
2006 or thereafter.
Interest Rate Risk
The Company's exposure to interest rate fluctuations
results primarily from floating rate
long-term
debt pursuant
to loans under the Government
on-lending
program
which have been used to finance the Company's capital
expenditures which bear interest at rates for the Rupiah portion
based on the average for the preceding six months for three
month certificates issued by Bank Indonesia plus 1% or based on
floating interest rates offered by the lenders plus 5.25% and
for the
non-Rupiah
portion based on floating interest rate offered by the lenders
plus 0.5%. See Note 22 to the Company's consolidated
financial statements. To the extent interest rates in Indonesia
fluctuate significantly, the Company's interest obligations
under its
long-term
debt could increase.
The table below provides information about the Company's
material financial instruments, some of which are sensitive to
changes in interest rates. For debt obligations and time
deposits, the table presents principal cash flows 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
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Table of Contents
instrument's actual cash flows are denominated in Rupiah,
U.S. Dollar, Euro 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) fixed interest rates on Rupiah time deposits are based
on average interest rates offered in effect as of
December 31, 2005 by the banks where such deposits were
located; (ii) variable interest rates on Rupiah denominated
long-term
liabilities
are calculated as of December 31, 2005 and are based on
contractual terms setting interest rates based on average rates
for the preceding six months on three month certificates issued
by Bank Indonesia or based on the average
3-month
deposit rate
offered by the lenders; (iii) variable interest rates on
U.S. Dollar deposits are based on interest rates offered by
the various lending institutions to the Republic of Indonesia as
of December 31, 2005; and (iv) the value of marketable
securities is based on the value of such securities at
December 31, 2005. 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
influenced by a number of factors, including changes in interest
rates in Indonesia and other monetary and macro economic factors
affecting Indonesia. Such assumptions are different from the
rates used in 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, 2005
Expected Maturity Date
Foreign
Rp.
2011-
Fair
Currency
Equivalent
Rate
2006
2007
2008
2009
2010
2025
Value
(in
(Rp. in
(Rp. in
million)
million)
(%)
million)
(Rp. in million)
ASSETS
Fixed Rate
Cash and cash equivalents
Time deposit
Rupiah
Principal
3,642,172
3,642,172
3,642,172
Interest
9.95
U.S. Dollar
Principal
72.32
710,497
710,497
710,497
Interest
3.46
Euro
Principal
56.55
659,372
659,372
659,372
Interest
1.65
Temporary Investments-Available-for- Sale Securities
Rupiah
22,064
22,064
22,064
LIABILITIES
Short-term bank loans
Variable Rate
Rupiah
Principal
170,000.00
170,000
170,000
170,000
Interest
13.1
1,951
Fixed Rate
Rupiah
Principal
3,800.00
3,800
3,800
3,800
Interest
14.1
225
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Outstanding Balance as at
December 31, 2005
Expected Maturity Date
Foreign
Rp.
2011-
Fair
Currency
Equivalent
Rate
2006
2007
2008
2009
2010
2025
Value
(in
(Rp. in
(Rp. in
million)
million)
(%)
million)
(Rp. in million)
Long-term
    debts
(1)
Variable Rate
Rupiah
Principal
1,955,132.87
1,955,133
301,631
249,265
189,326
190,831
167,431
856,649
1,619,930
Interest
8.8
158,346
128,874
111,129
94,978
79,037
343,408
U.S. Dollar
Principal
198.21
1,949,211
336,020
336,020
278,994
142,597
142,597
712,983
1,894,189
Interest
5.0
90,611
74,967
59,356
48,591
41,020
91,603
Euro
Principal
36.68
427,718
171,087
171,087
85,544
—
—
—
422,954
Interest
3.3
12,226
6,640
1,184
—
—
—
Fixed Rate
Rupiah
Principal
1,880,065.08
1,880,065
178,921
1,480,643
28,301
35,090
43,060
114,083
1,948,814
Interest
15.3
282,853
174,127
48,090
40,766
31,615
28,724
U.S. Dollar
Principal
614.61
6,044,691
1,143,380
1,074,262
1,111,291
1,072,564
1,050,847
592,347
6,034,323
Interest
5.7
339,866
273,480
205,022
133,489
63,707
102,450
Japanese Yen
Principal
15,527.59
1,302,575
95,876
95,876
80,147
64,417
64,417
901,841
1,432,071
Interest
3.1
38,364
36,508
33,588
31,282
29,285
200,474
(1)
Long-term debts consist of loans which are subject to interest;
    namely two-step loans, notes and bonds, liabilities of business
    acquisitions and long-term bank loans, in each case including
    their current maturities.
Exchange Rate Risk
The Company's exposure to exchange rate fluctuations
results primarily from long-term debt obligations and accounts
receivable and payable, which are primarily paid for through
draw downs under the Government on-lending program and are
expressed in U.S. Dollar, Japanese Yen, Euro, Singapore
Dollar and Great Britain Pound Sterling. For a description of
the Company's foreign currency assets and liabilities, see
Note 52 to the Company's consolidated financial
statements. Part of these obligations might be offset 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
financial 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, Euro, Singapore Dollar, Great
Britain Pound Sterling and Japanese Yen debt obligations and
term deposits and the Company's accounts payable and
receivable. The table presents principal cash flows by expected
maturity dates. The information presented in the table has been
determined based on assumptions for the exchange rates for
U.S. Dollar as well as other currencies, which are based on
the selling and buying rates quoted by Reuters on
December 31, 2005, applied respectively to monetary assets
and liabilities. The buying and selling rates as of
December 31, 2005 were Rp.9,825 and Rp.9,835 to US$1.00,
respectively. Telkomsel applied the Bank Indonesia middle buy
and sell rate for its monetary asset and liabilities which was
Rp.9,830 to US$1.00 as of December 31, 2005. However, no
assurance can be given that such assumptions will be correct for
future periods.
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Such assumptions and the information described in the table may
be influenced by a number of factors, including a fluctuation
and/or depreciation of the Rupiah in future periods.
Outstanding Balance
as at
December 31, 2005
Expected Maturity Date
Foreign
Rp.
2011-
Fair
Currency
Equivalent
2006
2007
2008
2009
2010
2024
Value
(in
(Rp. in
millions)
million)
(Rp. in million)
ASSETS
Cash and cash equivalents
U.S. Dollar
81.96
805,489
805,489
805,489
Japanese Yen
Euro
59.14
689,472
689,472
689,472
Trade accounts receivable
U.S. Dollar
21.10
207,311
207,311
207,311
Other accounts receivable
U.S. Dollar
0.30
2,910
2,910
2,910
Euro
0.01
88
88
88
Other current assets
U.S. Dollar
13.63
133,926
133,926
133,926
Advances and other non- current assets
U.S. Dollar
2.25
22,162
22,162
22,162
Escrow accounts
U.S. Dollar
12.89
126,128
126,128
126,128
LIABILITIES
Trade accounts payable
Related parties
U.S. Dollar
15.09
148,423
148,423
148,423
Third parties
U.S. Dollar
125.40
1,223,050
1,223,050
1,233,050
Euro
68.30
796,343
796,343
796,343
Great Britain Pound Sterling
0.00
14
14
14
Japanese Yen
66.03
5,508
5,508
5,508
Singapore Dollar
0.01
33
33
33
Accrued expenses
U.S. Dollar
21.01
206,639
206,639
206,639
Japanese Yen
52.85
4,433
4,433
4,433
Singapore Dollar
0.42
2,497
2,497
2,497
Euro
8.79
102,509
102,509
102,509
Advances from customers and suppliers
U.S. Dollar
0.15
1,474
1,474
1,474
Long-term
    debts
(1)
U.S. Dollar
812.82
7,993,902
1,479,401
1,410,282
1,390,285
1,215,160
1,193,444
1,305,330
7,928,512
Japanese Yen
15,527.59
1,302,575
95,876
95,876
80,147
64,417
64,417
901,841
1,432,071
Euro
36.68
427,718
171,087
171,087
85,544
—
—
—
422,954
(1)
Long-term debts for the purpose of this table consist of loans
    denominated in foreign currencies namely,
two-step
loans,
    liabilities of business acquisitions,
long-term
bank loans,
    notes and bonds, in each case including their current maturities.
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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 financial performance of such
companies may be affected by the fluctuation of macro economic
and social conditions such as the level of economic activity,
Rupiah exchange rates against other currencies, inflation and
interest rates.
ITEM 12.
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
Not applicable.
PART II
ITEM 13.
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
There are no defaults, dividend arrearages or delinquencies to
which this Item applies. But see Item 5. "Operating
and Financial Review and Prospects — B. Liquidity and
Capital Resources — Indebtedness" for information
on covenant defaults for which waivers have been obtained.
ITEM 14.
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND
    USE OF PROCEEDS
Not applicable.
ITEM 15.
CONTROL AND PROCEDURES
Disclosure Controls and Procedures
TELKOM has a disclosure committee comprised of 14 senior members
from various departments and chaired by the Director of Finance.
The disclosure committee's role is to support TELKOM's
management in designing and evaluating TELKOM's disclosure
controls and procedures and participating in the disclosure
process. TELKOM formally established its disclosure committee on
February 18, 2005. Since its formal establishment, the
disclosure committee has established internal work procedures
relating to the preparation of various disclosure materials for
quarterly and annual reporting, including TELKOM's annual
report on
Form
20-F.
The
establishment of the disclosure committee formalized the
previous disclosure process where designated senior employees
from various departments were responsible for assisting with the
necessary disclosures, while the department heads were
responsible for reviewing of such disclosure materials.
TELKOM's principal executive officer and principal
financial officer carried out an evaluation of the effectiveness
of TELKOM's disclosure controls and procedures (as defined
in Rules
13a-15(e)
and
15d-15(e)
of the
Exchange Act) as of December 31, 2005. TELKOM's
principal executive officer and principal financial officer
concluded, based on their evaluation, as of December 31,
2005, that the design and operation of TELKOM's disclosure
controls and procedures were not effective to ensure that
information required to be disclosed in the reports TELKOM files
and submits under the Exchange Act is recorded, processed,
summarized and reported as and when required, and is accumulated
and communicated to TELKOM's management, including
TELKOM's President Director and Director of Finance, to
allow timely decisions regarding required disclosure.
Internal Controls over Financial Reporting
In connection with the audit of our financial statements,
reportable conditions (as defined under standards established by
the American Institute of Certified Public Accountants) relating
to TELKOM's internal control over financial reporting (as
defined in
Rules
13a-15(f)
and
15d-15(f)
of the
Exchange Act) were identified and communicated by PwC in their
report dated January 9, 2004 and delivered to
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TELKOM on January 12, 2004, and discussed by PwC with the
Board of Directors on January 14, 2004 and with the Board
of Commissioners and the Audit Committee on January 16,
2004, in connection with its audit of the consolidated financial
statements as of and for the year ended December 31, 2002.
Reportable conditions were also identified and communicated by
KPMG to TELKOM and its Audit Committee on June 29, 2004,
July 2005 and May 2006 in connection with its audit of the
consolidated financial statements as of and for the years ended
December 31, 2003, 2004 and 2005, respectively. Both PwC
and KPMG identified the same material weaknesses based on their
respective audits of TELKOM. Both PwC and KPMG informed TELKOM
that they were unable to determine when such material weaknesses
first arose, as such material weaknesses appeared to exist prior
to the commencement of their respective audit periods. Both PwC
and KPMG informed the Audit Committee that they had identified
"reportable conditions" each of which constituted a
"material weakness" (as each such term is defined
under standards established by the American Institute of
Certified Public Accountants) in TELKOM's internal control
over financial reporting with respect to: (1) inadequate
personnel resources with sufficient knowledge and experience in
the application of Indonesian GAAP and US GAAP accounting
principles because TELKOM did not have sufficient personnel in
its accounting department with expertise in applying Indonesian
GAAP to complicated accounting issues or in identifying and
applying differences in accounting treatments under Indonesian
GAAP and U.S. GAAP; (2) deficiencies in the
organizational structure of the accounting department, including
the oversight function for accounting and financial reporting
because there was inadequate management, supervision and review
for the accounting functions; (3) inadequate internal
processes for the assessment of critical, significant and
judgmental accounting areas; accordingly, when a set of facts
gave rise to critical or significant accounting issues or raised
significant issues of judgment, such issues were not always
properly identified, or, even if properly identified, the
appropriate experts were not always consulted and issues of
judgment were not always elevated to the appropriate level of
management or the Audit Committee; and (4) insufficient
written policies and procedures for the accounting and financial
reporting function, insufficient knowledge of and compliance
with, existing policies and procedures among relevant personnel
and insufficient emphasis by the internal audit function on the
foregoing; in particular, accounting and financial reporting
personnel did not have objective written policies and procedures
to follow when addressing significant accounting and financial
reporting issues and so such issues were not always dealt with
in a consistent manner, and the internal audit function did not
focus on identifying or identify this issue as well as the other
reportable conditions identified herein.
In response to the matters identified by TELKOM's external
auditors, under the supervision of the Audit Committee, in
January 2004 TELKOM's senior management directed that
TELKOM dedicate resources and take steps to strengthen control
processes and procedures in order to prevent a recurrence of the
circumstances that resulted in the need to restate TELKOM's
consolidated financial statements which include among others:
(i) an assessment of the organizational structure of the
finance department, including to determine additional resources
which need to be dedicated to it; (ii) the enhancement of
all finance-related policies and procedures covering accounting
and financial reporting; (iii) the improvement of standard
documentations requirements for the assessment of critical,
significant and judgmental accounting areas; (iv) the
improvement of understanding of relevant Indonesian GAAP and
U.S. GAAP accounting principles and financial reporting
responsibilities across all business units through intensive and
continuing education and training and proactive consultations
with advisors on technical matters as they relate to
TELKOM's financial reporting; and (v) modification of
the mandate of TELKOM's internal audit function to place
greater emphasis on the adequacy of, and compliance with,
procedures relating to internal control over financial reporting.
Since 2004, TELKOM has taken a number of steps specifically
aimed at addressing the senior management's directions on
the foregoing. Such steps include:
(1) TELKOM carried out a recruitment exercise for
    accountancy graduates and provided regular training programs on
    accounting and financial reporting issues with emphasis on
    Indonesian and U.S. GAAP. Since May 2004, TELKOM has
    provided additional information, resources
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and databases to its accounting staff by subscribing to various
    printed or
on-line
accounting publications.
(2) TELKOM over hauled its organization structure in
    respect of internal control over financial reporting to achieve
    the separation of each financial reporting function and also to
    bring qualified, knowledgeable employees to implement
    TELKOM's improved financial reporting policies and
    procedures. In connection with the improvement of the oversight
    function, TELKOM's senior management directed the addition
    of a new oversight function to its accounting organization
    structure to improve the assessment of critical, significant and
    judgmental accounting issues by establishing a new unit
    dedicated to the on-going review and monitoring of TELKOM's
    internal control over financial reporting. As part of such
    efforts, TELKOM established its "Finance Center" on
    January 6, 2006. The Finance Center is a unit which
    directly reports to Finance Director and acts as a centralized
    decision making and execution body in relation to TELKOM's
    financial reporting for all the business units. The unit is also
    responsible for supporting all the business units of TELKOM in
    all relevant financial areas, including its accounting function.
    Since the establishment of the Finance Center, the Accounting
    Department, which also directly reports to Finance Director and
    is a unit independent from Finance Center, focuses on reviewing
    financial statements produced by all the business units of
    TELKOM to ensure that the financial statements are prepared in
    accordance with generally accepted accounting principles.
(3) On April 13, 2006, TELKOM formally approved and
    issued revised accounting and financial reporting policies and
    related supplements, which take effect retroactively from
    January 1, 2006. Following the issuance of the revised
    accounting and financial reporting policies and the supplements,
    TELKOM is updating its accounting manuals and work procedures as
    operating guidelines for implementation of the new policies.
    Such revised accounting manuals and work procedures are expected
    to be finalized in the third quarter of 2006.
(4) To improve its internal control over financial
    reporting at the entity level and to incorporate the best
    corporate governance practices, TELKOM restructured its
    corporate organization and separated the Risk Management unit
    and Legal Compliance unit, each reporting directly to the CEO.
    Each of these units is responsible for ensuring TELKOM's
    compliance with various internal and external rules and
    regulations in respect of financial reporting and minimizing
    TELKOM's regulatory and business risks which may arise in
    conducting its accounting and financial reporting functions.
(5) Since 2004, in preparation for the compliance with
    Section 404 of Sarbanes-Oxley Act of 2002, TELKOM, in
    conjunction with Ernst & Young, has designed an internal
    control framework and protocol for all of its business
    processes. Since then, TELKOM has gradually adopted and
    implemented such new internal control system in its daily
    operations. Since December 2004, TELKOM has conducted
    walkthroughs and test-runs with respect to the implementation of
    the new internal controls, has made adjustments and also taken
    remedial steps where appropriate to evaluate and monitor the
    implementation of the Directors' Decree on Internal
    Control. TELKOM plans to implement these regular tests and
    remedy problems identified through such tests on a regular
    basis. In addition, TELKOM, also in conjunction with
    Ernst & Young, reviewed the implementation of its
    information technology-related general controls. Such review was
    completed on July 15, 2005.
(6) Since December 2004, TELKOM has modified the mandate of
    its internal audit function to place greater emphasis on the
    adequacy of, and compliance with, procedures relating to
    internal control over financial reporting. Since April 2005,
    with the assistance of Ernst & Young, TELKOM has also been
    assessing the roles and functions of its Internal Audit Unit to
    ensure compliance with the Sarbanes-Oxley Act of 2002.
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Table of Contents
ITEM 16.     RESERVED
ITEM 16A.     AUDIT COMMITTEE
FINANCIAL EXPERT
The Board of Commissioners has determined that Mr. Sahat
Pardede, a member of TELKOM's Audit Committee, qualifies as
an Audit Committee Financial Expert in accordance with the
requirements of Item 16A of Form 20-F.
Mr. Pardede has been a member of TELKOM's Audit
Committee since February 17, 2004. Prior to his appointment
as a member of TELKOM's Audit Committee, Mr. Pardede
practiced, and is currently practicing, as a Certified Public
Accountant in Indonesia and provided auditing services and other
financial services to numerous private companies and public
institutions. Mr. Pardede graduated with a degree in
accounting from the State College of Accountancy, Jakarta and
holds a master degree in business administration from Saint
Mary's University, Canada. He is a Certified Public
Accountant and is also a member of the Indonesian Institute of
Accountants.
ITEM 16B.     CODE OF ETHICS
We have adopted a code of ethics in accordance with the
provisions of Section 406 of the Sarbanes-Oxley Act of
2002. Our code of ethics applies to our President Director,
Finance Director (being our officers in equivalent positions to
a Chief Executive Officer and a Chief Financial Officer) and
persons performing similar functions as well as to our
Commissioners, Directors and other officers and employees. Our
code of ethics may be viewed on our company web site at
www.telkom-indonesia.com/hubunganinvestor/corporategovernance/–etikabisnis–2005.pdf.
If we amend the provisions of our code of ethics that applies to
our President Director, Finance Director and persons performing
similar functions, or if we grant any waiver of such provisions,
we will disclose such amendment or waiver on our company web
site at the same address.
ITEM 16C.     PRINCIPAL ACCOUNTANT
FEES AND SERVICES
The following table summarizes the aggregate fees billed to us
by KPMG, during the fiscal years ended December 31, 2004
and 2005:
Year Ended
December 31,
2004
2005
(in Rp. million)
Audit Fees
19,274.6
42,390.3
Audit-Related Fees
—
—
Tax Fees
—
—
All Other Fees
—
—
A.     Audit Fees
Audit fees in the above table are the aggregate fees billed by
KPMG in 2004 and 2005, in each case in connection with the audit
of our annual consolidated financial statements.
B.
Audit-Related
Fees
None.
C.     Tax Fees
KPMG did not perform any tax compliance, tax advisory or tax
planning services for TELKOM during the fiscal years ended
December 31, 2004 and 2005.
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Table of Contents
D.     All Other Fees
KPMG did not perform any other services for TELKOM during the
fiscal years ended December 31, 2004 and 2005.
E.     Audit Committee
Pre-Approval
Policies
and Procedures
TELKOM has adopted
pre-approval
policies
and procedures under which all
non-audit
services
provided by its independent public accounting firm must be
pre-approved
by
TELKOM's audit committee as set forth in the audit
committee's charter. Pursuant to the charter, permissible
non-audit
services may
be performed by TELKOM's independent registered public
accounting firm provided that: (a) TELKOM's Board of
Directors must deliver to the Audit Committee (through the Board
of Commissioners) a detailed description of the
non-audit
service that
is to be performed by the independent public accounting firm;
and (b) the Audit Committee will determine whether the
proposed
non-audit
service will affect the independence of TELKOM's
independent public accounting firm or would give rise to any
conflict of interest.
Consistent with Section 10(i)(1)(B) of the Exchange Act and
paragraph (c)(7)(i)(C) of
Rule
2-01
of
Regulation
S-X
issued thereunder, the charter of TELKOM's audit committee
waives the
pre-approval
requirement for permissible
non-audit
services
(x) where the aggregate amount of the fees for such
non-audit
services
constitutes no more than five percent of the total amount of
fees paid by TELKOM to its independent registered public
accounting firm during the fiscal year in which the services are
provided or (y) the proposed services are not regarded as
non-audit
services at
the time the contract to perform the same is signed. In either
case, the performance of such
non-audit
services must
subsequently be approved either by a member of the Audit
Committee who has been delegated
pre-approval
authority
by the full Audit Committee or by the full Audit Committee
itself. Notwithstanding the foregoing, none of TELKOM's
independent public accounting firms performed
non-audit
services for
TELKOM during the fiscal years ended December 31, 2004 and
2005.
ITEM 16D.     EXEMPTIONS FROM THE
LISTING STANDARDS FOR AUDIT COMMITTEES
In accordance with Indonesian law, the Company has a
two-tier
board
structure, consisting of a Board of Commissioners and a Board of
Directors. The executive management functions are carried out by
the Board of Directors, while the principal statutory duties of
the Board of Commissioners are to supervise the policies of the
Board of Directors in the operation and management of the
Company and to give advice to the Board of Directors.
Under Jakarta Stock Exchange rules (the "JSX Audit
Committee Rule"), TELKOM's audit committee must
consist of at least three members, one of whom must be an
Independent Commissioner of TELKOM and concurrently the chairman
of the audit committee, while the other two members must be
external independent parties of whom at least one such party
shall have accounting and/or finance expertise. TELKOM's
audit committee is composed of seven members and is chaired by
an Independent Commissioner. Members of Telkom's audit
committee are appointed and dismissed by the Board of
Commissioners.
TELKOM relies on the general exemption under
Rule
10A-3(c)(3)
of the Securities Exchange Act of 1934 with respect to the
composition of its audit committee. For further information on
the
Rule
10A-3(c)(3)
exemption, see Item 6. "Directors, Senior Management
and Employees — A. Directors and Senior
Management — Board of Commissioners'
Committees" and Item 10. "Additional
Information — B. Memorandum and articles of
association — Committees".
TELKOM believes that its reliance on the exemption would not
materially adversely affect the ability of the audit committee
to act independently. TELKOM believes that the intent of the
provision in requiring that each member of the audit committee
to be a member of the board of directors or commissioners, as
applicable, and to be otherwise independent, is to ensure that
the audit committee is independent from influence by management
and would provide a forum separate from management in
187
Table of Contents
which auditors and other interested parties can candidly discuss
concerns. The JSX Audit Committee Rule requires that each member
of the audit committee be independent. The JSX Audit Committee
Rule goes on to require that at least two of the members, the
external independent members, in effect be independent not only
of the management but also of the Board of Commissioners and
Board of Directors and the Company as a whole. TELKOM therefore
believes that the standard established by the JSX Audit
Committee Rule is at least equally effective in ensuring the
ability of the audit committee to act independently.
ITEM 16E.
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
    PURCHASERS
Not applicable.
PART III
ITEM 17.     CONSOLIDATED FINANCIAL
STATEMENTS
Not applicable.
ITEM 18.     CONSOLIDATED FINANCIAL
STATEMENTS
See pages
F-1
through
F-147.
ITEM 19.     EXHIBITS
Exhibit 1 — The Articles of Incorporation of
TELKOM, amended as of July 30, 2004, together with an
English translation thereof.
Exhibit 2 — Not applicable.
Exhibit 3 — Not applicable.
Exhibit 4 — Material Contracts Exhibits:
4.1*
Settlement Agreement between TELKOM and the shareholders of
    AriaWest, dated July 31, 2003.
4.2*
Credit Agreement between TELKOM and the AriaWest lenders, dated
    July 31, 2003.
4.3*
First Amendment to the Conditional Sale and Purchase Agreement
    between TELKOM and the shareholders of AriaWest, dated
    July 31, 2003.
4.4*
Conditional Sale and Purchase Agreement between TELKOM and the
    shareholders of AriaWest, dated May 8, 2002.
4.5*
Conditional Sale and Purchase Agreement between TELKOM and the
    shareholders of Pramindo, dated April 19, 2002.
4.6*
Cooperation Agreement on the Interconnection between
    TELKOM's Fixed Network and Indosat's Local Fixed
    Network and the Settlement of the Interconnection Financial
    Rights and Obligations between TELKOM and Indosat, dated
    September 3, 2002, including an English translation thereof.
4.7**
Kontrak Pengadaan Satelit TELKOM-2 (Contract on Procurement of
    TELKOM-2 Satellite) between TELKOM and Orbital Sciences
    Corporation, dated October 24, 2002.
4.8+
First Amendment to Contract on Procurement of TELKOM-2 Satellite
    between TELKOM and Orbital Sciences Corporation, dated
    December 15, 2003.
4.9**
Kontrak Jasa Peluncur Satelit TELKOM-2 (Agreement on Launch
    Services of TELKOM-2 Satellite) between TELKOM and Arianespace
    S.A., dated November 8, 2002.
4.10*
Master Procurement Partnership Agreement between TELKOM and a
    consortium led by Samsung Electronics, dated December 23,
    2003.
188
Table of Contents
4.11*
Amendment No. 1 to the Master Procurement Partnership
    Agreement between TELKOM and a consortium led by Samsung
    Electronics, dated December 31, 2003.
4.12*
Service Level Agreement between TELKOM and a consortium led by
    Samsung Electronics, dated December 23, 2002.
4.13*
Loan Agreement between TELKOM and The Export-Import Bank of
    Korea, dated August 27, 2003.
4.14*
Master Procurement Partnership Agreement between TELKOM and a
    consortium led by Ericsson, dated December 23, 2002.
4.15*
Service Level Agreement between TELKOM and a consortium led by
    Ericsson, dated December 23, 2002.
4.16*
Master Procurement Partnership Agreement between TELKOM and
    PT Industri Telekomunikasi Indonesia (Persero), dated
    August 26, 2003, including an English translation thereof.
4.17*
Service Level Agreement between TELKOM and PT Industri
    Telekomunikasi Indonesia Tbk., dated August 26, 2003.
4.18*
Partnership Agreement for the Procurement and Construction of
    Backbone Transmission Network between TELKOM and a consortium
    led by Siemens AG, dated September 24, 2003.
4.19**
Development Contract PSTN Excellence Regional Junction Divre-II
    between TELKOM and the Olex-Lucent-Brimbun consortium, dated
    February 8, 2002.
4.20+
Co-Operation Agreement on Fixed Wireless CDMA Facilities
    Construction in KSO Divre VII Area between TELKOM and
    PT Bukaka SingTel International, dated January 14,
    2003.
4.21*
Amendment No. 1 to the Development Contract PSTN Excellence
    Regional Junction Divre-II between TELKOM and the
    Olex-Lucent-Brimbun consortium, dated August 22, 2002.
4.22*
Amendment No. 2 to the Development Contract PSTN Excellence
    Regional Junction Divre-II between TELKOM and the
    Olex-Lucent-Brimbun consortium, dated October 25, 2002.
4.23*
Amendment No. 3 to the Development Contract PSTN Excellence
    Regional Junction Divre-II between TELKOM and the
    Olex-Lucent-Brimbun consortium, dated December 20, 2002.
4.24*
Amendment No. 4 to the Development Contract PSTN Excellence
    Regional Junction Divre-II between TELKOM and the
    Olex-Lucent-Brimbun consortium, dated March 20, 2003.
4.25*
Amendment No. 5 to the Development Contract PSTN Excellence
    Regional Junction Divre-II between TELKOM and the
    Olex-Lucent-Brimbun consortium, dated June 26, 2003.
4.26+
Amendment No. 6 to the Development Contract PSTN Excellence
    Regional Junction Divre-II between TELKOM and the
    Olex-Lucent-Brimbun consortium, dated October 9, 2003.
4.27+
Amendment No. 7 to the Development Contract PSTN Excellence
    Regional Junction Divre-II between TELKOM and the
    Olex-Lucent-Brimbun consortium, dated December 4, 2003.
4.28*
Master Procurement Partnership Agreement between TELKOM and
    Motorola, Inc., dated March 24, 2003.
4.29*
Partnership Agreement for Procurement and Construction of
    Regional Metro Junction and Optic Access Network for Regional
    Division III between TELKOM and PT Industri Telekomunikasi
    Indonesia (Persero), dated November 12, 2003, including an
    English translation thereof.
4.30*
Contract Agreement in connection with the Softswitch System
    Class-4 Procurement Program Through Buy or Return Scheme between
    TELKOM and the Santera-Olex consortium, dated December 18,
    2003.
4.31*
Side Letter to the Partnership Agreement for the Construction
    and Provision of the High Performance Backbone in Sumatera,
    dated June 12, 2003.
189
Table of Contents
4.32*
Amendment No. 1 to the Partnership Agreement for the
    Development of a PSTN Regional Junction for Regional Division V
    (East Java), dated September 27, 2002.
4.33*
Amendment No. 2 to the Partnership Agreement for the
    Development of a PSTN Regional Junction for Regional Division V
    (East Java), dated December 30, 2002.
4.34+
Amendment No. 3 to the Partnership Agreement for the
    Development of a PSTN Regional Junction for Regional Division V
    (East Java), dated December 11, 2003.
4.35*
Supply Contract among TELKOM, NEC Corporation, the Communication
    Authority of Thailand and Singapore Telecommunications Limited,
    dated November 27, 2002.
4.36*
Amended and Restated KSO Agreement between TELKOM and
    PT Mitra Global Telekomunikasi Indonesia, dated
    January 20, 2004.
4.37*
Service Level Agreement between TELKOM and Motorola, Inc., dated
    March 24, 2003.
4.38*
Indemnity Agreement between TELKOM and KAP Hans Tuanakotta
    Mustofa & Halim (formerly KAP Hans Tuanakotta &
    Mustofa), dated February 9, 2004.
4.39+
Supply Contract for the Procurement and Installation of
    Dumai-Melaka Cable System among TELKOM, Telekom Malaysia Berhad
    and NEC Corporation, dated May 14, 2004.
4.40+
Loan Agreement and Acknowledgement of Indebtedness between
    TELKOM and ABN AMRO Bank N.V. Jakarta Branch, dated
    January 28, 2004.
4.41+
Letter Agreement between Indosat and TELKOM, dated
    December 11, 2003 (with regard to the merger of
    PT Indonesian Satellite Corporation Tbk with
    PT Indosat Multi Media Mobile, PT Satelit Palapa
    Indonesia and PT Bimagraha Telekomindo), including an
    English translation thereof.
4.42+
Indemnity Agreement between TELKOM and KAP Hans Tuanakotta
    Mustofa & Halim (formerly KAP Hans Tuanakotta &
    Mustofa), dated June 29, 2004.
4.43++
Medium Term Notes Issuance Agreement dated December 13,
    2004 (English summary).
4.44++
Indemnity Agreement between TELKOM and KAP Hans Tuanakotta
    Mustofa & Halim (formerly KAP Hans Tuanakotta &
    Mustofa), dated April 25, 2005.
4.45
Supply Contract For The Procurement and Installation of Ring
    JASUKA Backbone between TELKOM and NEC-SIEMENS CONSORTIUM, dated
    June 10, 2005.
4.46
Supply Contract For Capacity Expansion of Submarine Cable System
    Tanjung Pandan-Pontianak between TELKOM and NEC Corporation,
    dated July 2005.
*
Filed with Amendment No. 2 to the Annual Report of
    Form 20-F/ A for the year ended December 31, 2002
    filed February 9, 2004 and incorporated herein by reference.
**
Filed with original Annual Report on Form 20-F for the year
    ended December 31, 2002 filed April 17, 2003 and
    incorporated herein by reference.
+
Filed with original Annual Report on Form 20-F for the year
    ended December 31, 2003 filed June 30, 2004 and
    incorporated herein by reference.
++
Filed with original Annual Report on Form 20-F for the year
    ended December 31, 2004 filed July 15, 2005 and
    incorporated herein by reference.
Exhibit 5 — Not applicable.
Exhibit 6 — Earnings per share is computed by
dividing net income by the weighted average number of shares
outstanding during the year, totaling 20,159,999,280 shares in
2003, 2004 and 2005. TELKOM does not have potentially dilutive
ordinary shares.
Exhibit 7 — Not applicable.
190
Table of Contents
Exhibit 8 — List of subsidiaries as of
December 31, 2005:
Name Under Which
Subsidiary Conducts
Name of Subsidiary
Jurisdiction of Incorporation
its Business
PT AriaWest International
Indonesia
AriaWest
PT Multimedia Nusantara
Indonesia
Metra
PT Graha Sarana Duta
Indonesia
GSD
PT Indonusa Telemedia
Indonesia
Indonusa
PT Dayamitra Telekomunikasi
Indonesia
Mitratel
PT Telekomunikasi Selular
Indonesia
Telkomsel
PT Napsindo Primatel Internasional
Indonesia
Napsindo
PT Infomedia Nusantara
Indonesia
Infomedia
PT Pramindo Ikat Nusantara
Indonesia
Pramindo
Exhibit 9 — Not applicable.
Exhibit 10 — Not applicable.
Exhibit 11 — Not applicable. TELKOM intends to
comply with its obligation to disclose its code of ethics by
posting a copy of the code of ethics on its company web site at
www.telkom-indonesia.com/english/hubunganinvestor/index.asp
Exhibit 12 — See Exhibits 12.1 and 12.2
attached hereto.
Exhibit 13 — See Exhibits 13.1 and 13.2
attached hereto.
Exhibit 14 — Not applicable.
191
Table of Contents
SIGNATURES
Pursuant to the requirements of Section 12 of the
Securities Exchange Act of 1934, as amended, the Registrant
hereby certifies that it meets all of the requirements for
filing 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 23rd day of June, 2006.
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk.
By:
/s/ Arwin Rasyid
ARWIN RASYID
President Director
Date: June 23, 2006
192
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
TABLE OF CONTENTS
Page
Report of Independent Registered Public Accounting Firm
F-2
Consolidated Financial Statements
1. Consolidated Balance Sheets
F-5
2. Consolidated Statements of Income
F-7
3. Consolidated Statements of Changes in Stockholders'
    Equity
F-8
4. Consolidated Statements of Cash Flows
F-11
5. Notes to Consolidated Financial Statements
F-13
F-1
Table of Contents
Report of Independent Registered Public Accounting Firm
No. L.05 — 3737 — 06/US
The Shareholders, Board of Commissioners and Board of
Directors
Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia
Tbk.:
We have audited the consolidated balance sheets of Perusahaan
Perseroan (Persero) PT Telekomunikasi Indonesia Tbk. and
subsidiaries (the "Company") as of December 31,
2004 and 2005, and the related consolidated statements of
income, changes in stockholders' equity, and cash flows for
each of the years in the three-year period ended
December 31, 2005. These consolidated financial statements
are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated
financial statements based on our audits. We did not audit the
financial statements of PT Telekomunikasi Selular
("Telkomsel"), a 65 percent-owned subsidiary, for the
year ended December 31, 2003, which financial statements reflect
total revenues constituting 40 percent of the related
consolidated total. Those financial statements, which were
prepared on the basis of accounting principles generally
accepted in Indonesia, were audited by other auditors whose
report has been furnished to us, and our opinion, insofar as it
relates to the 2003 amounts included for Telkomsel, including
information relating to the nature and effect of differences
between accounting principles generally accepted in Indonesia
and accounting principles generally accepted in the United
States of America, is based solely on the report of the other
auditors.
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States) and
auditing standards generally accepted in Indonesia. Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits and the
report of other auditors provide a reasonable basis for our
opinion.
In our opinion, based on our audits and the report of other
auditors, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of Perusahaan Perseroan (Persero) PT Telekomunikasi
Indonesia Tbk. and subsidiaries as of December 31, 2004 and
2005, and the results of their operations and their cash flows
for each of the years in the three-year period ended
December 31, 2005, in conformity with accounting principles
generally accepted in Indonesia.
As discussed in Note 4 to the consolidated financial
statements, the Company adopted the provisions of PSAK No. 24
(Revised 2004), "Employee Benefits," and PSAK
No. 38 (Revised 2004), "Accounting for Restructuring
Transactions between Entities under Common Control," in
2005.
The consolidated financial statements as of and for the year
ended December 31, 2004, have been restated to reflect the
adoption of PSAK No. 24 (Revised 2004).
Accounting principles generally accepted in Indonesia vary in
certain significant respects from accounting principles
generally accepted in the United States of America. Information
relating to the nature and effect of such differences is
presented in Note 54 to the consolidated financial statements.
F-2
Table of Contents
The accompanying consolidated financial statements as of and for
the year ended December 31, 2005, have been translated into
United States Dollars solely for the convenience of the reader.
We have audited the translation and, in our opinion, the
consolidated financial statements expressed in Indonesian Rupiah
have been translated into dollars on the basis as set forth in
Note 3 to the consolidated financial statements.
Kantor Akuntan Publik Siddharta Siddharta & Widjaja
Member Firm of KPMG International
License No.: KEP-232/KM.6/2002
Lucas Kurniawan, BAP
Public Accountant License No. 04.1.0934
Jakarta-Indonesia, June 8, 2006, except for
Note 54, as to which the date is June 16, 2006.
F-3
Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE STOCKHOLDERS OF
PT TELEKOMUNIKASI SELULAR AND SUBSIDIARY
We have audited the accompanying consolidated statements of
income, changes in stockholders' equity and cash flows of
PT Telekomunikasi Selular (the "Company") and its
subsidiary (collectively the "Group") for the year
ended December 31, 2003. These consolidated financial
statements are the responsibility of the Group's
management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audit.
We conducted our audit in accordance with auditing standards
established by the Indonesian Institute of Accountants and the
standards of the Public Company Accounting Oversight Board
(United States). These standards require that we plan and
perform the audit to obtain reasonable assurance that the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by the management, as well as
evaluating the overall presentation of the financial statements.
We believe that our audit provide a reasonable basis for our
opinion.
In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the
consolidated results of their operations, and consolidated cash
flows of the Group for the year ended December 31, 2003, in
conformity with generally accepted accounting principles in
Indonesia.
Accounting principles generally accepted in Indonesia vary in
certain significant respects from accounting principles
generally accepted in the United States of America. Information
relating to the nature and effect of such differences is
presented in Notes 34 and 35 to the consolidated financial
statements.
JAKARTA
April 8, 2004
Drs. Irhoan Tanudiredja BAP
License of Public Accountant No. 99.1.0683
F-4
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah and
thousands of United States Dollars)
ASSETS
Notes
2004
2005
Rp
Rp
US$ (Note 3)
(As restated)
CURRENT ASSETS
Cash and cash equivalents
2c,2f,6,45
4,856,123
5,374,684
546,763
Temporary investments
2c,2g,45
19,949
22,064
2,245
Trade accounts receivable
2c,2h,7,45
Related parties — net of allowance for doubtful
    accounts of Rp64,928 million in 2004 and
    Rp84,275 million in 2005
419,104
530,370
53,954
Third parties — net of allowance for doubtful accounts
    of Rp457,138 million in 2004 and Rp601,393 million in
    2005
2,899,999
3,047,539
310,024
Other accounts receivable — net of allowance for
    doubtful accounts of Rp9,236 million in 2004 and
    Rp4,402 million in 2005
2c,2h,45
55,769
153,247
15,589
Inventories — net of allowance for obsolescence of
    Rp54,733 million in 2004 and Rp48,347 million in 2005
2i,8
203,085
220,327
22,413
Prepaid expenses
2c,2j,9,45
628,069
777,869
79,132
Prepaid taxes
39a
77,228
18,913
1,924
Other current assets
2c,10,45
44,608
159,537
16,230
Total Current Assets
9,203,934
10,304,550
1,048,274
NON-CURRENT ASSETS
Long-term investments — net
2g,11
82,613
101,400
10,315
Property, plant and equipment — net of accumulated
    depreciation of Rp29,297,163 million in 2004 and
    Rp37,092,663 million in 2005
2k,2l,12
39,572,099
45,643,243
4,643,260
Property, plant and equipment under revenue-sharing
    arrangements — net of accumulated depreciation of
    Rp694,570 million in 2004 and Rp458,234 million in 2005
2m,13,48
499,127
549,405
55,891
Prepaid pension benefit costs
2q,42
1,362
640
65
Advances and other non-current assets
2c,14,45
1,372,351
946,037
96,240
Goodwill and other intangible assets — net of
    accumulated amortization of Rp1,846,034 million in 2004 and
    Rp2,764,187 million in 2005
1c,2d,15
5,411,425
4,493,272
457,098
Escrow accounts
16,45
36,281
132,497
13,479
Total Non-current Assets
46,975,258
51,866,494
5,276,348
TOTAL ASSETS
56,179,192
62,171,044
6,324,622
See accompanying notes to consolidated financial statements,
which form an integral part of the consolidated financial
statements.
F-5
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS — (Continued)
AS OF DECEMBER 31, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah and
thousands of United States Dollars)
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes
2004
2005
Rp
Rp
US$ (Note 3)
(As restated)
CURRENT LIABILITIES
Trade accounts payable
2c,17,45
Related parties
643,094
1,014,389
103,193
Third parties
3,611,456
4,281,285
435,533
Other accounts payable
5,073
6,677
679
Taxes payable
2r,39b
1,592,479
2,469,765
251,248
Dividends payable
62,689
3,276
333
Accrued expenses
2c,18,45
1,051,366
1,521,247
154,756
Unearned income
19
1,030,000
1,592,718
162,026
Advances from customers and suppliers
278,430
223,086
22,694
Short-term bank loans
2c,20,45
1,101,633
173,800
17,681
Current maturities of long-term liabilities
2c,21,45
2,300,822
2,226,925
226,544
Total Current Liabilities
11,677,042
13,513,168
1,374,687
NON-CURRENT LIABILITIES
Deferred tax liabilities — net
2r,39e
2,927,567
2,391,810
243,317
Unearned income on revenue-sharing arrangements
2m,13,48
360,332
425,484
43,284
Unearned initial investor payments under joint operation scheme
2n,47
20,453
7,311
744
Accrued long service awards
2c,2q,43,45
449,841
524,524
53,360
Accrued post-retirement health care benefits
2c,2q,44,45
2,983,707
3,048,021
310,073
Accrued pension and other post-retirement benefit costs
42
1,479,918
1,330,664
135,368
Long-term liabilities — net of current maturities
Two-step loans — related party
2c,22,45
5,363,283
4,760,199
484,252
Notes and bonds
23
2,331,465
1,456,669
148,186
Bank loans
2c,24,45
1,775,799
1,752,104
178,240
Liabilities of business acquisitions
25
3,743,317
3,127,959
318,205
Obligations under capital leases
2l,12
—
235,537
23,961
Total Non-current Liabilities
21,435,682
19,060,282
1,938,990
MINORITY INTEREST
26
4,938,432
6,305,193
641,423
STOCKHOLDERS' EQUITY
Capital stock — Rp250 par value per Series A
Dwiwarna share and Series B share
Authorized — one Series A Dwiwarna share and
    79,999,999,999 Series B shares
Issued and fully paid — one Series A Dwiwarna
    share and 20,159,999,279 Series B shares
1b,27
5,040,000
5,040,000
512,716
Additional paid-in capital
28
1,073,333
1,073,333
109,190
Difference in value of restructuring transactions between
    entities under common control
29
(7,288,271
)
90,000
9,156
Difference due to change of equity in associated companies
2g
385,595
385,595
39,226
Unrealized holding gain (loss) on available-for-sale securities
2g
884
(748
)
(76
)
Translation adjustment
2g
229,595
233,253
23,729
Retained earnings
Appropriated
1,680,813
1,803,397
183,458
Unappropriated
17,006,087
14,667,571
1,492,123
Total Stockholders' Equity
18,128,036
23,292,401
2,369,522
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
56,179,192
62,171,044
6,324,622
See accompanying notes to consolidated financial statements,
which form an integral part of the consolidated financial
statements.
F-6
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah and
thousands of United States Dollars, except per share and per ADS
data)
Notes
2003
2004
2005
Rp
Rp
Rp
US$ (Note 3)
(As restated)
OPERATING REVENUES
Telephone
2p,30
Fixed lines
8,896,865
10,645,021
10,781,252
1,096,770
Cellular
8,458,830
10,421,298
14,570,958
1,482,295
Interconnection
2p,31,45
4,162,148
6,187,981
7,742,084
787,598
Joint operation schemes
2n,32,47
1,486,307
656,614
588,647
59,883
Data and Internet
33
3,108,562
4,808,742
6,934,324
705,425
Network
34
517,865
654,309
586,636
59,678
Revenue-sharing arrangements
2m,35,48
258,464
280,576
302,282
30,751
Other telecommunications services
226,882
293,225
301,001
30,620
Total Operating Revenues
27,115,923
33,947,766
41,807,184
4,253,020
OPERATING EXPENSES
Personnel
36
4,440,096
4,909,965
6,563,047
667,655
Depreciation
2k,2l,2m,12,13
4,779,520
6,438,557
7,570,739
770,167
Write-down of assets
2k,12
—
—
616,768
62,743
Loss on procurement commitments
12
—
—
79,359
8,073
Operations, maintenance and telecommunication services
37
3,338,693
4,529,587
5,916,341
601,866
General and administrative
38
2,078,777
2,599,847
2,763,951
281,175
Marketing
502,898
881,930
1,126,229
114,571
Total Operating Expenses
15,139,984
19,359,886
24,636,434
2,506,250
OPERATING INCOME
11,975,939
14,587,880
17,170,750
1,746,770
OTHER INCOME (EXPENSES)
Interest income
45
366,024
317,941
344,686
35,065
Interest expense
45
(1,383,446
)
(1,270,136
)
(1,177,268
)
(119,763
)
Gain (loss) on foreign exchange — net
2e
126,121
(1,220,760
)
(516,807
)
(52,574
)
Equity in net income of associated companies
2g,11
2,819
3,420
10,879
1,107
Others — net
364,338
331,050
409,184
41,626
Other income (expenses) — net
(524,144
)
(1,838,485
)
(929,326
)
(94,539
)
INCOME BEFORE TAX
11,451,795
12,749,395
16,241,424
1,652,231
TAX EXPENSE
2r,39c
Current tax
(3,791,280
)
(4,267,111
)
(5,719,644
)
(581,856
)
Deferred tax
(69,810
)
88,585
535,757
54,502
(3,861,090
)
(4,178,526
)
(5,183,887
)
(527,354
)
INCOME BEFORE MINORITY INTEREST IN NET INCOME OF SUBSIDIARIES
7,590,705
8,570,869
11,057,537
1,124,877
MINORITY INTEREST IN NET INCOME OF SUBSIDIARIES, net
26
(1,503,478
)
(1,956,301
)
(3,063,971
)
(311,696
)
NET INCOME
6,087,227
6,614,568
7,993,566
813,181
BASIC EARNINGS PER SHARE
2s,40
Net income per share
301.95
328.10
396.51
0.04
Net income per ADS
(40 Series B shares per ADS)
12,077.83
13,124.14
15,860.25
1.61
See accompanying notes to consolidated financial statements,
which form an integral part of the consolidated financial
statements.
F-7
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'
EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah and
thousands of United States Dollars)
Difference in
Value of
Restructuring
Difference
Transactions
Due to Change
Additional
Between Entities
of Equity in
Retained Earnings
Total
Capital
Paid-in
Under Common
Associated
Translation
Stockholders'
Description
Notes
Stock
Capital
Control
Companies
Adjustment
Appropriated
Unappropriated
Equity
Rp
Rp
Rp
Rp
Rp
Rp
Rp
Rp
Balance as of January 1, 2003
5,040,000
1,073,333
(7,288,271
)
424,020
235,665
745,404
14,383,466
14,613,617
Reclassification to the statement of income as a result of
    disposal of investment in Metrosel
11
—
—
—
(38,425
)
—
—
—
(38,425
)
Foreign currency translation of CSM
2g
—
—
—
—
(11,433
)
—
—
(11,433
)
Resolved during the Annual General Meeting of the Stockholders
    on May 9, 2003
Declaration of cash dividends
41
—
—
—
—
—
—
(3,338,109
)
(3,338,109
)
Appropriation for general reserve
41
—
—
—
—
—
813,664
(813,664
)
—
Net income for the year
—
—
—
—
—
—
6,087,227
6,087,227
Balance as of December 31, 2003
5,040,000
1,073,333
(7,288,271
)
385,595
224,232
1,559,068
16,318,920
17,312,877
See accompanying notes to consolidated financial statements,
which form an integral part of the consolidated financial
statements.
F-8
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'
EQUITY — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah and
thousands of United States Dollars)
Difference in
Value of
Restructuring
Difference
Transactions
Due to Change
Unrealized
Additional
Between Entities
of Equity in
Holding Gain on
Retained Earnings
Total
Capital
Paid-in
Under Common
Associated
Available-for-Sale
Translation
Stockholders'
Description
Notes
Stock
Capital
Control
Companies
Securities
Adjustment
Appropriated
Unappropriated
Equity
Rp
Rp
Rp
Rp
Rp
Rp
Rp
Rp
Rp
Balance as of January 1, 2004
5,040,000
1,073,333
(7,288,271
)
385,595
—
224,232
1,559,068
16,318,920
17,312,877
Cumulative effect due to change in method of accounting for
    employee benefits, net of tax effect of Rp600,059 million
2q,4
—
—
—
—
—
—
—
(2,618,665
)
(2,618,665
)
Balance as of January 1, 2004, as restated
5,040,000
1,073,333
(7,288,271
)
385,595
—
224,232
1,559,068
13,700,255
14,694,212
Unrealized holding gain on available- for-sale securities
2g
—
—
—
—
884
—
—
—
884
Foreign currency translation of CSM
2g,11
—
—
—
—
—
5,363
—
—
5,363
Resolved during the Annual General Meeting of the Stockholders
    on July 30, 2004 Declaration of cash dividends
41
—
—
—
—
—
—
—
(3,043,614
)
(3,043,614
)
Appropriation for general reserve
41
—
—
—
—
—
—
121,745
(121,745
)
—
Declaration of interim cash dividends
—
—
—
—
—
—
—
(143,377
)
(143,377
)
Net income for the year
—
—
—
—
—
—
—
6,614,568
6,614,568
Balance as of December 31, 2004, as restated
5,040,000
1,073,333
(7,288,271
)
385,595
884
229,595
1,680,813
17,006,087
18,128,036
See accompanying notes to consolidated financial statements,
which form an integral part of the consolidated financial
statements.
F-9
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'
EQUITY — (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah and
thousands of United States Dollars)
Difference in
Value of
Restructuring
Difference
Unrealized
Transactions
Due to
Holding Gain
Between Entities
Change of Equity
(Loss) on
Retained Earnings
Total
Capital
Additional
Under Common
in Associated
Available-for-Sale
Translation
Stockholders'
Description
Notes
Stock
Paid-in Capital
Control
Companies
Securities
Adjustment
Appropriated
Unappropriated
Equity
Rp
Rp
Rp
Rp
Rp
Rp
Rp
Rp
Rp
Balance as of January 1, 2005, as restated
5,040,000
1,073,333
(7,288,271
)
385,595
884
229,595
1,680,813
17,006,087
18,128,036
Change in method of accounting for restructuring transactions
    between entities under common control
4
—
—
7,288,271
—
—
—
—
(7,288,271
)
—
Unrealized holding loss on available- for-sale securities
2g
—
—
—
—
(1,632
)
—
—
—
(1,632
)
Foreign currency translation of CSM
2g,11
—
—
—
—
—
3,658
—
—
3,658
Compensation for early termination of exclusive rights
29
—
—
90,000
—
—
—
—
—
90,000
Resolved during the Annual General Meeting of the Stockholders
    on June 24, 2005
Declaration of cash dividends
41
—
—
—
—
—
—
—
(2,921,227
)
(2,921,227
)
Appropriation for general reserve
41
—
—
—
—
—
—
122,584
(122,584
)
—
Net income for the year
—
—
—
—
—
—
—
7,993,566
7,993,566
Balance as of December 31, 2005
5,040,000
1,073,333
90,000
385,595
(748
)
233,253
1,803,397
14,667,571
23,292,401
See accompanying notes to consolidated financial statements,
which form an integral part of the consolidated financial
statements.
F-10
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah and
thousands of United States Dollars)
2003
2004
2005
Rp
Rp
Rp
US$ (Note 3)
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from operating revenues
Telephone
Fixed lines
8,201,928
10,084,558
10,668,915
1,085,342
Cellular
8,925,503
10,497,763
14,825,437
1,508,183
Interconnection — net
4,203,802
5,766,444
7,403,322
753,136
Joint operation schemes
1,195,563
547,487
614,652
62,528
Data and Internet
2,213,391
4,973,559
6,952,323
707,256
Other services
1,718,693
1,689,941
1,445,668
147,067
Total cash receipts from operating revenues
26,458,880
33,559,752
41,910,317
4,263,512
Cash payments for operating expenses
(8,861,797
)
(12,270,643
)
(14,954,742
)
(1,521,337
)
Cash generated from operations
17,597,083
21,289,109
26,955,575
2,742,175
Interest received
369,982
321,677
341,848
34,776
Income tax paid
(3,905,317
)
(4,132,359
)
(4,938,916
)
(502,433
)
Interest paid
(1,178,332
)
(1,348,919
)
(1,200,484
)
(122,125
)
Cash refund to customers and advances
(30,884
)
(78,028
)
(55,343
)
(5,630
)
Net Cash Provided by Operating Activities
12,852,532
16,051,480
21,102,680
2,146,763
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of temporary investments and maturity of time
    deposits
1,895,199
285,264
227,633
23,157
Purchase of temporary investments and placements in time deposits
(679,500
)
(404,268
)
(226,054
)
(22,996
)
Proceeds from sale of property, plant and equipment
255,750
67,196
84,621
8,608
Proceeds from insurance claim
—
—
27,580
2,806
Acquisition of property, plant and equipment
(9,007,186
)
(8,568,862
)
(12,106,930
)
(1,231,631
)
Payment of advances for the purchase of property,plant and
    equipment
—
(1,063,382
)
(212,187
)
(21,586
)
Decrease in advances and others
96,830
123,026
874
89
Acquisition of businesses, net of cash acquired
141,985
(27,797
)
(4,000
)
(407
)
Payments of advances for investments in shares of stock
(14,338
)
—
—
—
Acquisition of long-term investments
—
(9,290
)
(4,250
)
(432
)
Sale of long-term investments
5,398
—
—
—
Net Cash Used in Investing Activities
(7,305,862
)
(9,598,113
)
(12,212,713
)
(1,242,392
)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash dividends paid
(3,336,582
)
(3,129,225
)
(2,980,640
)
(303,219
)
Cash dividends paid to minority shareholders of subsidiaries
(402,004
)
(682,366
)
(1,694,261
)
(172,356
)
Increase in escrow accounts
(1,497,462
)
(1,341,546
)
(96,216
)
(9,788
)
Proceeds from (repayments of) short-term borrowings
(39,205
)
1,062,183
(994,709
)
(101,191
)
Payments for debt issuance cost
—
(2,394
)
—
—
Proceeds from Medium-term Notes
—
1,080,000
—
—
Repayments of Medium-term Notes
—
—
(470,000
)
(47,813
)
Redemption of Telkomsel's notes
(160,509
)
(504,101
)
(780,565
)
(79,406
)
Proceeds from long-term borrowings
720,591
2,386,748
569,995
57,985
Repayments of long-term borrowings
(1,222,424
)
(5,734,156
)
(1,723,126
)
(175,293
)
Repayments of promissory notes
(239,821
)
(40,008
)
(164,186
)
(16,703
)
Repayments of obligations under capital leases
—
—
(5,643
)
(574
)
Net Cash Used in Financing Activities
(6,177,416
)
(6,904,865
)
(8,339,351
)
(848,358
)
F-11
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS —
(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah and
thousands of United States Dollars)
2003
2004
2005
Rp
Rp
Rp
US$ (Note 3)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
(630,746
)
(451,498
)
550,616
56,013
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
26,148
213,149
(32,055
)
(3,261
)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
5,699,070
5,094,472
4,856,123
494,011
CASH AND CASH EQUIVALENTS AT END OF YEAR
5,094,472
4,856,123
5,374,684
546,763
SUPPLEMENTAL CASH FLOW INFORMATION
Noncash investing and financing activities:
Increase in property under construction through the incurrence
    of long-term debt
536,248
—
—
—
Payment of insurance premium through the incurrence of long-term
    debt
81,186
11,658
—
—
Conversion of receivables to long-term investments
13,500
—
—
—
Acquisition of subsidiary through the issuance of Promissory
    Notes
927,273
—
—
—
Acquisition of minority interest through the issuance of
    Promissory Notes
—
126,692
—
—
Acquisition of business through the incurrence of long-term
    liability
—
3,257,566
—
—
Acquisition of property, plant and equipment through capital
    leases
—
—
257,380
26,183
See accompanying notes to consolidated financial statements,
which form an integral part of the consolidated financial
statements.
F-12
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
1.
GENERAL
a.
Establishment and General Information
Perusahaan Perseroan (Persero) P.T. Telekomunikasi
Indonesia Tbk (the "Company") was originally 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 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 deed of establishment was
approved by the Minister of Justice of the Republic of Indonesia
in his decision letter No. C2-6870.HT.01.01.Th.1991 dated
November 19, 1991, and was published in State Gazette of
the Republic of Indonesia No. 210 dated January 17,
1992, Supplement No. 5. The articles of association have
been amended several times, the most recent amendment was made
through deed No. 4 dated April 6, 2006, of Notary A.
Partomuan Pohan, S.H., LLM., among others, to amend the
directors' authorities and responsibilities.
In accordance with article 3 of its articles of association, the
scope of the Company's activities is as follows:
1. The Company's objective is to provide
    telecommunications and information facilities and services, in
    accordance with prevailing regulations.
2. To achieve the above objective, the Company is involved
    in the following activities:
i. Planning, building, providing, developing, operating,
    marketing or selling, leasing and maintaining telecommunications
    and information networks in accordance with prevailing
    regulations.
ii. Planning, developing, providing, marketing or selling
    and improving telecommunications and information services in
    accordance with prevailing regulations.
iii. Performing activities and other undertakings in
    connection with the utilization and development of the
    Company's resources and optimizing the utilization of the
    Company's property, plant and equipment, information
    systems, education and training, and repairs and maintenance
    facilities.
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,
in 1995, the Company entered into agreements with investors to
develop, manage and operate telecommunications facilities in
five of the Company's seven regional divisions under Joint
Operation Schemes (known as "Kerja Sama Operasi" or
"KSO").
The Company's head office is located at Jalan Japati
No. 1, Bandung, West Java.
Pursuant to Law No. 3/1989 on Telecommunications which took
effect on April 1, 1989, Indonesian legal entities are
allowed to provide basic telecommunications services in
cooperation with
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
the Company as the domestic telecommunications organizing body
(or "badan penyelenggara"). Government
Regulation No. 8/1993, concerning the provision of
telecommunications services, further regulates that cooperation
to provide basic telecommunications services can be in the form
of joint venture, joint operation or contract management 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 ("MTPT"), through two decision
letters both dated August 14, 1995, reaffirmed the status
of the Company as the organizing body for the provision of
domestic telecommunications services.
Further, effective from January 1, 1996, the Company was
granted the exclusive right to provide local wireline and fixed
wireless services for a minimum period of 15 years and the
exclusive right to provide domestic long-distance
telecommunications 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 KSO. This grant of rights does not affect the
Company's right to provide other domestic
telecommunications services.
Under Law No. 36/1999 on Telecommunications, which took
effect from September 2000, telecommunications activities cover:
i. Telecommunications networks
ii. Telecommunications services
iii. Special telecommunications
National state-owned companies, regional state-owned companies,
privately-owned companies and cooperatives are allowed to
provide telecommunications networks and services. Special
telecommunications can be provided by individuals, government
agencies and legal entities other than telecommunications
networks and service providers.
Under Law No. 36/1999, activities that result in
monopolistic practices and unfair competition are prohibited. In
connection with this law, Government
Regulation No. 52/2000 was issued, which provides that
interconnection fees shall be charged to originating
telecommunications network operators where telecommunications
service is provided by two or more telecommunications network
operators.
Based on press release No. 05/ HMS/ JP/ VIII/2000 dated
August 1, 2000 from the Director General of Post and
Telecommunications and the correction thereto No. 1718/ UM/
VIII/2000 dated August 2, 2000, the period of exclusive
rights granted to the Company to provide local and domestic
long-distance fixed-line telecommunications services, which
initially would expire in December 2010 and December 2005,
respectively, was shortened to expire in August 2002 and August
2003, respectively. In return, the Government is required to pay
compensation to the Company (Note 29).
Based on a press release from the Coordinating Minister of
Economics dated July 31, 2002, the Government decided to
terminate the Company's exclusive rights as a network
provider for local and long-distance services with effect from
August 1, 2002. On August 1, 2002, PT Indonesian
Satellite
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Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
Corporation Tbk ("Indosat") was granted a license to
provide local and long-distance telecommunications services.
On May 13, 2004, pursuant to the Ministry of Communications
Decree No. KP. 162/2004, the Company was granted a commercial
license to provide International Direct Dialing
(IDD) services.
Based on the resolution of the Extraordinary General Meeting of
Stockholders, the minutes of which have been notarized by deed
No. 4 dated March 10, 2004 of A. Partomuan Pohan,
S.H., LLM., the composition of the Company's Board of
Commissioners and Board of Directors as of December 31,
2004 was as follows:
President Commissioner
:
Tanri Abeng
Commissioner
:
Anggito Abimanyu
Commissioner
:
Gatot Trihargo
Independent Commissioner
:
Arif Arryman
Independent Commissioner
:
Petrus Sartono
President Director
:
Kristiono
Director of Finance
:
Rinaldi Firmansyah
Director of Telecommunications Service Business
:
Suryatin Setiawan
Director of Human Resources and Support Business
:
Woeryanto Soeradji
Director of Telecommunications Network Business
:
Abdul Haris
Based on the resolution of the Annual General Meeting of
Stockholders, the minutes of which have been summarized by deed
No. 36 dated June 24, 2005 of A. Partomuan Pohan,
S.H., LLM., the composition of the Company's Board of
Commissioners and Board of Directors as of December 31,
2005 was as follows:
President Commissioner
:
Tanri Abeng
Commissioner
:
Anggito Abimanyu
Commissioner
:
Gatot Trihargo
Independent Commissioner
:
Arif Arryman
Independent Commissioner
:
Petrus Sartono
President Director
:
Arwin Rasyid
Vice President Director/ Chief Operating Officer
:
Garuda Sugardo
Director of Finance
:
Rinaldi Firmansyah
Director of Network and Solution
:
Abdul Haris
Director of Enterprise and Wholesale
:
Arief Yahya
Director of Human Resources
:
John Welly
Director of Consumer
:
Guntur Siregar
As of December 31, 2004 and 2005, the Company had 29,375
employees and 28,179 employees, respectively, while the
subsidiaries had 5,282 employees and 5,825 employees,
respectively.
b.
Public offering of shares of the Company
The Company's total number of shares immediately prior to
its initial public offering was 8,400,000,000, which consisted
of 8,399,999,999 Series B shares and 1 Series A
Dwiwarna share, all of which were owned by the Government of the
Republic of Indonesia (the "Government"). On
F-15
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
November 14, 1995, the Government sold the Company's
shares through an initial public offering on the Jakarta Stock
Exchange and Surabaya Stock Exchange. The shares offered
consisted of 933,333,000 new Series B shares and
233,334,000 Series B shares owned by the Government. A
share offering was also conducted on the New York Stock Exchange
and London Stock Exchange for 700,000,000 Series B shares
owned by the Government, which were converted into 35,000,000
American Depositary Shares (ADS). Each ADS represented 20
Series B shares at that time.
In December 1996, the Government completed a block sale of
388,000,000 Series B shares, and later in 1997, distributed
2,670,300 Series B shares as an incentive to stockholders
who did not sell their shares within one year from the date of
the initial public offering. In May 1999, the Government sold
898,000,000 Series B shares.
Under Law No. 1/1995 on Limited Liability Companies, the
minimum total par value of the Company's issued shares of
capital stock must be at least 25% of the total par value of the
Company's authorized capital stock, or in the
Company's case Rp5,000,000 million. To comply with the
Law, it was resolved at the Annual General Meeting of
Stockholders on April 16, 1999 to increase the issued share
capital by way of capitalization of certain additional paid-in
capital. The bonus shares were distributed to the then existing
stockholders in August 1999.
In December 2001, the Government conducted another block sale of
1,200,000,000 shares or 11.9% of the total outstanding
Series B shares. In July 2002, the Government sold
312,000,000 shares or 3.1% of the total outstanding
Series B shares.
On July 30, 2004, the Annual General Meeting of
Stockholders, the minutes of which were notarized by deed
No. 26 dated July 30, 2004 of A. Partomuan Pohan,
S.H., LLM., resolved to decrease the par value of the
Company's shares from Rp500 to Rp250 by means of a
2-for-1
stock split.
The Series A Dwiwarna share with par value of Rp500 was
split to one Series A Dwiwarna share with par value of
Rp250 and one Series B share with par value of Rp250. As a
result of the stock split, the Company's authorized capital
stock increased from one Series A Dwiwarna share and
39,999,999,999 Series B shares to one Series A
Dwiwarna share and 79,999,999,999 Series B shares, and the
Company's issued capital stock increased from one
Series A Dwiwarna share and 10,079,999,639 Series B
shares to one Series A Dwiwarna share and 20,159,999,279
Series B shares. After the stock split, each ADS
represented 40 Series B shares.
Based on the resolution of the Extraordinary General Meeting of
Stockholders on December 21, 2005, the Stockholders
authorized the plan to repurchase up to a maximum of 5% of the
Company's issued and outstanding Series B shares for a
total repurchase amount not exceeding Rp5,250,000 million.
As of June 2, 2006, the Company has repurchased
8,373,500 shares of the Company's issued and
outstanding Series B shares, representing less than 0.05%
of the Company's issued and outstanding Series B
shares, for a total repurchase amount of Rp61,4 billion
(US$6.2 million).
As of December 31, 2005, all of the Company's
Series B shares were listed on the Jakarta Stock Exchange
and Surabaya Stock Exchange and 37,414,543 ADS shares were
outstanding on either the New York Stock Exchange or London
Stock Exchange.
F-16
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
c.
Subsidiaries
The Company consolidates the following subsidiaries as a result
of majority ownership or its right to control operations.
Percentage of
Total Assets Before
Ownership
Start of
Eliminations
Commercial
Subsidiaries
Domicile
Nature of Business
2004
2005
Operations
2004
2005
%
%
PT Pramindo Ikat Nusantara
Medan
Telecommunications
100
100
1995
1,604,405
1,356,634
construction & services
PT AriaWest International
Bandung
Telecommunications
100
100
1995
1,416,225
1,127,772
PT Multimedia Nusantara
Jakarta
Pay TV
100
100
1998
22,116
53,738
PT Graha Sarana Duta
Jakarta
Real estate, construction
100
100
1982
69,227
101,910
and services
PT Dayamitra Telekomunikasi
Balikpapan
Telecommunications
100
100
1995
641,249
622,662
PT Indonusa Telemedia
Jakarta
Multimedia
90
96
1997
72,080
66,445
PT Telekomunikasi Selular
Jakarta
Telecommunications
65
65
1995
19,557,557
25,754,321
PT Napsindo Primatel Internasional
Jakarta
Telecommunications
60
60
1999
28,974
7,884
PT Infomedia Nusantara
Jakarta
Data and information
51
51
1984
333,738
376,160
service
PT Pro Infokom Indonesia
Jakarta
System information
51
—
2003
1,261
—
network
The Company has indirect investments through its subsidiaries in
the following companies:
Ownership
Percentage
Start of
Nature of
Commercial
Indirect Subsidiaries
Stockholders
Domicile
Business
2004
2005
Operations
%
%
Telekomunikasi Selular Finance Limited
PT Telekomunikasi
Mauritius
Fund raising
100
100
2002
Selular
Telkomsel Finance B.V
PT Telekomunikasi
Netherlands
Finance
—
100
2005
Selular
Aria West International Finance B.V
PT AriaWest
Netherlands
Finance
100
100
1996
International
PT Balebat Dedikasi Prima
PT Infomedia
Bogor
Printing
51
51
2000
Nusantara
F-17
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
PT Pramindo Ikat Nusantara ("Pramindo")
Pramindo is the investor in KSO I, the joint operating
scheme that provides telecommunications services in Sumatra. On
April 19, 2002, the Company entered into a Conditional Sale
and Purchase Agreement ("CSPA") (as amended on
August 1, 2002) to acquire 100% of the issued and
paid-up
share capital
of Pramindo. The Company acquired control of Pramindo on
August 15, 2002, the date when the Company entered into a
Stockholders Voting Agreement pursuant to which the Company
obtained the right to vote all Pramindo's shares and the
right to nominate all the members of the Board of Directors and
Board of Commissioners of Pramindo (Note 5b).
PT AriaWest International ("AWI")
AWI is the investor in KSO III, the joint operating scheme
that provides telecommunication services in West Java. On
May 8, 2002, the Company entered into a Conditional Sale
and Purchase Agreement ("CSPA") to acquire 100% of the
issued and
paid-up
capital of AWI. The acquisition was effective on July 31,
2003, the date when the Company entered into the First Amendment
to the Conditional Sale and Purchase Agreement with the
stockholders of AWI in which both parties agreed to the
Company's acquisition of AWI (Note 5c).
PT Multimedia Nusantara ("Metra")
Metra is engaged in providing pay television and multimedia
telecommunications services.
On July 21, 2005, the annual general meeting of
stockholders of Metra resolved to issue additional share capital
totaling Rp26,000 million to the Company. The Company paid
the entire amount on October 21, 2005.
PT Graha Sarana Duta ("GSD")
GSD is currently engaged primarily in leasing of offices as well
as providing building management and maintenance services.
On April 6, 2001, the Company acquired a 100% ownership
interest in GSD from Koperasi Mitra Duta and Dana Pensiun Bank
Duta, for a purchase consideration of Rp119,000 million.
This acquisition resulted in goodwill of Rp106,348 million
which is being amortized over a period of five years
(Note 15).
PT Dayamitra Telekomunikasi ("Dayamitra")
Dayamitra is the investor in KSO VI, the joint operating scheme
that provides telecommunications services in Kalimantan. The
Company's acquisition of a 90.32% ownership interest in
Dayamitra was effective on May 17, 2001, the date when the
Deed of Share Transfer was signed. The Company also entered into
an Option Agreement to acquire the remaining 9.68% interest from
the selling stockholders. On December 14, 2004, the Company
exercised the option to acquire the remaining
9.68% outstanding shares of Dayamitra by entering into a
Sale and Purchase Agreement with TM Communications
(HK) Ltd. (Note 5a).
F-18
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
PT Indonusa Telemedia ("Indonusa")
Indonusa is engaged in providing multimedia telecommunications
services.
On August 8, 2003, the Company increased its investment in
Indonusa from 57.5% to 88.08% through a share-swap agreement
with PT Centralindo Pancasakti Cellular ("CPSC")
(Note 11).
Pursuant to the extraordinary meeting of stockholders of
Indonusa on October 29, 2003, Indonusa agreed to convert
its payable to the Company amounting to Rp13,500 million to
1,350,000 shares of Indonusa. Following such conversion,
the Company's ownership in Indonusa increased from 88.08%
to 90.39%.
The Company purchased 5.29% of Indonusa's shares from PT
Megacell Media for Rp4,000 million, thereby increasing the
Company's ownership interest from 90.39% to 95.68% after
the settlement of payment on November 22, 2005.
PT Telekomunikasi Selular ("Telkomsel")
Telkomsel is engaged in providing telecommunications facilities
and mobile cellular services using Global System for Mobile
Communication ("GSM") technology on a nationwide basis.
The Company's cross-ownership transaction with Indosat in
2001 increased the Company's ownership interest in
Telkomsel to 77.72%.
On April 3, 2002, the Company entered into a Conditional
Sale and Purchase Agreement ("CSPA") with Singapore
Telecom Mobile Pte. Ltd. ("Singtel"). Pursuant to the
agreement, the Company sold 23,223 ordinary registered shares of
Telkomsel, representing 12.72% of the issued and
paid-up
capital of
Telkomsel for a total consideration of US$429.0 million
(equivalent to Rp3,948,945 million). This transaction
reduced the Company's ownership in Telkomsel from 77.72% to
65%.
PT Napsindo Primatel Internasional
    ("Napsindo")
Napsindo is engaged in providing "Network Access
Point" (NAP), "Voice Over Data" (VOD) and
other related services.
Based on the notarial deed No. 47 dated December 30,
2002 of Notary H. Yunardi, S.H., the Company purchased 28% of
Napsindo's shares from PT Info Asia Sukses Makmur Mandiri
for US$4.9 million (equivalent to Rp43,620 million),
thereby increasing the Company's ownership interest from
32% to 60% after the settlement of payment on January 28,
2003.
PT Infomedia Nusantara ("Infomedia")
Infomedia is engaged in providing telecommunications information
services and other information services in the form of print and
electronic media. In 2002, Infomedia established a new line of
business to provide call center services.
PT Pro Infokom Indonesia ("PII")
On January 29, 2003, the Company together with PT Indonesia
Comnets Plus, a subsidiary of Perusahaan Perseroan (Persero) PT
Perusahaan Listrik Negara ("PLN"), and PT Prima
Infokom Indonesia established PT Pro Infokom Indonesia
("PII"). The establishment was notarized by deed of
F-19
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
A. Partomuan Pohan, S.H., LLM., notary in Jakarta, under Article
of Association No. 24, dated January 29, 2003.
PII was established to develop a national information network
system as the back-bone for the development of the Indonesian
e-Government.
PII was
intended to maximize the utilization of both the Company's
and PLN's existing infrastructures.
On January 20, 2005, the Company sold its entire 51% equity
interest in PII to PT Prima Infokom Indonesia for
Rp471 million. The revenues and expenses of PII as well as
the related loss on the sale of the subsidiary were not
significant to the consolidated statement of income.
Telekomunikasi Selular Finance Limited
    ("TSFL")
Telkomsel has 100% direct ownership interest in TSFL, a company
established in Mauritius on April 22, 2002. TSFL's
objective is to raise funds for the development of
Telkomsel's business through the issuance of debenture
stock, bonds, mortgages or any other securities.
Telkomsel Finance B.V. ("TFBV")
TFBV, a wholly owned subsidiary of Telkomsel, was established in
Amsterdam (the Netherlands) on February 7, 2005, for the
purpose of borrowing, lending and raising funds, including
issuance of bonds, promissory notes or debt instruments.
Aria West International Finance B.V. ("AWI
    BV")
AWI BV, a company established in the Netherlands, is a wholly
owned subsidiary of AWI. AWI BV is engaged in rendering services
in the field of trade and finance.
PT Balebat Dedikasi Prima ("Balebat")
Infomedia has 51.33% direct ownership interest in Balebat, a
company engaged in the printing business, domiciled in Bogor.
d.
Authorization of the financial statements
The consolidated financial statements were authorized for issue
by the Board of Directors on June 8, 2006.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements of the Company and
subsidiaries have been prepared in accordance with accounting
principles generally accepted in Indonesia ("Indonesian
GAAP"). Indonesian GAAP varies in certain significant
respects from accounting principles generally accepted in the
United States of America (U.S. GAAP). Information relating
to the nature and effect of such differences is presented in
Note 54.
F-20
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
a.
Basis for preparation of financial
    statements
The consolidated financial statements, except for the statements
of cash flows, are prepared on the accrual basis of accounting.
The measurement basis used is historical cost, except for
certain accounts recorded on the basis described in the related
accounting policies.
The consolidated statements of cash flows are prepared using the
direct method and present the changes in cash and cash
equivalents from operating, investing and financing activities.
Figures in the consolidated financial statements are rounded to
and presented in millions of Indonesian Rupiah ("Rp"),
unless otherwise stated.
b.
Principles of consolidation
The consolidated financial statements include the financial
statements of the Company and its subsidiaries in which the
Company directly or indirectly has ownership of more than 50%,
or the Company has the ability to control the entity, even
though the ownership is less than or equal to 50%. Subsidiaries
are consolidated from the date on which effective control is
obtained and are no longer consolidated from the date of
disposal.
All significant inter-company balances and transactions have
been eliminated in consolidation.
c.
Transactions with related parties
The Company and subsidiaries have transactions with related
parties. The definition of related parties used is in accordance
with Indonesian Statement of Financial Accounting Standards
("PSAK") No. 7, "Related Party
Disclosures."
d.
Acquisitions of subsidiaries
The acquisition of a subsidiary from a third party is accounted
for using the purchase method of accounting. Intangible assets
acquired in a purchase business combination are amortized over
their respective contractual lives. The excess of the
acquisition cost over the Company's interest in the fair
value of identifiable assets acquired and liabilities assumed is
recorded as goodwill and amortized using the straight-line
method over a period of not more than five years.
The Company continually assesses whether events or changes in
circumstances have occurred that would require revision of the
remaining estimated useful life of intangible assets and
goodwill, or whether there is any indication of impairment. If
any indication of impairment exists, the recoverable amount of
intangible assets and goodwill is estimated based on the
expected future cash flows which are discounted to their present
value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to
the asset.
The acquisition transaction with entities under common control
is accounted for in a manner similar to that in pooling of
interests accounting (carryover basis). The difference between
the consideration paid or received and the related historical
carrying amount, after considering income tax effects, is
recognized directly in equity and reported as "Difference
in value of restructuring transactions between entities under
common control" in the stockholders' equity
section (See Note 4).
F-21
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
e.
Foreign currency translation
The functional currency of the Company and its subsidiaries is
the Indonesian Rupiah and the books of accounts of the Company
and its subsidiaries are maintained in Indonesian Rupiah.
Transactions in foreign currencies are translated into
Indonesian Rupiah at the rates of exchange prevailing at
transaction date. At the balance sheet date, monetary assets and
monetary liability balances denominated in foreign currencies
are translated into Indonesian Rupiah based on the buy and sell
rates quoted by Reuters prevailing at the balance sheet date.
The Reuters buy and sell rates, applied respectively to
translate monetary assets and monetary liability balances, were
Rp9,280 and Rp9,300 to US$1 as of December 31, 2004, and
Rp9,825 and Rp9,835 to US$1 as of December 31, 2005.
The resulting foreign exchange gains or losses, realized and
unrealized, are credited or charged to income of the current
year, except for foreign exchange differences incurred on
borrowings during the construction of qualifying assets which
are capitalized to the extent that the borrowings can be
attributed to the construction of those qualifying assets
(Note 2k).
f.
Cash and cash equivalents
Cash and cash equivalents consist of cash on hand and in banks
and all unrestricted time deposits with maturities of not more
than three months from the date of placement.
g.
Investments
i.
Time deposits
Time deposits with maturities of more than three months are
presented as temporary investments.
ii.
Investments in securities
Investments in available-for-sale securities are stated at fair
value. Unrealized holding gains or losses on available-for-sale
securities are excluded from income of the current year and are
reported as a separate component in the stockholders'
equity section until realized. Realized gains or losses from the
sale of available-for-sale securities are recognized in the
income of the current year, and are determined on a
specific-identification basis. A decline in the fair value of
any available-for-sale securities below cost that is deemed to
be other-than-temporary is charged to income of the current year.
iii.
Investments in associated companies
Investments in shares of stock in which the Company has 20% to
50% of the voting rights, and over which the Company exerts
significant influence, but not control, over the financial and
operating policies are accounted for using the equity method.
Under this method, the Company recognizes the Company's
proportionate share in the income or loss of the associated
company from the date that significant influence commences until
the date that significant influence ceases. When the
Company's share of loss exceeds the carrying amount of the
associated company, the carrying amount is reduced to nil and
recognition of further losses is discontinued except to the
extent that the Company has guaranteed obligations of the
associated company or committed to provide further financial
support to the associated company.
F-22
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
On a continuous basis, but no less frequently than at the end of
each year, the Company evaluates the carrying amount of its
ownership interests in investee companies for possible
impairment. Factors considered in assessing whether an
indication of other-than-temporary impairment exists include the
achievement of business plan objectives and milestones including
cash flow projections and the results of planned financing
activities, the financial condition and prospects of each
investee company, the fair value of the ownership interest
relative to the carrying amount of the investment, the period of
time the fair value of the ownership interest has been below the
carrying amount of the investment and other relevant factors.
Impairment to be recognized is measured based on the amount by
which the carrying amount of the investment exceeds the fair
value of the investment. Fair value is determined based on
quoted market prices (if any), projected discounted cash flows
or other valuation techniques as appropriate.
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
directly in equity and are reported as "Difference due to
change of equity in associated companies" in the
stockholders' equity section. Differences previously
credited directly to equity as a result of equity transactions
in associated companies are released to the statement of income
upon the sale of an interest in the associate in proportion with
percentage of the interest sold.
The functional currency of PT Pasifik Satelit Nusantara and PT
Citra Sari Makmur is the U.S. Dollar. For the purpose of
reporting these investments using the equity method, the assets
and liabilities of these companies as of the balance sheet date
are translated into Indonesian Rupiah using the rates of
exchange prevailing at that date, while revenues and expenses
are translated into Indonesian Rupiah at the average rates of
exchange for the year. The resulting translation adjustments are
reported as part of "Translation adjustment" in the
stockholders' equity section.
iv.
Other investments
Investments in shares of stock with ownership interests of less
than 20% that do not have readily determinable fair values and
are intended for long-term investments are carried at cost and
are adjusted only for other-than-temporary decline in the value
of individual investments. Any such write-down is charged
directly to income of the current year.
h.
Trade and other accounts receivable
Trade and other accounts receivable are recorded net of an
allowance for doubtful accounts, based upon a review of the
collectibility of the outstanding amounts at the end of the
year. Accounts are written off against the allowance during the
period in which they are determined to be not collectible.
Trade and other accounts receivable are recorded at the invoiced
amount. The allowance for doubtful accounts is the
Company's best estimate of the amount of probable credit
losses in the Company's existing accounts receivable. The
Company determines the allowance based on historical write-off
experience. The Company reviews its allowance for doubtful
accounts monthly. Past due balances over 90 days for retail
customers are fully provided, and past due balance for
non-retail customers over a specified amount are reviewed
individually for collectibility. Account balances are charged
off against the allowance after all means of collection have
been exhausted and the potential for recovery is considered
remote. The Company does not have any off-balance sheet credit
exposure related to its customers.
F-23
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
i.
Inventories
Inventories, principally consist of components and modules,
which are transferred to Property, Plant and Equipment upon use.
Inventories also include Subscriber Identification Module
("SIM") card, Removable User Identity Module
("RUIM") card and prepaid voucher blanks.
Cost is determined using the weighted average method for
components, SIM card, RUIM card and prepaid voucher blanks, and
the specific-identification method for modules.
Allowance for obsolescence is primarily based on the estimated
forecast of future usage of these items.
j.
Prepaid expenses
Prepaid expenses are amortized over their beneficial periods
using the straight-line method.
k.
Property, plant and equipment — direct
    acquisitions
Property, plant and equipment directly acquired are stated at
cost, except for certain revalued assets, less accumulated
depreciation and impairment losses.
Property, plant and equipment, except land, are depreciated
using the straight-line method, based on the estimated useful
lives of the assets as follows:
Years
Buildings
20
Switching equipment
5-15
Telegraph, telex and data communication equipment
5-15
Transmission installation and equipment
5-20
Satellite, earth station and equipment
3-15
Cable network
5-15
Power supply
3-10
Data processing equipment
3-10
Other telecommunications peripherals
5
Office equipment
3-5
Vehicles
5-8
Other equipment
5
Land is stated at cost and is not depreciated.
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 based upon the greater
of its net selling price or value in use.
The cost of maintenance and repairs is expensed as incurred.
Expenditures, which extend the useful life of the asset or
result in increased future economic benefits such as increase in
capacity or improvement in the quality of output or standard of
performance, are capitalized and depreciated based on the
applicable depreciation rates.
F-24
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
When assets are retired or otherwise disposed of, their carrying
values and the related accumulated depreciation are eliminated
from the consolidated financial statements, and the resulting
gains or losses on the disposal or sale of property, plant and
equipment are recognized in the statement of income.
Computer software used for data processing is included in the
value of the associated hardware.
Property under construction is stated at cost until construction
is complete, at which time it is reclassified to the specific
property, plant and equipment account to which it relates.
During the construction period, borrowing costs, which include
interest expense and foreign exchange differences incurred to
finance the construction of the asset, are capitalized in
proportion to the average amount of accumulated expenditures
during the period. Capitalization of borrowing cost ceases when
the assets are ready for its intended use.
l.
Property, plant and equipment under capital
    leases
Property, plant and equipment acquired under capital leases are
stated at the present value of minimum lease payments. At
inception of the lease, a corresponding liability, which equals
to the present value of minimum lease payments, is also recorded
and subsequently reduced by the principal component of each
minimum lease payment. The interest component of each minimum
lease payment is recognized in the statement of income.
Leased assets are capitalized only if all of the following
criteria are met: (a) the lessee has an option to purchase
the leased asset at the end of the lease period at a price
agreed upon at the inception of the lease agreement, and
(b) the sum of periodic lease payments, plus the residual
value, will cover the acquisition price of the leased asset and
related interest, and (c) there is a minimum lease period
of at least 2 years.
Leased assets are depreciated using the same method and over the
same estimated useful lives used for directly acquired property,
plant and equipment.
m.
Revenue-sharing arrangements
The Company records assets under revenue-sharing agreements as
"Property, plant and equipment under revenue-sharing
arrangements" (with a corresponding initial credit to
"Unearned income on revenue-sharing arrangements"
presented in the Liabilities section of the balance sheet) based
on the costs incurred by the investors as agreed upon in the
contracts entered into between the Company and the investors.
Property, plant and equipment are depreciated over their
estimated useful lives using the straight-line method.
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 reclassified to the "Property, plant and
equipment" account.
Revenue earned under revenue-sharing arrangements is recognized
on the basis of the Company's share as provided in the
agreement.
F-25
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
n.
Joint operation schemes
Revenues from joint operation schemes include amortization of
the investor's initial payments, Minimum Telkom Revenues
("MTR") and the Company's share of Distributable
KSO Revenues ("DKSOR").
Unearned initial investor payments received as compensation from
the KSO Investors are presented net of all direct costs incurred
in connection with the KSO agreement and are amortized using the
straight-line method over the KSO period of 15 years
starting from January 1, 1996.
MTR are recognized on a monthly basis, based upon the contracted
MTR amount for the current year, in accordance with the KSO
agreement.
The Company's share of DKSOR is recognized on the basis of
the 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
Schemes", which supersedes paragraph 14 of PSAK
No. 35, "Accounting for Telecommunication Services
Revenue", the assets built by the KSO Investors under the
Joint Operation Schemes are recorded in the books of the KSO
Investors which operate the assets and are transferred to the
Company at the end of the KSO period or upon termination of the
KSO agreement.
o.
Deferred charges for landrights
Costs incurred to process and extend the landrights are deferred
and amortized using the straight-line method over the term of
the landrights.
p.
Revenue and expense recognition
i.
Fixed line telephone revenues
Revenues from fixed line installations are recognized at the
time the installations are placed in service. Revenues from
usage charges are recognized as customers incur the charges.
ii.
Cellular and fixed wireless telephone
    revenues
Revenues from service connections (connection fees) are
recognized as income at the time the connections occur. Revenues
from airtime (for cellular) and monthly subscription charges are
recognized as accessed and as earned. Revenues from prepaid card
customers, which consist of the sale of starter packs, also
known as SIM cards in the case of cellular and RUIM in the case
of fixed wireless telephone, and pulse reload vouchers, are
recognized as follows:
1. Sale of starter packs is recognized as revenue upon
    delivery of the starter packs to distributors, dealers or
    directly to customers.
2. Sale of pulse reload vouchers is recognized initially as
    unearned income and recognized proportionately as revenue based
    on successful calls made by the subscribers or whenever the
    unused stored value of the voucher has expired.
F-26
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
iii.
Interconnection revenues
Revenues from network interconnection with other domestic and
international telecommunications carriers are recognized as
incurred and are presented net of interconnection expenses.
Expenses are recognized on an accrual basis.
q.
Employee benefits
i.
Pension and post-retirement health care benefit
    plans
The Company's net obligations in respect of the defined
pension benefit and post-retirement health care benefit plans
are calculated at the present value of estimated future benefits
that the employees have earned in return for their service in
the current and prior periods, deducted by any plan assets. The
calculation is performed by an independent actuary using the
projected unit credit method.
ii.
Long service awards ("LSA")
The Company's employees are entitled to receive certain
cash awards based on length of service requirement. The benefits
are either paid at the time the employee reaches certain
anniversary dates during employment, upon retirement or at the
time of termination.
The Company's obligation with respect to LSA is calculated
by an independent actuary using the projected unit credit method.
iii.
Early retirement benefits
Early retirement benefits are accrued at the time the Company
makes a commitment to provide early retirement benefits as a
result of an offer made in order to encourage voluntary
redundancy. The Company is demonstrably committed to a
termination when, and only when, the Company has a detailed
formal plan for the early retirement and is without realistic
possibility of withdrawal.
r.
Income tax
The Company and subsidiaries apply the asset and liability
method of accounting for income tax. Under this method, deferred
tax assets and liabilities are recognized for temporary
differences between the financial and tax bases of assets and
liabilities at each reporting date. This method also requires
the recognition of future tax benefits, such as the benefit of
tax loss carryforwards, to the extent their realization is
probable. Deferred tax assets and liabilities are measured using
enacted tax rates at each reporting date which are expected to
apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled.
Income tax is charged or credited in the statement of income,
except to the extent that it relates to items recognized
directly in equity, such as difference in value of restructuring
transactions between entities under common control
(Note 2d) and effect of foreign currency translation
adjustment for certain investments in associated companies
(Note 2g.iii), in which case income tax is also charged or
credited directly to equity.
F-27
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
s.
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 40, the number of shares represented by
each ADS.
t.
Segment information
The Company and its subsidiaries' segment information is
presented based upon identified business segments. A business
segment is a distinguishable unit that provides different
products and services and is managed separately. Business
segment information is consistent with operating information
routinely reported to the Company's chief operating
decision maker.
Segment information is prepared in conformity with the
accounting policies adopted for preparing and presenting the
consolidated financial statements.
u.
Derivative instruments
Derivative transactions are accounted for in accordance with
PSAK 55, "Accounting for Derivative Instruments and Hedging
Activities" which requires that all derivative instruments
be recognized in the financial statements at fair value. To
qualify for hedge accounting, PSAK 55 requires certain criteria
to be met, including documentation required to have been in
place at the inception of the hedge.
Changes in fair value of derivative instruments that do not
qualify for hedge accounting are recognized in the statement of
income. If a derivative instrument is designated and qualify for
hedge accounting, changes in fair value of derivative
instruments are recorded as adjustments to the assets or
liabilities being hedged in the income of the current year or in
the stockholders' equity, depending on the type of hedge
transaction represented and the effectiveness of the hedge.
v.
Use of estimates
The preparation of the consolidated financial statements
requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of
the consolidated financial statements and the reported amounts
of revenues and expenses during the reporting period.
Significant items subject to such estimates and assumptions
include the carrying amount of property, plant and equipment and
intangible assets, valuation allowance for receivables and
obligations related to employee benefits. Actual results could
differ from those estimates.
3.
TRANSLATION OF RUPIAH INTO UNITED STATES DOLLARS
The consolidated financial statements are stated in Indonesian
Rupiah. The translations of Indonesian Rupiah amounts into
United States Dollars are included solely for the convenience of
the readers and have been made using the average of the market
buy and sell rates of Rp9,830 to US$1 published by Reuters on
December 31, 2005. The convenience translations should not
be construed as representations that the Indonesian Rupiah
amounts have been, could have been, or could in the future be,
converted into United States Dollars at this or any other rate
of exchange.
F-28
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
4.
CHANGES IN METHODS OF ACCOUNTING
a.
Employee Benefits
In June 2004, the Indonesian Financial Accounting Standards
Board issued PSAK No. 24 (Revised 2004), "Employee
Benefits" (PSAK 24R), which is a revision of PSAK
No. 24, "Accounting for Pension Benefits." PSAK
24R changes, for the Company, the method of accounting for its
employee benefit plans by requiring the vested portion of prior
service cost be immediately recognized and that the cumulative
unrecognized actuarial gain or loss exceeding ten percent of the
greater of the present value of the projected benefit obligation
and the fair value of plan assets be amortized over the expected
average remaining working lives of the employees participating
in the plan.
PSAK 24R requires the Company to adopt its provisions
retrospectively as of January 1, 2004, (the
"Transition Date") by way of the recognition of:
(i) a liability computed in accordance with the provisions
of PSAK 24R determined as of the Transition Date (the
"Transition Liability") and (ii) the difference
between the Transition Liability and the liability previously
recognized for employee benefits as of the same date pursuant to
then in effect accounting standards, as a cumulative effect of a
change in method of accounting in stockholders' equity.
Accordingly, the Company has restated its accompanying
consolidated balance sheet as of the Transition Date by
increasing its liability for employee benefits previously
reported by Rp3,218,724 million with a corresponding
decrease in consolidated stockholders' equity of
Rp2,618,665 million, net of tax of Rp600,059 million.
In addition, the adoption of PSAK 24R effective as of
January 1, 2004, has resulted in an increase to previously
reported net income for the year ended December 31, 2004 in
the amount of Rp485,359 million, net of tax of
Rp175,454 million.
The effects of this restatement on previously reported
consolidated financial statements as of and for the year ended
December 31, 2004 for the application of PSAK 24R is
summarized below. This restatement had no net effect on
previously reported net cash provided by operating activities,
net cash used in investing activities and net cash used in
financing activities in the consolidated statements of cash
flows.
As
Previously
Reported
As Restated
Balance sheet:
Assets:
Prepaid pension benefit costs
91,262
1,362
Total non-current assets
47,065,158
46,975,258
Total assets
56,269,092
56,179,192
Liabilities:
Deferred income tax liabilities — net
3,352,171
2,927,567
Accrued long service awards
572,303
449,841
Accrued post-retirement health care benefits
1,841,146
2,983,707
Accrued pension and other post-retirement benefits costs
32,007
1,479,918
Total non-current liabilities
19,392,276
21,435,682
F-29
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
As
Previously
Reported
As Restated
Stockholders' equity:
Retained earnings — unappropriated
19,139,393
17,006,087
Total stockholders' equity
20,261,342
18,128,036
Statement of income:
Operating expenses — personnel
5,570,778
4,909,965
Total operating expenses
20,020,699
19,359,886
Operating income
13,927,067
14,587,880
Income before tax
12,088,582
12,749,395
Tax expense
4,003,072
4,178,526
Net income
6,129,209
6,614,568
Net income per share — in full Rupiah amount
304.03
328.10
Net income per ADS — in full Rupiah amount
12,161.13
13,124.14
b.
Restructuring Transactions Between Entities Under
    Common Control
In July 2004, the Indonesian Financial Accounting Standards
Board issued PSAK No. 38 (Revised 2004), "Accounting
for Restructuring Transactions between Entities under Common
Control," ("PSAK 38R"). PSAK 38R changes the
Company's method of accounting for previously recorded
restructuring transactions between entities under common control
when certain conditions are met. The provisions of PSAK 38R
were effective for the Company beginning January 1, 2005,
the initial application date.
Pursuant to a ruling issued by the Indonesian Capital Market and
Financial Institution Supervisory Agency ("BAPEPAM")
regarding the initial application of PSAK 38R by public
entities, the Company is required to reclassify the previously
recorded difference in value of restructuring transactions
between entities under common control as a direct adjustment to
retained earnings as of the initial application date when the
common control relationship between the transacting parties no
longer exists as of January 1, 2005.
As discussed in Note 29, the difference in value of
restructuring transactions between entities under common control
as of January 1, 2005 amounting to Rp7,288,271 million
arose from transactions between the Company and Indosat, which
at the time of the transactions was also controlled by the
Government and therefore was an entity under common control with
the Company. This common control relationship ceased to exist in
December 2002 when the Government sold its 41.94% ownership
interest in Indosat to STT Communications Ltd.
("STTC") and waived its special voting rights with
respect to the Series A Dwiwarna share. In accordance with
the BAPEPAM ruling, the Company has reclassified the difference
in value of restructuring transactions between entities under
common control resulting from the cross-ownership transactions
and acquisition of Pramindo as a charge to retained earnings as
of January 1, 2005. This reclassification has no effect on
net consolidated stockholders' equity.
F-30
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
5.
ACQUISITION OF KSO INVESTORS AND KSO IV
a.
Dayamitra
In connection with the acquisition of 90.32% of the shares of
Dayamitra on May 17, 2001, the Company also entered into
the following agreements:
1. Option Agreement
The Company entered into an Option Agreement with TM
Communications (HK) Ltd ("TMC"), providing the
Company with an option to acquire the remaining 9.68% equity
interest in Dayamitra, referred to as the Option Share. Under
the agreement, TMC, the selling stockholder, granted the Company
an exclusive option to purchase full and legal title to the
Option Share (the "Call Option"), and the Company
granted the selling stockholder an exclusive option to sell to
the Company full legal title to those shares (the "Put
Option").
In consideration for the grant of the options, the Company paid
to the selling stockholder the option purchase price of
US$6.3 million plus US$1 million as payment for
Dayamitra's adjusted working capital, or a total of
US$7.3 million. The amount was payable in eight quarterly
installments of US$0.9 million beginning on August 17,
2001 and ending on May 17, 2003. Payments were made through
an escrow account established under the Escrow Agreement
discussed below.
The Company was entitled to exercise the option any time after
Dayamitra satisfied all of its obligations under the JBIC
(formerly J-Exim) loan beginning on May 17, 2003 and until
five business days prior to March 26, 2006. The strike
price payable by the Company to the selling stockholder for the
Option Shares upon exercise of the option was
US$16.2 million less certain amounts that are stipulated in
the Option Agreement.
Dayamitra repaid the JBIC loan and the JBIC loan agreement was
terminated on March 25, 2003.
On December 14, 2004, the Company exercised the option by
entering into a Sale and Purchase Agreement to acquire
TMC's 9.68% outstanding shares in Dayamitra with the
strike price of US$16.2 million which the payment will be
due on March 26, 2006. Payment of the strike price will be
made through an escrow account established under the Escrow
Agreement discussed below. The Company is required to deposit
US$12.6 million (representing the strike price of
US$16.2 million less funds available in the escrow account
on November 30, 2004 of US$2.4 million and withholding
tax of US$1.2 million) in sixteen monthly installments of
US$0.8 million beginning on December 26, 2004 through
March 26, 2006.
The purchase price for 9.68% outstanding shares of
Dayamitra was US$22.1 million or equivalent to
Rp203,028 million which represents the present value of the
option strike price (US$16.2 million) using a discount rate
of 7.5% at the acquisition date plus the option purchase price
(US$6.3 million) and payment for Dayamitra's adjusted
working capital (US$1 million). This additional acquisition
resulted in intangible assets of Rp231,477 million. The
amount is being amortized over the then remaining term of the
KSO agreement of 6 years (Note 15). There was no
goodwill arising from this additional acquisition. Had this
acquisition taken place on January 1 of the previous year,
consolidated net income would not have been significantly
different from the reported amounts.
As of December 31, 2004 and 2005, the remaining option
strike price to be paid to TMC, before unamortized discount,
amounted to US$15.0 million (equivalent
Rp139,752 million) and
F-31
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
US$15.0 million (equivalent Rp147,791 million) and is
presented as "Liabilities of business acquisitions"
(Note 25). As of March 27, 2006, the option strike
price has been fully repaid.
2. Escrow Agreement
An Escrow Agreement dated May 17, 2001, was entered into by
and among the Company, Dayamitra, PT Intidaya Sistelindomitra
("Intidaya"), Cable and Wireless plc ("C&W
plc"), PT Mitracipta Sarananusa ("Mitracipta"),
TMC, Tomen Corporation ("Tomen"), Citibank N.A.
Singapore (the Singapore Escrow Agent) and Citibank N.A. Jakarta
(the Jakarta Escrow Agent), to establish an Escrow Account and
facilitate the payment (Note 16).
b.
Pramindo
On April 19, 2002, the Company and the stockholders of
Pramindo, namely France Cables et Radio SA, PT Astratel
Nusantara, Indosat, Marubeni Corporation, International Finance
Corporation ("IFC") and NMP Singapore Pte. Ltd.
("NMP Singapore") (collectively the "Selling
Stockholders") entered into a Conditional Sale and Purchase
Agreement ("CSPA") pursuant to which the Company
acquired all of Pramindo's shares. The Selling Stockholders
shares were transferred to an escrow account (hereafter referred
as "escrow shares").
Legal title to the escrow shares was transferred to the Company
in three specific tranches on September 15,
2002 — 30%, September 30, 2003 — 15%
and on December 31, 2004 — 55% upon payment of
the promissory notes issued to the Selling Stockholders as
payment for the acquisition of the shares. The escrow shares can
be accessed by the Selling Stockholders only upon default on
payment of the promissory notes by the Company, and no dividends
can be paid out until the arrangements between the parties are
completed or terminated in accordance with the terms of the
relevant agreements.
The Company and the Selling Stockholders also entered into a
Stockholders Voting Agreement ("SVA") on
August 15, 2002, pursuant to which each stockholder of
Pramindo delivered to the Company a Power of Attorney
("PoA") whereby the Company obtained the right to vote
the escrow shares. The Company thereby acquired the right to
nominate all of the members of the Board of Directors and Board
of Commissioners of Pramindo. The SVA is subject to certain
reserve matters which serve as protective rights to the Selling
Stockholders.
The aggregate purchase price amounted to US$390.3 million
(Rp3,464,040 million) plus Rp250,000 million,
represented by an initial payment of approximately
US$9.3 million (Rp82,218 million), consultants'
fees of US$5.9 million (Rp52,818 million), working
capital reimbursement of Rp250,000 million, and the issue
by the Company of Promissory Notes (series I and
series II) with an aggregate face value of
US$375.1 million, of which the present value at the
discount rate of 8.76% at the effective date of the acquisition
was estimated to be US$332.8 million
(Rp2,953,617 million). The series I promissory notes
are non-interest bearing and the series II promissory notes
carry a market interest rate. The Promissory Notes are to be
paid in 10 unequal quarterly installments beginning
September 15, 2002 and are irrevocable, unconditional and
transferable.
The total purchase consideration was allocated first to the net
monetary assets and then the fixed assets acquired. An
intangible asset of Rp2,752,267 million was identified
representing the right to operate the business in the KSO Area.
The amount is being amortized over the then remaining term of
the KSO agreement of 8.4 years (Note 15). There was no
goodwill arising from this acquisition.
F-32
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
In addition, the portion that relates to Indosat's 13%
equity interest in Pramindo has been accounted for as a
restructuring of entities under common control (Note 29).
On the acquisition date, the difference between the purchase
consideration and the historical amount of the net assets
acquired amounting to Rp296,038 million was included as
"Difference in value of restructuring transactions between
entities under common control" in the stockholders'
equity section (see Note 29) and was calculated as follows:
Rp
Purchase consideration — net of discount on promissory
    notes
3,338,653
Historical amount of net assets
1,061,437
Difference in value for 100% ownership
2,277,216
Difference adjusted to stockholders' equity for
    Indosat's 13% ownership in Pramindo
296,038
The Company acquired control of Pramindo on August 15, 2002
and has consequently consolidated Pramindo from August 1,
2002 being the nearest convenient balance date.
The allocation of the acquisition cost was as follows:
Rp
Purchase consideration — net of discount on promissory
    notes
3,338,653
Fair value of net assets acquired:
- Cash and cash equivalents
141,475
- Distributable KSO revenue receivable
187,468
- Other current assets
13,839
- Property, plant and equipment
1,807,338
- Intangible assets
2,752,267
- Other non-current assets
160,139
- Current liabilities
(284,120
)
- Deferred tax liabilities
(1,115,645
)
- Non-current liabilities
(620,146
)
Fair value of net assets
3,042,615
Difference adjusted to equity for 13% Indosat's ownership
    in Pramindo
296,038
Total purchase consideration
3,338,653
Net cash outflow on the acquisition of Pramindo amounted to
Rp243,561 million.
On January 28, 2004, the Company obtained a loan to finance
the payment of the outstanding promissory notes issued for the
acquisition of Pramindo (Note 20b). On March 15, 2004,
the Company repaid the remaining balance of these promissory
notes and legal title to all of Pramindo's shares has been
completely transferred to the Company.
F-33
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
c.
AWI
Effective on July 31, 2003 (the "closing date"),
the Company acquired 100% of the outstanding common stock of
AWI, the investor in KSO III, for approximately
Rp1,141,752 million plus the assumption of AWI's debts
of Rp2,577,926 million. The purchase consideration included
non-interest bearing promissory notes with a face value of
US$109.1 million (Rp927,272 million), of which the
present value at the discount rate of 5.16% at the closing date
was estimated to be US$92.7 million
(Rp788,322 million). The promissory notes are to be paid in
10 equal semi-annual installments beginning July 31, 2004.
The acquisition of AWI has been accounted for using the purchase
method of accounting. There was no goodwill arising from this
acquisition. The following table summarizes the final purchase
price allocation of the acquired assets and assumed liabilities
based on estimates of their respective fair values at the
closing date:
Rp
Distributable KSO revenue receivable
540,267
Property, plant and equipment
1,556,269
Intangible assets
1,982,564
Other assets
34,372
Deferred tax liabilities
(393,794
)
Fair value of net assets acquired
3,719,678
Borrowings assumed
(2,577,926
)
Amount of cash and promissory notes given up
1,141,752
Intangible assets identified from this acquisition represent
right to operate the business in the KSO area and the amount is
being amortized over the then remaining term of the KSO
agreement of 7.4 years (Note 15).
The Company's consolidated results of operations include
the operating results of AWI since July 31, 2003, the date
of acquisition.
The outstanding promissory notes issued for the acquisition of
AWI are presented as "Liabilities of business
acquisitions" in the consolidated balance sheets as of
December 31, 2004 and 2005 (Note 25). As of
December 31, 2004 and 2005, the outstanding promissory
notes, before unamortized discount, amounted to
US$98.2 million (Rp913,091 million) and
US$76.4 million (Rp751,036 million), respectively.
The allocation of the acquisition cost described above was based
on an independent appraisal of fair values.
d.
Amendment of the Joint Operation Scheme in
    Regional Division IV ("KSO IV")
On January 20, 2004, the Company and PT Mitra Global
Telekomunikasi Indonesia ("MGTI"), the investor in KSO
IV, entered into an agreement to amend and restate their joint
operation agreement
F-34
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
("KSO agreement"). The principal provisions in the
original KSO agreement that have been amended are:
•
The rights to operate fixed-line telecommunications services are
    transferred to the Company, where KSO IV is operated under the
    management, supervision, control and responsibility of the
    Company.
•
Responsibilities for funding construction of new
    telecommunication facilities and payments of operating expenses
    incurred in KSO IV are assigned to the Company.
•
Risk of loss from damages or destruction of assets operated by
    KSO IV is transferred to the Company.
•
At the end of the KSO period (December 31, 2010), all
    rights, title and interest of MGTI in existing property, plant
    and equipment (including new additional installations) and
    inventories shall be transferred to the Company at no cost.
•
The Company's rights to receive Minimum Telkom Revenues
    ("MTR") and share in Distributable KSO Revenues
    ("DKSOR") under the original KSO agreement were
    amended so that MGTI receives fixed monthly payments
    ("Fixed Investor Revenues") beginning in February 2004
    through December 2010 totaling US$517.1 million and the
    Company is entitled to the balance of KSO revenues net of
    operating expenses and payments to MGTI for Fixed Investor
    Revenues. In addition, payments for Fixed Investor Revenues must
    be made to MGTI before any payments can be made to the Company.
•
In the event funds in KSO IV are insufficient to pay Fixed
    Investor Revenues to MGTI, the Company is required to pay the
    shortfall to MGTI.
As a result of the amendment of the KSO agreement, the Company
obtained the legal right to control financial and operating
decisions of KSO IV. Accordingly, the Company has accounted for
this transaction as a business combination using the purchase
method of accounting.
The purchase price for this transaction was approximately
US$390.7 million or equivalent to Rp3,285,362 million
which represents the present value of fixed monthly payments
(totaling US$517.1 million) to be paid to MGTI beginning in
February 2004 through December 2010 using a discount rate of
8.3% plus direct cost of the business combination. The
allocation of the acquisition cost was as follows:
Rp
Property, plant and equipment
2,377,134
Intangible assets
908,228
Total purchase consideration
3,285,362
The allocation of the acquisition cost described above was based
on an independent appraisal of fair values. Intangible assets
identified from this acquisition represent right to operate the
business in the KSO area and the amount is being amortized over
the remaining term of the KSO agreement of 6.9 years
(Note 15). There was no goodwill arising from this
acquisition.
F-35
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
The Company's consolidated results of operations include
the operating results of KSO IV since February 1, 2004
being the nearest convenient balance date.
As of December 31, 2004 and 2005, the remaining monthly
payments to be made to MGTI, before unamortized discount,
amounted to US$462.9 million (Rp4,305,125 million) and
US$393.3 million (Rp3,868,433 million) and is
presented as "Liabilities of business acquisitions"
(Note 25).
e.
Pro forma operating results related to acquisition
    of KSO investors and KSO IV
The following unaudited pro forma financial information reflects
the consolidated results of operations of the Company as if the
acquisition of AWI and KSO IV had taken place on January 1,
2003. The pro forma information includes adjustments for
amortization of intangible assets, depreciation expense on
property, plant and equipment based on the allocated purchase
price, interest expense on incremental borrowings and income
taxes. The pro forma financial information is not necessarily
indicative of the results of operations as it would have been
had the transactions been effected on the assumed dates or
indicative of future operations.
Unaudited
2003
2004
Operating revenues
28,343,447
34,020,663
Operating income
11,687,955
13,916,465
Income before tax
11,399,321
12,071,780
Net income
6,509,255
6,117,619
Net income per share — in full Rupiah amount
322.88
303.45
Net income per ADS — in full Rupiah amount
12,915.19
12,138.13
6.
CASH AND CASH EQUIVALENTS
2004
2005
Cash on hand
8,631
6,070
Cash in banks
Related parties
Rupiah
Bank Mandiri
192,056
89,128
Bank Negara Indonesia
158,519
54,590
Bank Rakyat Indonesia
10,712
5,095
Bank Pos Nusantara
1,278
879
Total
362,565
149,692
F-36
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
2004
2005
Foreign currencies
Bank Mandiri
98,951
55,797
Bank Negara Indonesia
1,765
2,701
Bank Rakyat Indonesia
612
657
Total
101,328
59,155
Total — related parties
463,893
208,847
Third parties
Rupiah
ABN AMRO Bank
81,184
34,453
Deutsche Bank
9,173
15,954
Bank Bukopin
10,190
15,800
Bank Central Asia
5,906
8,398
Citibank NA
362
1,595
Lippo Bank
2,265
1,361
Bank Mega
689
1,321
Bank Buana Indonesia
45
1,189
Bank Muamalat Indonesia
75
601
Bank Niaga
1,884
498
Bank Danamon
114
324
Bank Bumi Putra Indonesia
—
242
Bank Internasional Indonesia
26
53
Total
111,913
81,789
Foreign currencies
ABN AMRO Bank
95
54,575
Citibank NA
4,416
5,737
Deutsche Bank
541
5,309
Bank Central Asia
39
142
Standard Chartered Bank
322
99
Bank Internasional Indonesia
31
30
The Bank of Tokyo Mitsubishi
22
46
Total
5,466
65,938
Total — third parties
117,379
147,727
Total cash in banks
581,272
356,574
F-37
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
2004
2005
Time deposits
Related parties
Rupiah
Bank Mandiri
794,371
1,510,009
Bank Negara Indonesia
206,195
660,915
Bank Rakyat Indonesia
231,805
246,415
Bank Tabungan Negara
75,960
132,455
Bank Syariah Mandiri
—
7,000
Total
1,308,331
2,556,794
Foreign currencies
Bank Mandiri
—
293,115
Bank Negara Indonesia
139,450
98
Bank Rakyat Indonesia
32,480
—
Total
171,930
293,213
Total — related parties
1,480,261
2,850,007
Third parties
Rupiah
Citibank NA
—
310,100
Standard Chartered Bank
698,750
177,800
Bank Niaga
102,787
109,565
Bank Mega
98,906
99,575
Bank Bukopin
98,710
89,255
Bank Jabar
89,648
85,590
Bank Danamon
61,115
63,915
Bank NISP
53,650
50,680
Bank BTPN
—
43,255
Bank Bumi Putra Indonesia
18,303
19,643
Bank Syariah Mega Indonesia
16,000
17,000
Bank Muamalat Indonesia
7,000
9,000
Bank Yudha Bhakti
—
6,000
Bank Nusantara Parahyangan
—
4,000
ABN AMRO Bank
11,000
—
Total
1,255,869
1,085,378
F-38
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
2004
2005
Foreign currencies
Deutsche Bank
1,051,839
873,772
Citibank NA
—
202,883
Standard Chartered Bank
225,208
—
The Hongkong and Shanghai Banking Corporation
253,043
—
Total
1,530,090
1,076,655
Total — third parties
2,785,959
2,162,033
Total time deposits
4,266,220
5,012,040
Total cash and cash equivalents
4,856,123
5,374,684
Range of interest rates per annum for time deposits is as
follows:
2004
2005
Rupiah
3.00%—9.50%
2.00%—14.50%
Foreign currencies
0.55%—1.95%
0.60%— 3.70%
The related parties which the Company places its funds are
Government-owned banks. The Company places a majority of its
cash and cash equivalents in these banks because they have the
most extensive branch network in Indonesia and are considered to
be financially sound banks as they are owned by the Government.
Refer to Note 45 for details of related party transactions.
7.
TRADE ACCOUNTS RECEIVABLE
Trade accounts receivable from related parties and third parties
arise from services provided to both retail and non-retail
customers.
a.
By Debtor
Related parties:
2004
2005
Government agencies
289,644
432,982
KSO Units
145,810
111,599
PT Citra Sari Makmur
20,127
31,242
PT Patra Telekomunikasi Indonesia
8,824
2,921
PT Aplikanusa Lintasarta
8,780
437
Others
10,847
35,464
Total
484,032
614,645
Allowance for doubtful accounts
(64,928
)
(84,275
)
Net
419,104
530,370
F-39
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
Trade accounts receivable from certain related parties are
presented net of the Company's liabilities to such parties
due to legal right of offset in accordance with agreements with
those parties.
Third parties:
2004
2005
Residential and business subscribers
3,213,598
3,452,176
Overseas international carriers
143,539
196,756
Total
3,357,137
3,648,932
Allowance for doubtful accounts
(457,138
)
(601,393
)
Net
2,899,999
3,047,539
b.
By Age
Related parties:
2004
2005
Up to 6 months
396,425
505,519
7 to 12 months
14,947
27,390
13 to 24 months
19,659
25,574
More than 24 months
53,001
56,162
Total
484,032
614,645
Allowance for doubtful accounts
(64,928
)
(84,275
)
Net
419,104
530,370
Third parties:
2004
2005
Up to 3 months
2,773,992
2,938,326
More than 3 months
583,145
710,606
Total
3,357,137
3,648,932
Allowance for doubtful accounts
(457,138
)
(601,393
)
Net
2,899,999
3,047,539
F-40
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
c.
By Currency
Related parties
2004
2005
Rupiah
447,657
598,533
United States Dollar
36,375
16,112
Total
484,032
614,645
Allowance for doubtful accounts
(64,928
)
(84,275
)
Net
419,104
530,370
Third parties
2004
2005
Rupiah
3,198,875
3,444,914
United States Dollar
158,262
204,018
Total
3,357,137
3,648,932
Allowance for doubtful accounts
(457,138
)
(601,393
)
Net
2,899,999
3,047,539
d.
Movements in the allowance for doubtful
    accounts
2003
2004
2005
Beginning balance
502,989
443,892
522,066
Additions
296,099
342,895
478,005
Bad debts write-off
(355,196
)
(264,721
)
(314,403
)
Ending balance
443,892
522,066
685,668
Management believes that the allowance for doubtful receivables
is adequate to cover probable losses on uncollectible accounts.
Except for the amounts receivable from Government Agencies,
management believes that there are no significant concentrations
of credit risk on these receivables.
Refer to Note 45 for details of related party transactions.
F-41
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
8.
INVENTORIES
2004
2005
Components
53,611
50,520
Allowance for obsolescence
(20,188
)
(8,605
)
Net
33,423
41,915
Modules
88,259
103,520
Allowance for obsolescence
(34,063
)
(39,553
)
Net
54,196
63,967
SIM cards, RUIM cards and prepaid voucher blanks
115,948
114,634
Allowance for obsolescence
(482
)
(189
)
Net
115,466
114,445
Total
203,085
220,327
Movements in the allowance for obsolescence are as follows:
2004
2005
Beginning balance
40,489
54,733
Additions
14,800
10,968
Inventory write-off
(556
)
(17,354
)
Ending balance
54,733
48,347
Management believes that the allowance is adequate to cover
probable losses from decline in inventory value due to
obsolescence.
At December 31, 2005, inventory held by a certain
subsidiary was insured against fire, theft and other specified
risks for US$0.6 million. Management believes that the
insurance amount is adequate to cover such risks.
9.
PREPAID EXPENSES
2004
2005
Rental
268,287
112,078
Salary
218,329
289,632
Frequency license
—
275,359
Insurance
98,485
66,449
Telephone directory issuance cost
27,246
26,527
Other
15,722
7,824
Total
628,069
777,869
F-42
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
10.
OTHER CURRENT ASSETS
2004
2005
Restricted time deposits — Bank Mandiri
44,608
159,537
As of December 31, 2004, the balance consists of the
Company's time deposits of US$4.6 million
(Rp42,688 million) pledged as collateral for credit
facility obtained by Napsindo (Note 20c) and
Rp1,920 million pledged as collateral for bank guarantees.
As of December 31, 2005, the balance consists of the
Company's time deposits of US$13.6 million
(Rp133,926 million) and Rp25,611 million pledged as
collateral for bank guarantees.
11.
LONG-TERM INVESTMENTS
2004
Percentage of
Opening
Addition/
Equity in
Translation
Ending
Ownership
Balance
(Deduction)
Net Income
Adjustment
Balance
Equity method:
PT Citra Sari Makmur
25.00
52,422
—
2,331
5,363
60,116
PT Patra Telekomunikasi Indonesia
30.00
11,332
—
1,089
—
12,421
PT Pasifik Satelit Nusantara
43.69
—
—
—
—
—
63,754
—
3,420
5,363
72,537
Cost method:
Bridge Mobile Pte. Ltd.
14.29
—
9,290
—
—
9,290
PT Batam Bintan Telekomunikasi
5.00
587
—
—
—
587
PT Pembangunan Telekomunikasi Indonesia
3.18
199
—
—
—
199
PT Mandara Selular Indonesia
3.63
—
—
—
—
—
Medianusa Pte. Ltd.
—
108
(108
)
—
—
—
894
9,182
—
—
10,076
64,648
9,182
3,420
5,363
82,613
F-43
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
2005
Percentage of
Opening
Equity in
Translation
Ending
Ownership
Balance
Addition
Net Income
Adjustment
Balance
Equity method:
PT Citra Sari Makmur
25.00
60,116
—
2,480
3,658
66,254
PT Patra Telekomunikasi Indonesia
40.00
12,421
4,250
8,399
25,070
PT Pasifik Satelit Nusantara
35.50
—
—
—
—
—
72,537
4,250
10,879
3,658
91,324
Cost method:
Bridge Mobile Pte. Ltd.
12.50
9,290
—
—
—
9,290
PT Batam Bintan Telekomunikasi
5.00
587
—
—
—
587
PT Pembangunan Telekomunikasi Indonesia
3.18
199
—
—
—
199
PT Mandara Selular Indonesia
1.33
—
—
—
—
—
10,076
—
—
—
10,076
82,613
4,250
10,879
3,658
101,400
a.
PT Citra Sari Makmur ("CSM")
CSM is engaged in providing Very Small Aperture Terminal
("VSAT"), network application services and consulting
services on telecommunications technology and related facilities.
As of December 31, 2004 and 2005, the carrying amount of
investment in CSM was equal to the underlying equity in net
assets of CSM.
b.
PT Patra Telekomunikasi Indonesia
    ("Patrakom")
Patrakom is engaged in providing satellite communication system
services and related services and facilities to companies in the
petroleum industry.
On August 26, 2005, the Company purchased 10% of
Patrakom's outstanding shares from Indosat for
Rp4,250 million, thereby increasing the Company's
ownership interest from 30% to 40%.
As of December 31, 2004 and 2005, the carrying amount of
investment in Patrakom was approximate to the underlying equity
in net assets of Patrakom.
c.
PT Pasifik Satelit Nusantara
    ("PSN")
PSN is engaged in providing satellite transponder leasing and
satellite-based communication services in the Asia Pacific
region.
As of December 31, 2001, the Company's share of losses
in PSN has exceeded the carrying amount of the investment.
Accordingly, the investment has been reduced to zero.
On August 8, 2003, as a result of share-swap transaction
with CPSC, the Company's interest in PSN effectively
increased to 43.69%. The Company decided to increase its
ownership interest in PSN as
F-44
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
part of the share-swap transactions that was premised on the
Company's assessment that PSN's satellite services
will allow it to capitalize on a government program which calls
for the provision of telecommunication services to remote areas
of Indonesia.
In 2005, the Company's ownership interest was diluted to
35.5% as a result of debt to equity conversions consummated by
PSN.
d.
Bridge Mobile Pte. Ltd
On November 3, 2004, Telkomsel together with six other
international mobile operators in Asia Pacific established
Bridge Mobile Pte. Ltd. (Singapore), a company that is engaged
in providing regional mobile services in the Asia Pacific region.
Telkomsel contributed US$1.0 million (Rp9,290 million)
which represents a 14.286% ownership interest.
On April 14, 2005, Telkomsel's ownership interest was
diluted to 12.50% following issuance of new shares by Bridge
Mobile Pte. Ltd to a new stockholder.
e.
PT Batam Bintan Telekomunikasi
    ("BBT")
BBT is engaged in providing fixed line telecommunication
services at Batamindo Industrial Park in Muka Kuning, Batam
Island and at Bintan Beach International Resort and Bintan
Industrial Estate in Bintan Island.
f.
PT Pembangunan Telekomunikasi Indonesia
    ("Bangtelindo")
Bangtelindo is primarily engaged in providing consultancy
services on the installation and maintenance of
telecommunications facilities.
g.
PT Mandara Selular Indonesia
    ("Mobisel")
Mobisel is engaged in providing mobile cellular services and
related facilities. These services were previously provided by
the Company under a revenue-sharing arrangement with PT Rajasa
Hazanah Perkasa ("RHP"). The capital contribution made
by the Company of Rp10,398 million represented a 25% equity
ownership in Mobisel.
As of December 31, 2002, the value of investment has been
reduced to zero because the Company's share of loss
exceeded the carrying amount of investment in Mobisel.
In July 2003 and January 2004, Mobisel carried out a series of
debt to equity conversions resulting in dilution of the
Company's ownership interest to 6.4%.
On December 20, 2004, Mobisel's stockholders agreed to
issue 306,000,000 new Series B shares to a new stockholder
and an existing stockholder. The issuance of 306,000,000 new
Series B shares resulted in dilution of the Company's
interest in Mobisel to 3.63%
On May 27, 2005, the Company's ownership interest was
further diluted to 1.33% following the issuance of 1,179,418,253
new Series B shares by Mobisel.
F-45
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
On January 13, 2006, the Company sold its entire ownership
interest in Mobisel to Twinwood Ventures Limited (third party)
for Rp22,561 million (Note 53). The resulting gain on
the sale was not significant to the consolidated statement of
income.
h.
Medianusa Pte. Ltd.
Medianusa Pte. Ltd. is an associated company of Infomedia, which
is engaged as a sales agent, in search of advertisers for
telephone directories. On November 30, 2004, Infomedia sold
its entire ownership in Medianusa Pte. Ltd. for
SGD0.024 million (Rp135 million). The results of
operations of Medianusa Pte. Ltd. and the gain on this sale was
not significant to the Company's consolidated statement of
income.
On August 8, 2003, the Company and PT Centralindo
Pancasakti Cellular ("CPSC") signed a share-swap
agreement ("KMT-IP share-swap transaction") in which
the Company delivered its 14.20% outstanding shares in PT
Komunikasi Selular Indonesia ("Komselindo"), its
20.17% outstanding shares in PT Metro Selular Nusantara
("Metrosel"), and its 100% outstanding shares in
PT Telekomindo Selular Raya ("Telesera") to CPSC. In
return, CPSC delivered its 30.58% outstanding shares in PT
Indonusa Telemedia ("Indonusa"),
21.12% outstanding shares in PT Pasifik Satelit Nusantara
("PSN") and paid cash of Rp5,398 million to the
Company.
From the KMT — IP share-swap transaction, the Company
recognized a loss of Rp47,307 million being the difference
between the fair value of assets received and the carrying
amount of the Company's investments given to CPSC, and
reversal of difference due to change of equity in Metrosel
previously recognized directly in equity.
F-46
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
12.
PROPERTY, PLANT AND EQUIPMENT
January 1,
KSO IV
December 31,
2004
Acquisitions
Additions
Deductions
Reclassifications
2004
At cost or revalued amounts:
Direct acquisitions
Land
298,964
—
34,212
(156
)
(5,681
)
327,339
Buildings
1,819,095
7,021
29,722
(14,448
)
328,665
2,170,055
Switching equipment
10,473,392
616,769
209,463
(52,829
)
(886,695
)
10,360,100
Telegraph, telex and data communication equipment
199,314
—
4,071
(14
)
10,484
213,855
Transmission installation and equipment
16,818,179
271,678
245,170
(573,950
)
10,161,066
26,922,143
Satellite, earth station and equipment
6,209,827
—
30,998
(165,130
)
(2,720,892
)
3,354,803
Cable network
15,488,797
1,427,049
195,947
(44,651
)
633,932
17,701,074
Power supply
1,149,458
18,644
22,784
(6,116
)
9,940
1,194,710
Data processing equipment
3,252,667
32,012
469,470
(11,671
)
44,263
3,786,741
Other telecommunications peripherals
735,188
—
62,550
(3,872
)
30,768
824,634
Office equipment
660,491
102
32,513
(8,470
)
(22,970
)
661,666
Vehicles
187,853
3,859
4,972
(9,285
)
4,004
191,403
Other equipment
107,573
—
1,855
(71
)
3,269
112,626
Property under construction:
Buildings
54,888
—
46,137
—
(47,613
)
53,412
Switching equipment
158,056
—
57,033
—
(215,089
)
—
Transmission installation and equipment
93,907
—
5,067,293
—
(4,986,069
)
175,131
Satellite, earth station and equipment
607,172
—
234,354
—
(64,627
)
776,899
Cable network
14,524
—
2,006,243
—
(1,995,259
)
25,508
Power supply
106
—
24,953
—
(24,990
)
69
Data processing equipment
10,526
—
30,065
—
(23,910
)
16,681
Other telecommunications peripherals
16,483
—
10,594
—
(27,077
)
—
F-47
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
January 1,
KSO IV
December 31,
2004
Acquisitions
Additions
Deductions
Reclassifications
2004
Leased assets
Vehicles
239
—
11
—
163
413
Total
58,356,699
2,377,134
8,820,410
(890,663
)
205,682
68,869,262
Accumulated depreciation:
Direct acquisitions
Buildings
812,319
—
136,083
(11,209
)
15,445
952,638
Switching equipment
5,266,488
—
748,667
(36,795
)
(377,087
)
5,601,273
Telegraph, telex and data communication equipment
194,249
—
853
(791
)
4,342
198,653
Transmission installation and equipment
4,956,895
—
2,747,743
(513,618
)
1,017,239
8,208,259
Satellite, earth station and equipment
2,158,379
—
199,729
(165,075
)
(660,751
)
1,532,282
Cable network
6,613,281
—
1,560,387
(33,777
)
95,770
8,235,661
Power supply
797,925
—
108,436
(5,642
)
4,061
904,780
Data processing equipment
1,469,816
—
680,399
(11,221
)
(26,173
)
2,112,821
Other telecommunications peripherals
572,190
—
75,248
(3,664
)
68,804
712,578
Office equipment
497,467
—
68,822
(7,291
)
3,759
562,757
Vehicles
173,134
—
11,730
(8,224
)
4,224
180,864
Other equipment
69,302
—
17,469
(71
)
7,827
94,527
Leased assets
Vehicles
114
—
33
—
(77
)
70
Total
23,581,559
—
6,355,599
(797,378
)
157,383
29,297,163
Net Book Value
34,775,140
39,572,099
F-48
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
January 1,
Write-down of
December 31,
2005
Additions
Assets
Deductions
Reclassifications
2005
At cost or revalued amounts:
Direct acquisitions
Land
327,339
30,444
—
(22,104
)
(1,232
)
334,447
Buildings
2,170,055
65,622
—
(4,553
)
336,435
2,567,559
Switching equipment
10,360,100
324,748
—
(13,547
)
158,580
10,829,881
Telegraph, telex and data communication equipment
213,855
2,410
—
(120
)
(353
)
215,792
Transmission installation and equipment
26,922,143
846,944
—
(28,747
)
3,813,794
31,554,134
Satellite, earth station and equipment
3,354,803
697,304
—
(427,836
)
1,319,733
4,944,004
Cable network
17,701,074
868,823
—
(20,853
)
148,456
18,697,500
Power supply
1,194,710
73,492
—
(7,198
)
51,391
1,312,395
Data processing equipment
3,786,741
261,442
—
(6,132
)
3,800,322
7,842,373
Other telecommunications peripherals
824,634
69,469
—
(5,675
)
15,723
904,151
Office equipment
661,666
69,501
—
(1,772
)
(79,457
)
649,938
Vehicles
191,403
975
—
(5,090
)
(905
)
186,383
Other equipment
112,626
2,923
—
—
(5
)
115,544
Property under construction:
Buildings
53,412
235,354
—
—
(266,991
)
21,775
Switching equipment
—
13,172
—
—
—
13,172
Transmission installation and equipment
175,131
7,518,740
—
—
(6,979,472
)
714,399
Satellite, earth station and equipment
776,899
—
—
—
(776,766
)
133
Cable network
25,508
213
—
—
(21,950
)
3,771
Power supply
69
8,711
—
—
(8,719
)
61
Data processing equipment
16,681
2,167,465
—
—
(616,886
)
1,567,260
Other telecommunications peripherals
—
37,825
—
—
(34,301
)
3,524
F-49
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
January 1,
Write-down of
December 31,
2005
Additions
Assets
Deductions
Reclassifications
2005
Leased assets
Vehicles
413
—
—
—
(83
)
330
Transmission installation and equipment
—
257,380
—
—
—
257,380
Total
68,869,262
13,552,957
—
(543,627
)
857,314
82,735,906
Accumulated depreciation and impairment:
Direct acquisitions
Buildings
952,638
143,894
—
(1,789
)
15,095
1,109,838
Switching equipment
5,601,273
766,155
—
(13,547
)
118,711
6,472,592
Telegraph, telex and data communication equipment
198,653
3,004
—
(120
)
(10
)
201,527
Transmission installation and equipment
8,208,259
3,281,208
552,828
(15,239
)
(35,774
)
11,991,282
Satellite, earth station and equipment
1,532,282
220,658
—
(427,836
)
(19,043
)
1,306,061
Cable network
8,235,661
2,019,324
—
(21,012
)
97,771
10,331,744
Power supply
904,780
84,438
—
(7,198
)
50,170
1,032,190
Data processing equipment
2,112,821
796,921
—
(6,132
)
34,521
2,938,131
Other telecommunications peripherals
712,578
76,882
—
(5,675
)
10,198
793,983
Office equipment
562,757
43,274
—
(1,562
)
(61,331
)
543,138
Vehicles
180,864
4,758
—
(5,089
)
(932
)
179,601
Other equipment
94,527
7,042
—
—
(5
)
101,564
Leased assets
Vehicles
70
65
—
—
(65
)
70
Transmission installation and equipment
—
27,002
63,940
—
—
90,942
Total
29,297,163
7,474,625
616,768
(505,199
)
209,306
37,092,663
Net Book Value
39,572,099
45,643,243
2004
2005
Proceeds from sale of property, plant and equipment
67,196
84,621
Net book value
93,285
38,428
(Loss) gain on disposal
(26,089
)
46,193
F-50
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
In accordance with the amended and restated KSO agreement with
MGTI (Note 5d), ownership rights to the acquired property,
plant and equipment in KSO IV are legally retained by MGTI until
the end of the KSO period (December 31, 2010). As of
December 31, 2004 and 2005, the net book value of these
property, plant and equipment was Rp2,000,073 million and
Rp1,469,700 million, respectively.
As of December 31, 2004 and 2005, the net book value of
property, plant and equipment included in the Company's
property, plant and equipment that are utilized by the KSO
amounted to Rp449,016 million and Rp356,658 million,
respectively. The legal ownership of these property, plant and
equipment are still retained by the Company.
In the first quarter of 2005, the Government, in its efforts to
rearrange the frequency spectra utilized by the
telecommunications industry, issued a series of regulations
which resulted in the Company not being able to utilize certain
frequency spectra it currently uses to support its fixed
wireline cable network commencing at the end of 2006. As a
result of these regulations, certain of the Company's cable
network facilities within the fixed wireline segment, which
comprise primarily of Wireless Local Loop ("WLL") and
Approach Link equipment operating in the affected frequency
spectra, can no longer be used commencing at the end of 2006.
Accordingly, the Company has shortened its estimate of the
remaining useful lives for WLL and Approach Link equipment in
the first quarter of 2005 and begun depreciating the then
remaining net book value of those assets through
December 31, 2006. The effect of this change in estimate
increased depreciation expense by Rp471,187 million
(Rp329,831 million after tax) in 2005.
Further, on August 31, 2005, the Minister of Communication
and Information ("MoCI") issued a press release which
announced that in order to conform with the international
standards and as recommended by the International
Telecommunications Union — Radiocommunication Sector
("ITU-R"),
the 1900 MHz frequency spectrum would only be used for the
International Mobile Telecommunications-2000
("IMT-2000" or "3-G") network. The MoCI also
announced that the CDMA-based technology network which the
Company uses for its fixed wireless services can only operate in
the 800 MHz frequency spectrum. At present, the Company
utilizes the 1900 MHz frequency spectrum for its fixed
wireless network in Jakarta and West Java areas while for other
areas, the Company utilizes the 800 MHz frequency spectrum.
As a result of the Government's decision, the
Company's Base Station System ("BSS") equipment
in Jakarta and West Java areas which are part of transmission
installation and equipment for fixed wireless network can no
longer be used commencing at the end of 2007. Management expects
the BSS equipment will be completely replaced with BSS equipment
operating in 800 MHz by the end of June 2007. On
January 13, 2006, the MoCI issued MoCI
Regulation No. 01/ PER/ M.KOMINFO/1/2006 which
reaffirmed the Government's decision that the
Company's fixed wireless network can only operate in the
800 MHz frequency spectrum and that the 1900 MHz is
allocated for 3-G network.
Following the Government's decisions, the Company reviewed
the recoverable amount of cash-generating unit to which the
affected fixed wireless asset belongs. The recoverable amount
was estimated using value in use which represents the present
value of estimated future cash flows from cash-generating unit
using a pretax discount rate of 16.89%, representing the
Company's weighted average cost of capital as of
December 31, 2005. In determining cash-generating unit to
which an asset belongs, assets are grouped at the lowest level
that includes the asset and generates cash inflows that are
largely independent of the cash inflows from other assets or
group of assets. Based on this review, in 2005, the Company
recognized a write-down of Rp616,768 million related to
transmission installa-
F-51
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
tion and equipment of fixed wireless assets and recorded this
amount as a component of operating expenses in the consolidated
statement of income. In addition, the Company recognized a loss
relating to non-cancelable contracts for procurement of the
1900 MHz transmission installation and equipment in Jakarta
and West Java areas amounting to Rp79,359 million. The loss
was included as a component of operating expenses in the
consolidated statement of income with a corresponding liability
included in "Accrued Expenses" in the consolidated
balance sheet. In addition, the Company changed its estimate of
the remaining useful lives for the Jakarta and West Java BSS
equipment and depreciates the remaining net book value of these
assets through June 30, 2007. The effect of this change in
estimate increased depreciation expense by
Rp159,042 million (Rp111,329 million after tax) in
2005.
On August 18, 2005, the Company disposed of its Palapa B-4
satellite which had been fully depreciated as of July 1,
1999. On November 17, 2005, the Company's Telkom-2
satellite was launched, and on December 20, 2005, the
Telkom-2 satellite passed the final acceptance test and was put
into service.
As of December 31, 2005, the Company operated two
satellites which primarily provide backbone transmission links
for its network and earth station satellite up-linking and
down-linking services to domestic and international users. As of
December 31, 2005, there were no events or changes in
circumstances that would indicate that the carrying amount of
the Company's satellites may not be recoverable.
Interest capitalized to property under construction amounted to
Rp22,925 million, Rp57,690 million and nil in 2003,
2004 and 2005, respectively.
Foreign exchange losses capitalized as part of property under
construction amounted to nil, Rp74,283 million and nil in
2003, 2004 and 2005, respectively.
The Company and its subsidiaries own several pieces of land
located throughout Indonesia with Building Use Rights (Hak Guna
Bangunan or HGB) for a period of 20-30 years, which will
expire between 2006-2035 . Management believes that there will
be no difficulty in obtaining the extension of the landrights
when they expire.
Some of the Company's land, on which the Company was
granted the right to use by the Ministry of Communications of
the Republic of Indonesia (formerly Ministry of Tourism, Post
and Telecommunications), is still under the name of the Ministry
of Tourism, Post and Telecommunications and the Ministry of
Communications of the Republic of Indonesia. The transfer to the
Company of the legal title of ownership on those parcels of land
is still in progress.
As of December 31, 2005, property, plant and equipment of
the Company and subsidiaries, except for land, were insured with
various insurance companies against fire, theft and other
specified risks for a coverage of Rp22,375,819 million plus
US$2,988 million. In addition, the Telkom-1 and Telkom-2
satellites are insured for US$48.2 million and
US$143.3 million, respectively. Management believes that
the insurance coverage is adequate.
On December 26, 2004, telecommunication facilities of the
Company and its subsidiaries in Banda Aceh and certain areas
nearby in Nanggroe Aceh Darussalam with net book value of
Rp54,863 million were destroyed by earthquake and tsunami.
For the year ended December 31, 2004, the Company has
recorded the loss in "Other income (expenses)" in the
consolidated statements of income. These telecommunication
facilities were covered by insurance. In 2005, the Company and
its subsidiaries have
F-52
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
received a portion of its insurance claims amounting to
Rp27,580 million and recorded this amount in "Other
income (expenses)" in the consolidated statements of income.
Certain property, plant and equipment of the Company and
subsidiaries have been pledged as collateral for lending
agreements (Notes 20 and 24).
As of December 31, 2005, the Company has lease commitments
for certain transmission installation and equipment, and
vehicles with the option to purchase the leased assets at the
end of the lease terms. Future minimum lease payments for the
assets under capital leases as of December 31, 2005 are as
follows:
Year
Rupiah
2006
73,443
2007
73,443
2008
73,443
2009
73,443
2010
73,443
Thereafter
142,775
Total minimum lease payments
509,990
Interest
(258,252
)
Net present value of minimum lease payments
251,738
Current maturities
(16,201
)
Long-term portion
235,537
F-53
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
13.
PROPERTY, PLANT AND EQUIPMENT UNDER REVENUE-SHARING
    ARRANGEMENTS
January 1,
December 31,
2004
Additions
Deductions
Reclassifications
2004
At cost:
Land
3,160
222
—
—
3,382
Buildings
20,255
225
—
(7,058
)
13,422
Switching equipment
537,890
12,473
—
(132,226
)
418,137
Transmission installation and equipment
93,028
200,251
—
(34,160
)
259,119
Cable network
318,381
117,228
—
(39,469
)
396,140
Other telecommunications peripherals
123,972
234
—
(20,709
)
103,497
Total
1,096,686
330,633
—
(233,622
)
1,193,697
Accumulated depreciation:
Land
1,449
152
—
—
1,601
Buildings
9,804
802
—
(3,529
)
7,077
Switching equipment
341,525
34,757
—
(90,160
)
286,122
Transmission installation and equipment
89,720
13,406
—
(34,160
)
68,966
Cable network
225,175
33,817
—
(31,475
)
227,517
Other telecommunications peripherals
123,972
24
—
(20,709
)
103,287
Total
791,645
82,958
—
(180,033
)
694,570
Net Book Value
305,041
499,127
F-54
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
January 1,
December 31,
2005
Additions
Deductions
Reclassifications
2005
At cost:
Land
3,382
46
—
—
3,428
Buildings
13,422
338
—
(5,739
)
8,021
Switching equipment
418,137
25,419
—
(168,521
)
275,035
Transmission installation and equipment
259,119
36,214
—
(11,895
)
283,438
Cable network
396,140
13,629
—
(141,356
)
268,413
Other telecommunications peripherals
103,497
126,187
—
(60,380
)
169,304
Total
1,193,697
201,833
—
(387,891
)
1,007,639
Accumulated depreciation:
Land
1,601
170
—
—
1,771
Buildings
7,077
480
—
(3,191
)
4,366
Switching equipment
286,122
25,421
—
(125,854
)
185,689
Transmission installation and equipment
68,966
26,223
—
(11,895
)
83,294
Cable network
227,517
21,257
—
(134,648
)
114,126
Other telecommunications peripherals
103,287
22,563
—
(56,862
)
68,988
Total
694,570
96,114
—
(332,450
)
458,234
Net Book Value
499,127
549,405
In accordance with revenue-sharing arrangements agreements,
ownership 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.
The unearned income on revenue-sharing arrangements is as
follows:
2004
2005
Gross amount
1,193,697
1,007,639
Accumulated amortization:
Beginning balance
(984,954
)
(833,365
)
Addition (Note 35)
(82,033
)
(136,681
)
Deduction
233,622
387,891
Ending balance
(833,365
)
(582,155
)
Net
360,332
425,484
F-55
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
14.
ADVANCES AND OTHER NON-CURRENT ASSETS
Advances and other non-current assets consist of:
2004
2005
Prepaid rental, non-current portion
—
428,564
Advances for purchase of property, plant and equipment
1,070,065
253,123
Security deposits
28,345
30,570
Restricted cash
114,202
90,749
Deferred landrights charges
93,843
87,863
Others
65,896
55,168
Total
1,372,351
946,037
As of December 31, 2004
,
restricted cash represents
time deposits with original maturities of more than one year
held by the Company and its subsidiaries and are pledged as
collateral for bank guarantees.
As of December 31, 2005, restricted cash represents cash
received from the Government relating to compensation for early
termination of exclusive rights (Note 29) and time deposits
with original maturities of more than one year pledged as
collateral for bank guarantees.
Deferred landrights charges represent costs to extend the
contractual life of the landrights which are deferred and
amortized over the new contractual life.
15.
GOODWILL AND OTHER INTANGIBLE ASSETS
The changes in the carrying amount of goodwill and other
intangible assets for the years ended December 31, 2004 and
2005 are as follows:
Intangible
Goodwill
Assets
Total
Gross carrying amount:
Balance as of December 31, 2003
106,348
6,011,406
6,117,754
Addition — acquisition of Dayamitra (Note 5a)
—
231,477
231,477
Addition — acquisition of KSO IV (Note 5d)
—
908,228
908,228
Balance as of December 31, 2004
106,348
7,151,111
7,257,459
Accumulated amortization:
Balance as of December 31, 2003
(54,951
)
(918,753
)
(973,704
)
Amortization expense for 2004
(21,270
)
(851,060
)
(872,330
)
Balance as of December 31, 2004
(76,221
)
(1,769,813
)
(1,846,034
)
Net book value
30,127
5,381,298
5,411,425
Weighted-average amortization period
5 years
7.97 years
F-56
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
Other
Intangible
Goodwill
Assets
Total
Gross carrying amount as of December 31, 2005
106,348
7,151,111
7,257,459
Accumulated amortization:
Balance as of December 31, 2004
(76,221
)
(1,769,813
)
(1,846,034
)
Amortization expense for 2005
(21,270
)
(896,883
)
(918,153
)
Balance as of December 31, 2005
(97,491
)
(2,666,696
)
(2,764,187
)
Net book value
8,857
4,484,415
4,493,272
Weighted-average amortization period
5 years
7.97  years
Other intangible assets resulted from the acquisitions of
Dayamitra, Pramindo, AWI and KSO IV, and represent the rights to
operate the business in the KSO areas (Note 5). Goodwill
resulted from the acquisition of GSD (Note 1c).
The estimated annual amortization expense relating to goodwill
for the year ending December 31, 2006 is
Rp8,857 million. The estimated annual amortization expense
relating to other intangible assets for each of the next five
years beginning from January 1, 2006 is
Rp896,883 million per year.
16.
ESCROW ACCOUNTS
Escrow accounts consist of the following:
2004
2005
Citibank N.A., Singapore
30,059
126,128
Bank Mandiri
6,222
6,369
36,281
132,497
a.
Citibank N.A., Singapore
This escrow account with Citibank N.A., Singapore
("Dayamitra Escrow Agent") was established to
facilitate the payment of the Company's obligations under
the Conditional Sale and Purchase Agreement and Option Agreement
entered into with the selling stockholders of Dayamitra
(Note 5a).
In 2004, the Company has repaid the entire obligations under the
Conditional Sale and Purchase Agreement, and since then this
escrow account is used to facilitate the payment of the
Company's obligations under the Option Agreement with TMC.
The escrow account earns interest at LIBOR minus 0.75% per
annum, which is computed on a daily basis. The interest income
earned is included as part of the escrow funds. The remaining
funds available will be transferred to the Company after all of
the obligations related to the Dayamitra transaction are
satisfied.
F-57
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
b.
Bank Mandiri
The escrow account with Bank Mandiri was established by
Dayamitra in relation with the credit facilities from Bank
Mandiri (Note 24e).
17.
TRADE ACCOUNTS PAYABLE
2004
2005
Related parties
Payables to other telecommunications carriers
196,127
99,980
Concession fees
254,665
648,950
Purchases of equipment, materials and services
192,302
265,459
Total
643,094
1,014,389
Third parties
Purchases of equipment, materials and services
3,366,320
4,011,444
Payables related to revenue-sharing arrangements
220,158
106,195
Payables to other telecommunication providers
24,978
163,646
Total
3,611,456
4,281,285
Total
4,254,550
5,295,674
Trade accounts payable by currency are as follows:
2004
2005
Rupiah
3,613,715
3,112,303
U.S. Dollar
638,861
1,381,473
Euro
—
796,343
Japanese Yen
715
5,508
Great Britain Pound Sterling
1,092
14
Singapore Dollar
147
33
Myanmar KYAT
20
—
Total
4,254,550
5,295,674
Refer to Note 45 for details of related party transactions.
F-58
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
18.
ACCRUED EXPENSES
2004
2005
Salaries and benefits
321,237
452,413
Operations, maintenance and telecommunications services
324,329
411,075
General, administrative and marketing
242,597
444,101
Interest and bank charges
163,203
134,299
Loss on procurement commitments (Note 12)
—
79,359
Total
1,051,366
1,521,247
19.
UNEARNED INCOME
2004
2005
Prepaid pulse reload vouchers
1,017,530
1,582,762
Other telecommunication services
7,669
3,917
Other
4,801
6,039
Total
1,030,000
1,592,718
20.
SHORT-TERM BANK LOANS
2004
2005
Bank Central Asia
455,700
170,000
ABN AMRO Bank
604,500
—
Bank Mandiri
41,433
—
Bank Niaga
—
3,800
Total
1,101,633
173,800
a.
Bank Central Asia
On December 27, 2004, the Company entered into a loan
agreement with Bank Central Asia for a short-term loan with a
maximum facility of US$49.0 million. The facility was
unsecured and bore interest at a rate equal to the
1-month
LIBOR plus
2.85% (i.e. 5.27% as of December 31, 2004). Principal
outstanding as of December 31, 2004 amounted to
Rp455,700 million (US$49.0 million). On April 15,
2005, the loan was repaid in full and the loan agreement was
terminated.
On December 3, 2004, Telkomsel entered into a loan
agreement with Deutsche Bank AG, Jakarta (as
"Arranger" and "Agent") and Bank Central
Asia (as "Lender" and "Transferor") with a
total facility of Rp170,000 million. Under the agreement,
the Lender may transfer its rights, benefits and obligations to
any bank or financial institution by delivering the Transfer
Agreement to the Agent and notifying Telkomsel. The facility
bears interest at a rate equal to the
3-month
Certificates of
Bank Indonesia plus 1% (i.e. 13.09% as of December 31,
2005) payable in arrears. The loan is due on February 1,
2006. As of December 31, 2004 and 2005, the principal
outstanding amounted to nil and
F-59
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
Rp170,000 million, respectively. On February 1, 2006,
Telkomsel repaid the entire loan balance and the loan agreement
was terminated.
b.
ABN AMRO Bank
On January 28, 2004, the Company signed a short-term loan
agreement with ABN AMRO Bank N.V., Jakarta Branch for a facility
of US$129.7 million. The loan was used to settle the
outstanding promissory notes at March 15, 2004 which were
issued for the acquisition of Pramindo (Note 5b). The
principal and interest were payable in 10 monthly
installments from March 2004 to December 2004. The loan bore
interest at a rate equal to the LIBOR plus 2.75%. As of
December 31, 2004, the loan was repaid in full and the loan
agreement was terminated on January 6, 2005.
On December 21, 2004, the Company entered into a loan
agreement with ABN AMRO Bank N.V. for a short-term loan with a
maximum facility of US$65.0 million. The loan principal of
US$30.0 million and US$35.0 million was due on
March 31, 2005 and June 30, 2005, respectively. The
loan was unsecured and bore interest at a rate equal to the
3-month
U.S. Dollar LIBOR plus 2.5% (5.02% as of December 31,
2004). Principal outstanding as of December 31, 2004 was
Rp604,500 million (US$65.0 million). On March 31,
2005 and June 30, 2005, principal repayments of
US$30.0 million and US$35.0 million, respectively,
were made in accordance with the loan agreement. On
June 30, 2005, the loan agreement was terminated.
c.
Bank Mandiri
On August 28, 2001, Napsindo entered into a loan agreement
with Bank Mandiri for a facility of US$1.8 million for a
one-year term. The loan is secured with the Company's time
deposits (Note 10) with interest rate at 2% above the
pledged time deposits interest rate (2.65% as of
December 31, 2004). The loan facility has been extended
several times, the most recent of which was on
September 23, 2004 where the loan facility was extended for
another one-year term and expired on August 28, 2005.
On April 24, 2003, Napsindo also entered into a loan
agreement with Bank Mandiri for a facility of
US$2.7 million for a one-year term. On May 4, 2004,
the facility was extended for another one year term and expired
on April 24, 2005. The loan was secured by the
Company's time deposits (Note 10) and bore interest at
2% above the pledged time deposits interest rate (2.65% as of
December 31, 2004).
As of December 31, 2004, principal outstanding under these
facilities amounted to US$4.5 million
(Rp41,433 million). On July 29, 2005, the
Company's time deposits pledged for these facilities were
used to repay the principal outstanding and on August 1,
2005, the loan agreements were terminated.
d.
Bank Niaga
On April 25, 2005, Balebat entered into a loan agreement
with Bank Niaga for a total facility of Rp2,400 million
comprising of revolving credit facility of Rp800 million
which bears interest at 12% per annum and matured on
July 25, 2005. This loan agreement also included an
investment credit facility of Rp1,600 million which is
discussed in Note 24f. On July 26, 2005, the interest
rate and maturity date for revolving credit facility was amended
to 12.5% per annum and May 30, 2006, respectively. The
total credit facility of Rp2,400 million is secured by
Balebat's property located in West Java. As of
December 31, 2005, the principal outstanding amounted to
Rp800 million.
F-60
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
On October 18, 2005, GSD entered into a loan agreement with
Bank Niaga for a maximum facility of Rp3,000 million for a
one-year term. The loan facility is secured by certain
GSD's property, bears interest at 14.5% per annum and
will expire on October 18, 2006. As of December 31,
2005, the principal outstanding amounted to Rp3,000 million.
e.
The Hongkong and Shanghai Banking Corporation
    ("HSBC")
On December 20, 2004, the Company entered into a revolving
loan agreement with HSBC for a maximum facility of
Rp500,000 million. The facility was available for
withdrawal until January 20, 2005 and any amount drawn down
under this facility was payable within 6 months from the
withdrawal date. The facility bore interest at a rate equal to
one-month Certificate of Bank Indonesia plus 1% on the amount
drawn down and was payable at the maturity date of the loan.
On March 28, 2005, the maximum facility was amended to
provide principal of Rp100,000 million with interest rate
at one-month Certificate of Bank Indonesia plus 1%, and
US$49.0 million with interest rate at LIBOR plus 1.8%.
On January 20, 2005 and April 14, 2005, the Company
drew down Rp100,000 million and US$49.0 million,
respectively. As of October 14, 2005, the loan has been
fully repaid and the loan agreement was terminated.
21.
MATURITIES OF LONG-TERM LIABILITIES
a.
Current maturities
Notes
2004
2005
Two-step loans
22
655,422
569,278
Medium-term Notes
23b
468,976
144,510
Bank loans
24
602,516
634,542
Liabilities of business acquisitions
25
573,908
862,394
Obligations under capital leases
12
—
16,201
Total
2,300,822
2,226,925
b.
Long-term portion
(In billions of Rupiah)
Notes
Total
2007
2008
2009
2010
Thereafter
Two-step loans
22
4,760.2
497.1
455.6
441.4
418.0
2,948.1
Bonds
23a
991.9
991.9
—
—
—
—
Medium-term Notes
23b
464.8
464.8
—
—
—
—
Bank loans
24
1,752.1
697.0
473.7
233.3
232.4
115.7
Liabilities of business acquisitions
25
3,128.0
735.9
818.2
797.8
776.1
—
Obligations under capital leases
12
235.5
20.5
26.1
33.0
41.9
114.0
Total
11,332.5
3,407.2
1,773.6
1,505.5
1,468.4
3,177.8
F-61
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
22.
TWO-STEP LOANS
Two-step loans are loans, which were obtained by the Government
from overseas banks and a consortium of contractors, which are
then re-loaned to the Company. The loans entered into up to July
1994 were recorded and are payable in Rupiah based on the
exchange rate at the date of drawdown. 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.
On December 15, 2004, the Company repaid a portion of its
Rupiah denominated two-step loans totaling
Rp701,272 million before its maturity. Further, on
December 24, 2004, the Company repaid a portion of its
U.S. Dollar denominated two-step loans with principal
amount of US$48.8 million and its entire Euro denominated
two-step loans with principal amount of EUR14.5 million
before their maturities. These early repayments of two-step
loans have been approved by the Ministry of Finance of the
Republic of Indonesia - Directorate General of Treasury.
The details of the two-step loans are as follows:
Interest Rate
Outstanding
Creditors
2004
2005
2004
2005
Overseas banks
3.10% — 13.25%
3.10% — 10.71%
5,889,703
5,250,829
Consortium of contractors
3.20% — 13.25%
3.20%
129,002
78,648
Total
6,018,705
5,329,477
Current maturities
(655,422
)
(569,278
)
Long-term portion
5,363,283
4,760,199
The details of two-step loans obtained from overseas banks as of
December 31, 2004 and 2005 are as follows:
Interest Rate
Outstanding
Currencies
2004
2005
2004
2005
U.S. Dollar
4.00% — 7.98%
4.00% — 6.81%
2,397,437
2,232,752
Rupiah
8.30% — 13.25%
8.3% — 10.71%
2,098,948
1,794,149
Japanese Yen
3.10%
3.10%
1,393,318
1,223,928
Total
5,889,703
5,250,829
The loans are intended for the development of telecommunications
infrastructure and supporting equipment. The loans are repayable
in semi-annual installments and are due on various dates
through 2024.
F-62
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
Details of two-step loans obtained from a consortium of
contractors as of December 31, 2004 and 2005 are as follows:
Interest Rate
Outstanding
Currencies
2004
2005
2004
2005
Japanese Yen
3.20%
3.20%
119,078
78,648
Rupiah
8.30% — 13.25%
8.30%
9,924
—
Total
129,002
78,648
The consortium of contractors consists of Sumitomo Corporation,
PT NEC Nusantara Communications and PT Humpuss Elektronika (SNH
Consortium). The loans were obtained to finance the second
digital telephone exchange project. The loans are repayable in
semi-annual installments and are due on various dates through
June 15, 2008.
Two-step loans which are payable in Rupiah bear either a fixed
interest rate, a floating rate based upon the average interest
rate on
3-month
Certificates of Bank Indonesia during the six-months preceding
the installment due date plus 1%, or a floating interest rate
offered by the lenders plus 5.25%. Two-step loans which are
payable in foreign currencies bear either a fixed rate interest
or the floating interest rate offered by the lenders, plus 0.5%.
As of December 31, 2005, the Company has used all
facilities under the two-step loan program and the draw-down
period for the two-step loans has expired.
The Company is required to maintain financial ratios as follows:
a. Projected net revenue to projected debt service ratio
should exceed 1.5:1 and 1.2:1 for two-step loans originating
from World Bank and Asian Development Bank ("ADB"),
respectively.
b. Internal financing (earnings before depreciation and
interest expenses) should exceed 50% and 20% compared to capital
expenditures for loans originating from World Bank and ADB,
respectively.
As of December 31, 2005, the Company complied with the
above mentioned ratios.
23.
NOTES AND BONDS
2004
2005
Bonds
986,564
991,850
Medium-term Notes
1,077,703
609,329
Guaranteed Notes
736,174
—
Total
2,800,441
1,601,179
Current maturities
(468,976
)
(144,510
)
Long-term portion
2,331,465
1,456,669
a.
Bonds
On July 16, 2002, the Company issued bonds amounting to
Rp1,000,000 million. The bonds were issued at par value and
have a term of five years. The bonds bear interest at a fixed
rate of 17% per
F-63
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
annum, payable quarterly beginning October 16, 2002. The
bonds are traded on the Surabaya Stock Exchange and will mature
on July 16, 2007. The trustee of the bonds is PT Bank
Negara Indonesia (Persero) Tbk and the custodian is PT Danareksa
Sekuritas. Effective January 17, 2006, PT Bank Rakyat
Indonesia Tbk became the trustee of the bonds replacing PT Bank
Negara Indonesia (Persero) Tbk.
As of December 31, 2005, the rating for the bonds issued by
Pefindo is AAA and by Standard and Poor's is BB+.
As of December 31, 2004 and 2005, the outstanding principal
amount of the bonds and the unamortized bond issuance costs are
as follows:
2004
2005
Principal
1,000,000
1,000,000
Bond issuance costs
(13,436
)
(8,150
)
Net
986,564
991,850
During the period when the bonds are outstanding, the Company is
required to comply with all covenants or restrictions including
maintaining consolidated financial ratios as follows:
1. Debt service coverage ratio should exceed 1.5:1
2. Debt to equity ratio should not exceed:
a. 3:1 for the period of January 1, 2002 to
December 31, 2002
b. 2.5:1 for the period of January 1, 2003 to
December 31, 2003
c. 2:1 for the period of January 1, 2004 to the
redemption date of the bonds
3. Debt to EBITDA ratio should not exceed 3:1
The Company has breached a covenant in the bonds indenture which
stipulates that during the period when the bonds are
outstanding, the Company will not make any loans to or for the
benefit of any person which in aggregate exceed
Rp500,000 million. As of March 24, 2006, the Company
has obtained a written waiver from PT Bank Rakyat Indonesia
Tbk, the trustee of the bonds, with regard to providing loans to
certain subsidiaries which in aggregate exceed
Rp500,000 million.
b.
Medium-term Notes
On December 13, 2004, the Company entered into an agreement
with PT ABN AMRO Asia Securities Indonesia, PT Bahana
Securities, PT BNI Securities and PT Mandiri Sekuritas
(collectively referred as "Initial Purchasers") to
issue Medium-term Notes (the "Notes") for a total
principal amount of Rp1,125,000 million. Proceeds from
issuance of the Notes were used to finance the payment of the
remaining balance of the borrowings assumed in connection with
the AWI acquisition amounting to US$123.0 million.
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
The Notes consist of four Series with the following maturities
and interest rates:
Series
Principal
Maturity
Interest Rate
A
290,000
June 15, 2005
7.70
%
B
225,000
December 15, 2005
7.95
%
C
145,000
June 15, 2006
8.20
%
D
465,000
June 15, 2007
9.40
%
Total
1,125,000
Interest on the Notes is payable semi-annually beginning
June 15, 2005 through June 15, 2007. The Notes are
unsecured and will at all times rank
pari passu
with
other unsecured debts of the Company. The Company may at any
time, before the maturity dates of the Notes, repurchase the
Notes in whole or in part.
On June 15, 2005 and December 15, 2005, the Company
repaid the Series A and Series B Notes.
As of December 31, 2004 and 2005, the outstanding principal
and unamortized debt issuance costs are as follows:
2004
2005
Principal
1,080,000
610,000
Debt issuance costs
(2,297
)
(671
)
1,077,703
609,329
Current maturities
(468,976
)
(144,510
)
Long-term portion
608,727
464,819
As of December 31, 2005, the rating for the Notes issued by
Pefindo is AAA.
During the period when the Notes are outstanding, the Company
should comply with all covenants or restrictions including
maintaining financial ratios as follows:
1. Debt service coverage ratio should exceed 1.5:1
2. Debt to equity ratio should not exceed 2:1
3. Debt to EBITDA ratio should not exceed 3:1
As of December 31, 2005, the Company complied with the
covenants.
c.
Guaranteed Notes
In April 2002, TSFL, Telkomsel's wholly-owned subsidiary,
issued US$150.0 million Guaranteed Notes (the
"Notes") which are unconditionally and irrevocably
guaranteed by Telkomsel. The Notes bear interest at 9.75%,
payable semi-annually on April 30 and October 30 of
each year and will mature on April 30, 2007. The trustee of
the Notes is Deutsche Bank Trustees (Hong Kong Limited) and
the custodian is Deutsche Bank AG, Hong Kong Branch.
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Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
Telkomsel has unconditionally and irrevocably guaranteed the
payment of all sums from time to time payable by the Issuer in
respect of the Notes. So long as any Notes remains outstanding,
among others, neither the Issuer nor the Guarantor will create
or permit to subsist any mortgage, charge, pledge, lien or other
form of encumbrance or security interest including without
limitation anything analogous to any of the foregoing under the
laws of any jurisdiction (each a "Security Interest")
on the whole or any part of its present or future assets,
undertakings, property or revenues as security for any other
indebtedness or any guarantee of or indemnity in respect of any
other indebtedness.
TSFL may, on the interest payment date falling on or about the
third anniversary of the issue date redeem the Notes, in whole
or in part, at 102.50% of the principal amount of such Notes,
together with interest accrued to the date fixed for redemption,
provided that if only part of the Notes are redeemed, the
principal amount of the outstanding Notes after such redemption
will be at least US$100.0 million.
The Notes are listed on the Singapore Exchange Securities
Trading Limited. The Notes will constitute direct,
unconditional, unsubordinated and unsecured obligations of TSFL
and will at all times rank
pari passu
and without any
preference among themselves. The payment obligations of TSFL
under the Notes shall, save for such exceptions as may be
provided by applicable laws, at all times rank at least
equivalent with all other present and future unsecured and
unsubordinated obligations of TSFL. The net proceeds from the
sale of the Notes were used by TSFL to lend to Telkomsel in
financing its capital expenditures.
Based on the "On-Loan Agreement", dated April 30,
2002 between Telkomsel and TSFL, TSFL lent the proceeds from the
subscription of the Notes to Telkomsel at an interest rate of
9.765% per annum, payable under the same terms as above.
Subsequently, on September 8, 2003, the agreement was
amended such that if any Notes are cancelled, the principal
amount of the outstanding loan will be reduced by the principal
amount of the Notes cancelled. The loan will mature on
April 30, 2007 or on such an earlier date as the loan may
become repayable.
On February 8, 2005, the inter-company loan agreement,
together with its rights, benefits and outstanding obligations
was transferred from TSFL to TFBV, another wholly owned
subsidiary of Telkomsel. In conjunction with this transfer,
Telkomsel's liability of US$79.4 million under the
loan from TSFL was transferred to TFBV, with terms and
conditions similar to those of the original Notes. Subsequently,
TFBV lent to Telkomsel an additional US$0.8 million at a
rate of 9.77% per annum plus a margin of 0.15%, payable under
similar terms as above.
As part of Telkomsel management's plan to minimize foreign
exchange exposures and to reduce interest charges, on
April 30, 2005, which was the third anniversary of the
issue date of the Notes, Telkomsel repurchased all the
outstanding Notes with an aggregate nominal value of
US$79.4 million at 102.5% (US$81.4 million) and
recorded a loss of Rp19,038 million on the extinguishment
of the debt.
F-66
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
24.
BANK LOANS
The details of long-term bank loans as of December 31, 2004
and 2005 are as follows:
2004
2005
Outstanding
Outstanding
Original
Original
Total Facility
Currency
Rupiah
Currency
Rupiah
Lenders
Currency
(in millions)
(in millions)
Equivalent
(in millions)
Equivalent
The Export-Import Bank of Korea
US$
124.0
59.1
549,449
117.6
1,156,296
Citibank N.A
US$
113.3
85.9
798,197
62.5
614,501
EUR
73.4
51.4
649,758
36.7
427,718
Bank Central Asia
Rp
173,000.0
—
143,489
—
86,093
Consortium of banks
Rp
150,000.0
—
117,174
—
74,890
Bank Mandiri
Rp
82,425.0
—
59,729
—
14,918
Bank Niaga
Rp
8,800.0
—
7,330
—
7,229
Bank Bukopin
Rp
5,300.0
—
—
—
5,001
Deutsche Bank
Rp
—
—
41,009
—
—
Syndicated banks
Rp
—
—
8,088
—
—
US$
—
0.4
4,092
—
—
Total
2,378,315
2,386,646
Current maturities of bank loans
(602,516
)
(634,542
)
Long-term portion
1,775,799
1,752,104
a.
The Export-Import Bank of Korea
On August 27, 2003, the Company entered into a loan
agreement with the Export-Import Bank of Korea for a total
facility of US$124.0 million. The loan is used to finance
the CDMA procurement from the Samsung Consortium
(Note 50a.ii) and available until April 2006. The loan
bears interest, commitment and other fees totaling 5.68%. The
loan is unsecured and payable in 10 semi-annual installments on
June 30 and December 30 of each year beginning in
December 2006. As of December 31, 2004 and 2005, principal
outstanding amounted to US$59.1 million
(Rp549,449 million) and US$117.6 million
(Rp1,156,296 million), respectively.
b.
Citibank N.A.
1.
Hermes Export Facility
On December 2, 2002, pursuant to the partnership agreement
with Siemens Aktiengesellschaft (AG) (Note 50a.i),
Telkomsel entered into the Hermes Export Facility Agreement
(Facility) with Citibank International plc (as Original Lender
and Agent) and Citibank N.A., Jakarta branch (as Arranger)
covering a total facility of EUR76.2 million which is
divided into several tranches.
The agreement was subsequently amended on October 15, 2003,
amending the Facility amount to EUR73.4 million and
repayment dates.
F-67
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
The interest rate per annum on the Facility is determined based
on the aggregate of the applicable margin, EURIBOR and mandatory
cost, if any (i.e., 2.96% as of December 31, 2004 and 3.33%
as of December 31, 2005). Interest is payable
semi-annually, starting on the utilization date of the Facility
(May 29, 2003).
As of December 31, 2004 and 2005, the outstanding balance
was EUR51.4 million (Rp649,758 million) and
EUR36.7 million (Rp427,718 million), respectively.
The schedule of the principal payments on this long-term loan as
of December 31, 2005 is as follows:
Amount
EUR
Rupiah
Year
(in millions)
Equivalent
2006
14.7
171,087
2007
14.7
171,087
2008
7.3
85,544
36.7
427,718
2.
High Performance Backbone ("HP Backbone") Loans
a. On April 10, 2002, the Company entered into a
"Loan Agreement" with Citibank N.A. (Arranger) and
Citibank International plc (Agent), which was supported by an
export credit guarantee of Hermes Kreditversicherungs AG (Lender
and Guarantor), providing a total facility of
US$23.4 million.
The facility was obtained to finance up to 85% of the cost of
supplies and services sourced in Germany relating to the design,
manufacture, construction, installation and testing of high
performance backbone networks in Sumatra pursuant to the
"Partnership Agreement" dated November 30, 2001,
with PT Pirelli Cables Indonesia and PT Siemens Indonesia for
the construction and provision of a high performance backbone in
Sumatra.
The lender required a fee of 8.4% of the total facility. This
fee is paid twice during the agreement period, 15% of the fee is
required to be paid in cash and 85% is included in the loan
balance.
As of December 31, 2004 and 2005, the outstanding loan was
US$16.8 million (Rp155,918 million) and
US$12.6 million (Rp123,665 million), respectively. The
loan is payable in ten semi-annual installments beginning in
April 2004.
Amounts drawn from the facility bear interest at a rate equal to
the
6-month
LIBOR plus
0.75% (i.e., 2.97% and 5.04% as of December 31, 2004 and
2005, respectively).
b. On April 10, 2002, the Company entered into a loan
agreement with Citibank N.A. (as Arranger) and Citibank
International plc (as Agent), which was supported by an export
credit guarantee obtained from Istituto per I Servizi
Assicurativi del Commercio Estero
("SACE Italy")
providing a total maximum facility to US$21.0 million.
The facility was used to finance up to 85% of material and
services procured in Italy in connection with the design,
manufacture, development, installation and testing of
Sub
System VI,
as part of
HP Backbone
network.
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Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
Amounts drawn from the facility bear fixed interest rate of
4.14%. The loans are payable in ten semi-annual installments
beginning in December 2003. Total principal outstanding as of
December 31, 2004 and 2005 was US$13.0 million
(Rp120,809 million) and US$9.3 million
(Rp91,257 million), respectively.
During the period when the loans are outstanding, the Company is
required to comply with all covenants or restrictions including
maintaining financial ratios as follows:
1. Debt service coverage ratio should exceed 1.5:1
2. Debt to equity ratio should not exceed:
a. 3:1 for the period of April 10, 2002 to
January 1, 2003
b. 2.75:1 for the period of January 2, 2003 to
January 1, 2004
c. 2.5:1 for the period of January 2, 2004 to
January 1, 2005
d. 2:1 for the period of January 2, 2005 to the full
repayment date of the loans
3. Debt to EBITDA ratio should not exceed:
a. 3.5:1 for the period of April 10, 2002 to
January 1, 2004
b. 3:1 for the period of January 2, 2004 to the full
repayment date of the loans
The Company has breached a covenant in the loan agreements which
stipulates that the Company will not make any loans or grant any
credit to or for the benefit of any person which in aggregate
exceed 3% of shareholders' equity. As of May 12, 2006,
the Company has obtained a written waiver from Citibank
International plc with regard to providing loans to certain
subsidiaries which in aggregate exceed 3% of shareholders'
equity.
3.
EKN-Backed Facility
On December 2, 2002, pursuant to the partnership agreement
with PT Ericsson Indonesia (Note 50a.i), Telkomsel entered
into the EKN-Backed Facility agreement (Facility) with Citibank
International plc (as Original Lender and Agent) and Citibank
N.A., Jakarta branch (as Arranger) covering a total facility
amount of US$70.5 million which is divided into several
tranches.
The agreement was subsequently amended on December 17,
2004, to reduce the total Facility to US$68.9 million.
The interest rate per annum on the Facility is determined based
on the aggregate of the applicable margin, CIRR (Commercial
Interest Reference Rate) and mandatory cost, if any (i.e., 4.02%
and 4.02% as of December 31, 2004 and 2005, respectively).
Interest is payable semi-annually, starting on the utilization
date of the Facility (July 31, 2003).
In addition to the interest, in 2004, Telkomsel was also charged
an insurance premium for the insurance guarantee given by EKN in
favor of Telkomsel for loan utilization amounting to
US$1.5 million, 15% of which was paid in cash. The
remaining balance was settled through utilization of the
Facility.
The total amount drawn down from the Facility in 2004 and 2005
amounted to US$47.3 million (equivalent to
Rp428,719 million) and nil, respectively. As of
December 31, 2004 and 2005, the
F-69
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
outstanding balance was US$56.1 million
(Rp521,470 million) and US$40.6 million
(Rp399,579 million), respectively.
The schedule of the principal payments on this long-term loan as
of December 31, 2005 is as follows:
Amount
US$
Rupiah
Year
(in millions)
Equivalent
2006
15.5
152,202
2007
15.5
152,202
2008
9.6
95,175
40.6
399,579
The following table summarizes the principal outstanding on
loans from Citibank N.A. as of December 31, 2004 and 2005:
2004
2005
Foreign
Foreign
Currencies
Rupiah
Currencies
Rupiah
(in millions)
Equivalent
(in millions)
Equivalent
Hermes Export Facility
EUR 51.4
649,758
EUR 36.7
427,718
HP Backbone loans
US$
29.8
276,727
US$
21.9
214,922
EKN-Backed Facility
US$
56.1
521,470
US$
40.6
399,579
Total
1,447,955
1,042,219
Current maturities
(402,983
)
(401,013
)
Long-term portion
1,044,972
641,206
c.
Bank Central Asia
On April 10, 2002, the Company entered into a "Term
Loan Agreement HP Backbone Sumatra Project" with Bank
Central Asia, providing a total facility of
Rp173,000 million. The facility was obtained to finance the
Rupiah portion of the high performance backbone network in
Sumatra pursuant to the "Partnership Agreement".
Amounts drawn from the facility bear interest at 4.35% plus the
3-month
time deposit
rate (10.02% and 13.27% as of December 31, 2004 and 2005,
respectively). The loans are payable in twelve unequal quarterly
installments beginning in July 2004. The loan was originally
scheduled to mature in October 2006 and was amended in 2004 to
mature in April 2007.
Total principal outstanding as of December 31, 2004 and
2005 was Rp143,489 million and Rp86,093 million,
respectively.
The loan facility from Bank Central Asia is not collateralized.
F-70
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
During the period when the loan is outstanding, the Company is
required to comply with all covenants or restrictions including
maintaining financial ratios as follows:
1. EBITDA to interest ratio should exceed 4:1
2. EBITDA to interest and principal ratio should exceed
1.5:1
3. Debt to EBITDA ratio should not exceed 3:1
The Company has breached a covenant in the loan agreement which
stipulates that the Company will not make any loans to or for
the benefit of any person which in aggregate exceed
Rp500,000 million. As of April 24, 2006, the Company
has obtained a written waiver from Bank Central Asia with regard
to providing loans to certain subsidiaries which in aggregate
exceed Rp500,000 million.
d.
Consortium of banks
On June 21, 2002, the Company entered into a loan agreement
with a consortium of banks for a facility of
Rp400,000 million to finance the Regional Division V
Junction Project. Bank Bukopin, acting as the facility agent,
charged interest at the rate of 19.5% for the first year from
the signing date and at the rate of the average 3-month
deposit rate plus 4% for the remaining years. The draw-down
period expires 19 months from the signing of the loan
agreement and the principal is payable in 14 quarterly
installments starting from April 2004. The loan facility is
secured by project equipment, with a value of not less than
Rp500,000 million.
Subsequently, based on an addendum to the loan agreement dated
April 4, 2003, the loan facility was reduced to
Rp150,000 million, the draw-down period was amended to
expire 18 months from the signing of the addendum, the
repayment schedule was amended to 14 quarterly installments
starting from May 21, 2004 and ending on June 21,
2007, and the value of the project equipment secured was reduced
to Rp187,500 million.
As of December 31, 2004 and 2005, interest rate charged on
the loan was 10.19% and 12.94%, respectively, and principal
outstanding was Rp117,174 million and
Rp74,890 million, respectively.
During the period when the loan is outstanding, the Company is
required to comply with all covenants or restrictions including
maintaining financial ratios as follows:
1. Debt to equity ratio should not exceed 3:1
2. EBITDA to interest expense should exceed 5:1
As of December 31, 2005, the Company complied with the
above mentioned ratios.
e.
Bank Mandiri
On November 20, 2003, Dayamitra entered into a loan
agreement with Bank Mandiri for a maximum facility of
Rp39,925 million. As of December 31, 2003, the
facility has been fully drawn down. This facility is repayable
on a quarterly basis until the fourth quarter of 2005 and bears
interest at 14.5% per annum which is subject to change to
reflect change in market rate (11.25% and 14% as of
December 31, 2004 and 2005, respectively), and payable on a
monthly basis. The loan is obtained to refinance
Dayamitra's payable to six contractors. As of
December 31, 2004, principal outstanding under
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Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
this facility was Rp27,925 million. On December 23,
2005, the loan was fully repaid and on January 4, 2006, the
loan agreement was terminated.
On December 20, 2003, Dayamitra also obtained a credit
facility from Bank Mandiri for a maximum facility of
Rp40,000 million. The facility is repayable on a quarterly
basis beginning from the end of the third quarter of 2004 until
end of the fourth quarter of 2006 and bears interest at
14% per annum which is subject to change to reflect change
in market rate (11.25% and 14% as of December 31, 2004 and
2005, respectively). The loan is obtained to finance the
construction of Fixed Wireless CDMA project pursuant to the
procurement agreement entered between Dayamitra and Samsung
Electronic Co. Ltd. As of December 31, 2004 and 2005,
principal outstanding under this facility was
Rp30,329 million and Rp14,328 million, respectively.
The above loans are collateralized by Dayamitra's
telecommunications equipment/network with CDMA technology
financed by these facilities, and Dayamitra's share in the
DKSOR of KSO VI. In addition, Dayamitra is required to maintain
a minimum balance of Rp6,000 million in an escrow account
established to facilitate loan repayments (Note 16b).
On March 13, 2003, Balebat entered into a loan agreement
with Bank Mandiri for a facility of Rp2,500 million. This
facility is secured by Balebat's operating equipment and
will mature in July 2006. As of December 31, 2004 and 2005,
interest rate charged on the loan was 19% and 17%, respectively,
and is payable on a monthly basis. The principal is repayable on
a monthly basis. As of December 31, 2004 and 2005,
principal outstanding under this facility amounted to
Rp1,475 million and Rp590 million, respectively.
f.
Bank Niaga
On July 18 and December 3, 2003, Balebat entered into loan
agreements with Bank Niaga for facilities totaling
Rp565 million. The facilities bear interest at 15% per
annum and are secured by Balebat's time deposits and
vehicles. The principal and interest are payable on a monthly
basis which will end in October 2005 and December 2005,
respectively. As of December 31, 2004 and 2005, principal
outstanding amounted to Rp249 million and nil, respectively.
On December 28, 2004, Balebat entered into a loan agreement
with Bank Niaga providing a total facility of
Rp7,200 million comprising of Rp5,000 million to
finance construction of plant ("Investment Facility")
which bears interest at 13.5% per annum and
Rp2,200 million to finance purchase of machinery
("Specific Transaction Facility") which bears interest
at 12% per annum. The interest rate was subsequently
increased to 17% per annum on December 1, 2005. The
Investment Facility is repayable in 36 monthly installments
commencing from March 31, 2005. The Specific Transaction
Facility is repayable in 60 monthly installments commencing
from June 29, 2005. These facilities are secured by
Balebat's property, plant and equipment with a value of
Rp8,450 million. As of December 31, 2004 and 2005,
principal outstanding under these facilities amounted to
Rp7,081 million and Rp5,696 million, respectively.
As discussed in Note 20d, on April 25, 2005, Balebat
entered into a loan agreement with Bank Niaga for a total
facility of Rp2,400 million which includes an investment
credit facility of Rp1,600 million with maturity date of
October 25, 2009. The investment credit facility loan is
payable in 48 unequal monthly installments beginning in November
2005 through October 2009. The investment
F-72
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
credit facility bears interest at a rate equal to market rate
plus 2% (17% as of December 31, 2005). As of
December 31, 2005, the principal outstanding amounted to
Rp1,533 million.
g.
Bank Bukopin
On May 11, 2005, Infomedia entered into loan agreements
with Bank Bukopin for maximum facilities totaling
Rp5,300 million. The loan is obtained to finance
acquisition of a property. The loan is payable in
60 monthly installments. A portion of the facilities of
Rp4,200 million will mature in June 2010 and the remainder
of Rp1,100 million will mature in December 2010. As of
December 31, 2005, interest rate charged on the loan was
15.75%. The facilities are secured by certain Infomedia's
property. As of December 31, 2005, the principal
outstanding amounted to Rp5,001 million.
h.
Deutsche Bank AG
On June 28, 2002, the Company entered into a contract
agreement with PT Siemens Indonesia and PT NEC Nusantara
Communications for addition of Central Electronic Wahler
Switching Digital (EWSD) and Nippon Electric Automatic Exchange
(NEAX), respectively, in Regional Division V. Subsequently, 80%
of the contract amounts were factored by the vendors to Deutsche
Bank AG (Facility Agent). The loans bore fixed interest rate at
19% per annum and are repayable in two annual installments
of Rp13,400 million beginning in December 2003 for loan
ex-PT NEC Nusantara Communications and Rp41,009 million
beginning in January 2004 for loan ex-PT Siemens Indonesia. As
of December 31, 2004, the outstanding balance was
Rp41,009 million. On January 4, 2005, the loan was
fully repaid and the loan agreement was terminated.
i.
Syndicated banks (Internet Protocol Backbone
    ("IP Backbone") Loan)
On February 25, 2002, the Company entered into a
"Facility Funding Agreement" with Bank DBS Indonesia
(syndicated agent and lender), Bank Bukopin (lender) and
Bank Central Asia ("BCA", lender), providing a total
facility of US$4.0 million and Rp90,000 million to
fund the IP Backbone project in 7 (seven) Regional
Divisions or KSO regions divided into six batches.
Amounts drawn in U.S. Dollars bear interest at 2% plus the
highest of 1, 2 or 3 month SIBOR divided by 0.87% for
the first year and 2% plus the 3 month SIBOR divided by
0.87% thereafter (4.875% as of December 31, 2004). Amounts
drawn in Rupiah bear interest at 19% fixed for the first year
and 5% plus the average of BCA's and Bukopin's
interest rates (the highest of 1, 3, 6 or
12-month
time deposit
rate) thereafter (11.125% as of December 31, 2004).
The loans are payable in eleven quarterly installments beginning
in September 2002 and due on March 15, 2005.
Total outstanding IP Backbone loans for Rupiah and
U.S. Dollars as of December 31, 2004 are
Rp8,088 million and US$0.4 million
(Rp4,092 million), respectively. The loans were fully
repaid on March 15, 2005 and the loan agreement was
terminated.
The Company pledged the property under construction as
collateral for the IP Backbone loan with a maximum amount of
US$14.6 million and Rp401 million.
F-73
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
Average interest rates for the loans during 2004 and 2005 were
as follows:
2004
2005
Rupiah
10.83% — 11.63%
11.125%
U.S. Dollar
3.31% — 4.88%
4.875%
25.
LIABILITIES OF BUSINESS ACQUISITIONS
This amount represents the Company's obligation under the
Promissory Notes issued to the Selling Stockholders of AWI in
respect of the Company's acquisition of 100% of AWI, to TM
Communication (HK) Ltd. in respect of the Company's
exercise of the Option Agreement to purchase the remaining 9.68%
of Dayamitra shares, and to MGTI in respect of the
Company's acquisition of KSO IV.
2004
2005
AWI transaction
(Note 5c)
PT Aria Infotek
479,373
394,294
The Asian Infrastructure Fund
114,136
93,879
MediaOne International I B.V
319,582
262,863
Less discount on promissory notes
(90,173
)
(57,298
)
822,918
693,738
Dayamitra transaction
(Note 5a)
TM Communication (HK) Ltd.
139,752
147,791
Less discount on promissory notes
(11,883
)
(2,519
)
127,869
145,272
KSO IV transaction
(Note 5d)
MGTI
4,305,125
3,868,433
Less discount
(938,687
)
(717,090
)
3,366,438
3,151,343
Total
4,317,225
3,990,353
Current maturity — net of discount (Note 21a)
(573,908
)
(862,394
)
Long-term portion — net of discount
3,743,317
3,127,959
26.
MINORITY INTEREST
2004
2005
Minority interest in net assets of subsidiaries:
Telkomsel
4,857,089
6,208,354
Infomedia
80,883
96,835
PII
456
—
GSD
4
4
Total
4,938,432
6,305,193
F-74
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
2003
2004
2005
Minority interest in net income (loss) of subsidiaries:
Telkomsel
1,482,897
1,915,543
3,026,029
Infomedia
22,399
37,088
37,940
Dayamitra
11,584
9,139
—
Indonusa
(2,351
)
(1,959
)
—
Napsindo
(8,541
)
(2,068
)
—
PII
(2,511
)
(1,443
)
—
GSD
1
1
2
Total
1,503,478
1,956,301
3,063,971
27. CAPITAL STOCK
2004
Percentage of
Total Paid-up
Description
Number of Shares
Ownership
Capital
%
Rp
Series A Dwiwarna share
Government of the Republic of Indonesia
1
—
—
Series B shares
Government of the Republic of Indonesia
10,320,470,711
51.19
2,580,118
JPMCB US Resident (Norbax Inc.)
1,378,468,925
6.84
344,617
The Bank of New York
1,568,517,736
7.78
392,129
Board of Commissioners
Petrus Sartono
19,116
—
5
Board of Directors
Kristiono
25,380
—
6
Suryatin Setiawan
21,708
—
5
Woeryanto Soeradji
16,524
—
4
Public (below 5% each)
6,892,459,179
34.19
1,723,116
Total
20,159,999,280
100.00
5,040,000
F-75
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
2005
Percentage of
Total Paid-up
Description
Number of Shares
Ownership
Capital
%
Rp
Series A Dwiwarna share
Government of the Republic of Indonesia
1
—
—
Series B shares
Government of the Republic of Indonesia
10,320,470,711
51.19
2,580,118
JPMCB US Resident (Norbax Inc.)
1,992,333,765
9.88
498,083
The Bank of New York
1,291,002,696
6.41
322,751
Board of Commissioners
Petrus Sartono
19,116
—
5
Board of Directors
Garuda Sugardo
16,524
—
4
Abdul Haris
1,000
—
—
John Welly
21,712
—
5
Guntur Siregar
19,980
—
5
Public (below 5% each)
6,556,113,775
32.52
1,639,029
Total
20,159,999,280
100.00
5,040,000
28.
ADDITIONAL PAID-IN CAPITAL
2004
2005
Proceeds from sale of 933,333,000 shares in excess of par value
    through initial public offering in 1995
1,446,666
1,446,666
Capitalization into 746,666,640 series B shares in 1999
(373,333
)
(373,333
)
Total
1,073,333
1,073,333
29.
DIFFERENCE IN VALUE OF RESTRUCTURING TRANSACTIONS BETWEEN
    ENTITIES UNDER COMMON CONTROL
Cross-ownership transactions and acquisition of
    Pramindo
On April 3, 2001, the Company signed a Conditional Sale and
Purchase Agreement with Indosat, for a series of transactions to
consolidate their cross-ownership in certain companies. The
transactions under the agreement are as follows:
i. Acquisition by the Company of Indosat's 35% equity
    interest in Telkomsel for US$945.0 million ("Telkomsel
    Transaction");
ii. Acquisition by Indosat of the Company's 22.5%
    equity interest in PT Satelit Palapa Indonesia
    ("Satelindo") for US$186.0 million
    ("Satelindo Transaction");
F-76
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
iii. Acquisition by Indosat of the Company's 37.66%
    equity interest in PT Aplikanusa Lintasarta
    ("Lintasarta") and convertible bonds of
    Rp4,051 million issued by Lintasarta for
    US$38.0 million ("Lintasarta
    Transaction"); and
iv. The acquisition by Indosat of all of the Company's
    rights and novation of all of the Company's obligations,
    under the KSO IV Agreement dated October 20, 1995, between
    the Company and PT Mitra Global Telekomunikasi Indonesia
    ("MGTI"), together with all of the Company's
    assets being used as KSO IV assets, for US$375.0 million
    ("KSO IV Transaction").
Lintasarta's convertible bonds were subsequently converted
into shares, thereby reducing the Company's 37.66% equity
interest to 37.21% prior to the consummation of the Lintasarta
Transaction.
The Telkomsel and Lintasarta Transactions were consummated on
May 16, 2001 based on Deed of Share Transfer No. 1/
V/2001/triplo and No. 2/ V/2001/duplo, respectively, of
Notary Ny. Liliana Arif Gondoutomo, S.H.
The Satelindo Transaction was consummated on July 23, 2001
after DeTeAsia Holding GmbH and PT Bimagraha Telekomindo (the
other Satelindo stockholders) waived their pre-emptive rights on
7.26% and 13.06% of Satelindo's shares, respectively.
On February 1, 2002, the Company and Indosat announced the
cancellation of the KSO IV Transaction. As a result, the Company
settled this portion of the cross-ownership transaction in cash.
At the time of the transaction, the Government was the majority
and controlling shareholder of both the Company and Indosat.
Accordingly, the Telkomsel, Satelindo and Lintasarta
Transactions have been accounted for as a restructuring of
entities under common control. The Company's acquisition of
a controlling interest in Telkomsel was accounted for in a
manner similar to that of pooling of interests accounting
(carryover basis). Accordingly, for reporting purposes, the
financial statements of the Company and those of Telkomsel have
been combined, as if they had been combined from the beginning
of the earliest period presented. The effects of the
transactions between the Company and Telkomsel before the
combination were eliminated in preparing the combined financial
statements. On the consummation dates of the transactions, the
difference between the consideration paid or received and the
historical amount of the net assets of the investee acquired or
carrying amount of the investment sold was included as
"Difference in value of restructuring transactions between
entities under common control" in the stockholders'
equity section.
As discussed in Note 5b, in connection with the acquisition
of Pramindo on August 15, 2002, the portion representing
Indosat's 13% equity interest in Pramindo has been
accounted for as a restructuring of entities under common
control. On the acquisition date, the difference between the
purchase consideration and the historical amount of the net
assets acquired amounting to Rp296,038 million was included
as "Difference in value of restructuring transactions
between entities under common control" in the
stockholders' equity section.
F-77
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
The difference in value of restructuring transactions between
entities under common control arising from cross-ownership
transactions and acquisition of Pramindo can be summarized as
follows:
Historical
Consideration
Amount of
Paid/
Net Assets/
Deferred
Change
(Received)
Investment
Income Tax
in Equity
Total
Tax
Net
Cross-ownership transactions with Indosat in 2001:
Acquisition of 35% equity interest in Telkomsel
10,782,450
1,466,658
337,324
—
8,978,468
—
8,978,468
Sale of 22.5% equity interest in Satelindo
(2,122,260
)
—
—
(290,442
)
(2,412,702
)
(627,678
)
(1,785,024
)
Sale of 37.66% equity interest in Lintasarta
(437,631
)
116,834
—
—
(320,797
)
(119,586
)
(201,211
)
Total
8,222,559
1,583,492
337,324
(290,442
)
6,244,969
(747,264
)
6,992,233
Acquisition of 13% equity interest in Pramindo in 2002 from
    Indosat (Note 5b)
434,025
137,987
—
—
296,038
—
296,038
Total
8,656,584
1,721,479
337,324
(290,442
)
6,541,007
(747,264
)
7,288,271
On December 20, 2002, the Government sold its 41.94%
ownership interest in Indosat to STTC and waived its special
voting rights with respect to the Series A Dwiwarna share.
As a result, as of December 20, 2002, the Government ceased
to be the majority and controlling shareholder of Indosat and
consequently, the Company no longer considers Indosat as a
common control entity as of that date. As discussed in
Note 4b, in connection with the adoption of PSAK 38R and
pursuant to a ruling issued by BAPEPAM regarding the initial
application of PSAK 38R by public companies, the Company
has reclassified the difference in value of restructuring
transactions between entities under common control resulting
from the cross-ownership transactions and acquisition of
Pramindo as a charge to retained earnings as of January 1,
2005.
Compensation for early termination of exclusive
    rights
As discussed in Note 1a, on July 31, 2002, the
Government decided to terminate the Company's exclusive
rights to provide local and domestic long-distance fixed-line
telecommunications services with effect from August 1, 2002.
On March 30, 2004, the Minister of Communications issued
Announcement No. PM.2 year 2004 regarding the
Implementation of Restructuring in the Telecommunications Sector
which, among others, provides that the Government shall pay
compensation for early termination of exclusive rights to the
Company amounting to Rp478,000 million net of tax.
F-78
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
On December 15, 2005, the Company signed an agreement on
Implementation of Compensation for Termination of Exclusive
Rights with the Ministry of Communications and
Information — Directorate General of Post and
Telecommunications. Pursuant to this agreement, the Government
agreed to pay Rp478,000 million to the Company over a
five-year period where Rp90,000 million shall be paid from
the 2005 State budget, Rp90,000 million from the 2006 State
budget and the remaining Rp298,000 million shall be paid
gradually or in one lump-sum payment based on the State's
financial ability. In addition, the Company is required by the
Government to use funds received from this compensation for
development of telecommunications infrastructure.
On December 30, 2005, the Company received the first
payment of Rp90,000 million and recorded this amount in
"Difference in value of restructuring transactions between
entities under common control" in the stockholders'
equity section. The amount is recorded as a component of
stockholders' equity because the Government is the majority
and controlling shareholder of the Company. The Company will
record the remaining amount of Rp388,000 million when
received.
30.
TELEPHONE REVENUES
2003
2004
2005
Fixed lines
Local and domestic long-distance usage
6,561,800
7,439,310
7,223,137
Monthly subscription charges
1,948,830
2,934,899
3,289,750
Installation charges
223,130
201,313
197,266
Phone cards
34,371
15,561
10,943
Others
128,734
53,938
60,156
Total
8,896,865
10,645,021
10,781,252
Cellular
Air time charges
7,677,884
9,825,738
13,666,286
Monthly subscription charges
580,550
448,472
383,537
Connection fee charges
194,053
55,797
64,110
Features
6,343
91,291
457,025
Total
8,458,830
10,421,298
14,570,958
Total Telephone Revenues
17,355,695
21,066,319
25,352,210
31. INTERCONNECTION REVENUES — NET
2003
2004
2005
Cellular
3,908,292
5,351,613
6,685,138
International
184,097
641,210
854,766
Other
69,759
195,158
202,180
Total
4,162,148
6,187,981
7,742,084
F-79
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
32. REVENUE UNDER JOINT OPERATION SCHEMES
2003
2004
2005
Minimum Telkom Revenues
899,862
295,955
268,629
Share in Distributable KSO Revenues
583,012
349,528
318,556
Amortization of unearned initial investor payments under Joint
    Operation Schemes
3,433
11,131
1,462
Total
1,486,307
656,614
588,647
Distributable KSO Revenues represent the entire KSO revenues,
less Minimum Telkom Revenue and operational expenses of the KSO
Units. These revenues are shared between the Company and the KSO
Investors based upon agreed percentages (Note 47).
The Minimum Telkom Revenue and Share in Distributable KSO
Revenues decreased in 2004 due to the acquisition and
consolidation of KSO IV (Note 5d).
33. DATA AND INTERNET REVENUES
2003
2004
2005
SMS
2,205,058
3,562,726
5,309,244
Internet
325,890
554,948
711,375
Data communication
245,575
360,642
610,367
VoIP
328,284
318,854
292,750
e-Business
3,755
11,572
10,588
Total
3,108,562
4,808,742
6,934,324
34. NETWORK REVENUES
2003
2004
2005
Leased lines
247,005
443,408
347,105
Satellite transponder lease
270,860
210,901
239,531
Total
517,865
654,309
586,636
35. REVENUE-SHARING ARRANGEMENT REVENUES
2003
2004
2005
Revenue-Sharing Arrangement revenues
200,085
198,543
165,601
Amortization of unearned income (Note 13)
58,379
82,033
136,681
Total
258,464
280,576
302,282
F-80
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
36. OPERATING EXPENSES — PERSONNEL
2003
2004
2005
(As restated*)
Salaries and related benefits
1,574,181
1,796,914
2,165,895
Vacation pay, incentives and other benefits
816,055
1,156,069
1,615,640
Early retirements
355,735
243,466
486,374
Net periodic post-retirement health care benefit cost
    (Note 44)
641,435
416,276
488,586
Net periodic pension cost (Note 42)
190,974
572,419
532,331
Employee income tax
468,805
523,787
856,451
Long service awards (Note 43)
219,239
36,861
201,878
Housing
116,858
103,459
113,673
Medical
9,682
12,190
18,019
Other employee benefits (Note 42)
4,439
11,510
5,954
Others
42,693
37,014
78,246
Total
4,440,096
4,909,965
6,563,047
37.
OPERATING EXPENSES — OPERATIONS, MAINTENANCE AND
    TELECOMMUNICATION SERVICES
2003
2004
2005
Operations and maintenance
1,744,806
2,398,159
3,075,092
Concession fees
610,719
807,309
1,257,376
Cost of phone, SIM and RUIM cards
181,272
366,661
582,351
Electricity, gas and water
300,432
385,662
372,526
Vehicles and supporting facilities
115,697
181,737
217,217
Insurance
157,075
151,297
136,378
Leased lines
127,021
132,829
124,253
Travelling
29,815
42,213
33,455
Others
71,856
63,720
117,693
Total
3,338,693
4,529,587
5,916,341
* The 2004 figures have been restated due to the adoption
of PSAK 24R. (see Note 4a).
F-81
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
38. OPERATING EXPENSES — GENERAL AND
ADMINISTRATIVE
2003
2004
2005
Professional fees
115,598
137,355
131,047
Collection expenses
273,767
358,957
379,056
Amortization of goodwill and other intangible assets
    (Note 15)
730,659
872,330
918,153
Training, education and recruitment
126,927
228,524
177,853
Travel
144,677
192,567
171,657
Security and screening
110,278
143,892
164,416
General and social contribution
113,785
111,838
204,326
Printing and stationery
50,535
80,972
50,190
Meetings
42,813
58,333
40,311
Provision for doubtful accounts and inventory obsolescence
326,419
357,695
488,973
Research and development
9,111
13,225
8,396
Others
34,208
44,159
29,573
Total
2,078,777
2,599,847
2,763,951
39.
INCOME TAX
a.
Prepaid taxes
2004
2005
The Company
Refundable corporate income tax — overpayment
38,370
—
38,370
—
Subsidiaries
Corporate income tax
34,515
13,352
Value added tax
4,343
5,561
38,858
18,913
77,228
18,913
F-82
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
b.
Taxes payable
2004
2005
The Company
Income tax
Article 21
35,970
64,793
Article 22
3,057
5,055
Article 23
25,223
46,132
Article 25
94,857
117,281
Article 26
31,165
1,143
Article 29
508,909
376,140
Value added tax
101,683
256,523
800,864
867,067
Subsidiaries
Income tax
Article 4
4,437
3,318
Article 21
38,853
25,059
Article 22
930
—
Article 23
46,636
55,928
Article 25
151,318
203,254
Article 26
9,515
72,252
Article 29
427,641
1,207,247
Value added tax
112,285
35,640
791,615
1,602,698
1,592,479
2,469,765
F-83
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
c.
The components of income tax expense (benefit) are
    as follows:
2003
2004
2005
(As restated*)
Current
The Company
1,886,283
1,922,238
2,034,248
Subsidiaries
1,904,997
2,344,873
3,685,396
3,791,280
4,267,111
5,719,644
Deferred
The Company
(198,719
)
(330,630
)
(694,843
)
Subsidiaries
268,529
242,045
159,086
69,810
(88,585
)
(535,757
)
3,861,090
4,178,526
5,183,887
* The 2004 figures have been restated due to the adoption
of PSAK 24R (see Note 4a).
F-84
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
d.
Corporate income tax is computed for each
    individual company as a separate legal entity (consolidated
    financial statements are not applicable for computing corporate
    income tax)
.
The reconciliation of consolidated income before tax to income
    before tax attributable to the Company and the consolidated
    income tax expense are as follows:
2003
2004
2005
(As restated*)
Consolidated income before tax
11,451,795
12,749,395
16,241,424
Add back consolidation eliminations
3,332,176
3,936,524
5,737,400
Consolidated income before tax and eliminations
14,783,971
16,685,919
21,978,824
Deduct income before tax of the subsidiaries
(7,009,179
)
(8,485,296
)
(12,645,854
)
Income before tax attributable to the Company
7,774,792
8,200,623
9,332,970
Less: Income subject to final tax
(279,142
)
(206,601
)
(285,075
)
7,495,650
7,994,022
9,047,895
Tax calculated at progressive rates
2,248,678
2,398,189
2,714,351
Non-taxable income
(1,017,791
)
(1,181,983
)
(1,724,483
)
Non-deductible expenses
328,835
322,884
315,041
Deferred tax (assets) liabilities originating from
    previously unrecognized temporary differences, net
71,144
(14,940
)
(6,900
)
Deferred tax assets that cannot be utilized, net
—
24,045
—
Corporate income tax expense
1,630,866
1,548,195
1,298,009
Final income tax expense
56,698
43,413
41,396
Total income tax expense of the Company
1,687,564
1,591,608
1,339,405
Income tax expense of the subsidiaries
2,173,526
2,586,918
3,844,482
Total consolidated income tax expense
3,861,090
4,178,526
5,183,887
The reconciliation between income before tax attributable to the
    Company and the estimated taxable income for the years ended
    December 31, 2003, 2004 and 2005 is as follows:
2003
2004
2005
(As restated*)
Income before tax attributable to the Company
7,774,792
8,200,623
9,332,970
Less: Income subject to final tax
(279,142
)
(206,601
)
(285,075
)
7,495,650
7,994,022
9,047,895
Temporary differences:
Depreciation of property, plant and equipment
442,029
415,805
880,578
Gain on sale of property, plant and equipment
(25,495
)
(12,874
)
(2,143
)
Allowance for doubtful accounts
166,341
491,577
308,193
Accounts receivable written-off
(79,728
)
(91,865
)
(336,715
)
Allowance for inventory obsolescence
5,543
11,385
11,228
* The 2004 figures have been restated due to the adoption
of PSAK 24R (see Note 4a).
F-85
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
2003
2004
2005
(As restated*)
Inventory written-off
(693
)
—
(12,183
)
Accrued early retirement benefits
(538,170
)
(132,810
)
—
Accrued employee benefits
262,082
(139,064
)
67,792
Net periodic pension cost
(271,503
)
(264,796
)
(164,008
)
Long service awards
(15,617
)
(46,908
)
69,264
Amortization of intangible assets
751,927
851,060
896,883
Amortization of landrights
(2,356
)
(3,419
)
(3,441
)
Provision for impairment of property, plant and equipment
(6,401
)
—
616,768
Gain on sale of long-term investments
(171,334
)
—
—
Temporary differences of KSO units
4,782
—
—
Depreciation of property, plant and equipment under
    revenue-sharing arrangements
63,424
82,415
96,114
Amortization of unearned income on revenue-sharing arrangements
(58,379
)
(82,033
)
(135,662
)
Revenue from transfer of property, plant and equipment under
    revenue-sharing arrangements
34,828
—
—
Interest income/receivable
(45,835
)
45,835
—
Payments of liability of business acquisition and the related
    interest
—
(233,337
)
(405,302
)
Consultant fees for acquisition of business
—
(27,797
)
—
Foreign exchange loss on liability of business acquisition
—
342,073
190,206
Foreign exchange losses capitalized to property under
    construction
—
(74,283
)
—
Capital leases
—
—
21,359
Loss on procurement commitments
—
—
79,359
Other provisions
—
—
114,854
Total temporary differences
515,445
1,130,964
2,293,144
Permanent differences:
Net periodic post-retirement health care benefit cost
634,385
408,498
483,045
Amortization of goodwill
21,270
21,270
21,270
Amortization of discount on promissory notes
224,931
109,786
74,632
Tax penalties
—
14,645
59,850
Equity in net income of associates and subsidiaries
(3,313,831
)
(3,939,944
)
(5,748,277
)
Gain on sale of long-term investments
(38,425
)
—
—
* The 2004 figures have been restated due to the adoption
of PSAK 24R (see Note 4a).
F-86
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
2003
2004
2005
(As restated*)
Income from land/building rental
(40,380
)
—
—
Others
599,631
523,568
411,339
Total permanent differences
(1,912,419
)
(2,862,177
)
(4,698,141
)
Taxable income subject to corporate income tax
6,098,676
6,262,809
6,642,898
Corporate income tax expense
1,829,585
1,878,825
1,992,852
Final income tax expense
56,698
43,413
41,396
Total current income tax expense of the Company
1,886,283
1,922,238
2,034,248
Current income tax expense of the subsidiaries
1,904,997
2,344,873
3,685,396
Total current income tax expense
3,791,280
4,267,111
5,719,644
In 2003, Telkomsel received tax assessment letters for all taxes
covering the fiscal years 2000 and 2001. Telkomsel filed an
objection on a portion of the 2001 assessments which was partly
approved by Director of General of Taxes. As a result, Telkomsel
charged tax underpayments to expense in 2003 amounting to
Rp32,283 million.
* The 2004 figures have been restated due to the adoption
of PSAK 24R (see Note 4a).
F-87
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
e.
Deferred tax assets and liabilities
The details of the Company's and subsidiaries'
deferred tax assets and liabilities are as follows:
(Charged)/
Credited to
December 31,
Business
Statements of
December 31,
2003
Acquisitions
Income
2004
(As restated*)
(As restated*)
The Company
Deferred tax assets:
Allowance for doubtful accounts
118,845
—
88,834
207,679
Allowance for inventory obsolescence
11,527
—
3,967
15,494
Long-term investments
(14,138
)
—
18,823
4,685
Accrued early retirement benefits
39,843
—
(39,843
)
—
Accrued employee benefits
84,385
—
(41,720
)
42,665
Accrued long service awards
142,084
—
(14,073
)
128,011
Net periodic pension cost
511,143
—
(77,704
)
433,439
Liabilities of business acquisitions
—
985,609
24,323
1,009,932
Total deferred tax assets
893,689
985,609
(37,393
)
1,841,905
Deferred tax liabilities:
Interest receivables
(13,750
)
—
13,750
—
Difference between book and tax property, plant and
    equipment's net book value
(1,568,675
)
(713,140
)
83,161
(2,198,654
)
Landrights
(546
)
—
(1,025
)
(1,571
)
Revenue-sharing arrangements
(58,453
)
—
16,816
(41,637
)
Intangible assets
(1,527,798
)
(341,909
)
255,321
(1,614,386
)
Total deferred tax liabilities
(3,169,222
)
(1,055,049
)
368,023
(3,856,248
)
Deferred tax liabilities of the Company, net
(2,275,533
)
(69,440
)
330,630
(2,014,343
)
Deferred tax liabilities of the subsidiaries, net
(671,179
)
—
(242,045
)
(913,224
)
Total deferred tax liabilities, net
(2,946,712
)
(2,927,567
)
* The 2004 figures have been restated due to the adoption
of PSAK 24R (see Note 4a).
F-88
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
(Charged)/
Credited to
December 31,
Business
Statements
December 31,
2004
Acquisitions
of Income
2005
(As restated*)
The Company
Deferred tax assets:
Allowance for doubtful accounts
207,679
—
(2,283
)
205,396
Allowance for inventory obsolescence
15,494
—
(1,842
)
13,652
Long-term investments
4,685
—
1,981
6,666
Accrued employee benefits
42,665
—
20,338
63,003
Accrued long service awards
128,011
—
20,780
148,791
Net periodic pension cost
433,439
—
(49,202
)
384,237
Capital leases
—
—
6,408
6,408
Liabilities of business acquisitions
1,009,932
—
(64,529
)
945,403
Accrued expenses
—
—
58,265
58,265
Total deferred tax assets
1,841,905
—
(10,084
)
1,831,821
Deferred tax liabilities:
Difference between book and tax property, plant and
    equipment's net book value
(2,198,654
)
—
432,437
(1,766,217
)
Landrights
(1,571
)
—
(1,033
)
(2,604
)
Revenue-sharing arrangements
(41,637
)
—
4,461
(37,176
)
Intangible assets
(1,614,386
)
—
269,062
(1,345,324
)
Total deferred tax liabilities
(3,856,248
)
—
704,927
(3,151,321
)
Deferred tax liabilities of the Company, net
(2,014,343
)
—
694,843
(1,319,500
)
Deferred tax liabilities of the subsidiaries, net
(913,224
)
—
(159,086
)
(1,072,310
)
Total deferred tax liabilities, net
(2,927,567
)
(2,391,810
)
The net deferred tax liabilities of subsidiaries as of
December 31, 2005 included deferred tax assets of
Rp123,309 million arising from tax loss carryforwards
amounting to Rp411,030 million which will expire in 2006.
Realization of the deferred tax assets is dependent upon
profitable operations. Although realization is not assured, the
Company and its subsidiaries believe that it is probable that
these deferred tax assets will be realized through the reduction
of future taxable income. The amount of deferred tax assets
considered realizable, however, could be reduced if actual
future taxable income is lower than estimated.
* The 2004 figures have been restated due to the adoption
of PSAK 24R (see Note 4a).
F-89
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
f.
Administration
Under the taxation laws of Indonesia, the Company submits tax
returns on the basis of self-assessment. The tax authorities may
assess or amend taxes within ten years from the date the tax
became payable.
The Company and its subsidiaries are being audited by the tax
authorities for various fiscal years. These tax audits are not
finalized at the date of these financial statements; however,
management believes that the outcome of these tax audits will
not be significant.
40.
BASIC EARNINGS PER SHARE
Net income per share is computed by dividing net income by the
weighted average number of shares outstanding during the year,
totaling 20,159,999,280 in 2003, 2004 and 2005.
The Company does not have potentially dilutive ordinary shares.
41.
CASH DIVIDENDS AND GENERAL RESERVE
Pursuant to the Annual General Meeting of Shareholders as stated
in notarial deed No. 17/ V/2003 dated May 9, 2003 of
A. Partomuan Pohan, S.H., LL.M., the stockholders approved the
distribution of cash dividends for 2002 amounting to
Rp3,338,109 million or Rp331.16 per share
(pre-split — Note 1b), and appropriation of
Rp813,664 million for general reserve.
In connection with the restatement of the consolidated financial
statements for the three years ended December 31, 2002, the
stockholders ratified the previous declaration of dividends in
the Extraordinary General Meeting of Stockholders as stated in
notarial deed No. 4 dated March 10, 2004 of Notary A.
Partomuan Pohan, S.H., LLM. as follows:
•
Dividends for 2002 amounting to Rp3,338,109 million or
    Rp331.16 per share (pre-split), social contribution fund
    ("Dana Bina Lingkungan") of Rp20,863 million and
    appropriated Rp813,664 million for general reserves.
•
Dividends for 2001 amounting to Rp2,125,055 million or
    Rp210.82 per share (pre-split), and appropriated
    Rp425,012 million for general reserves.
•
Dividends for 2000 amounting to Rp888,654 million or
    Rp88.16 per share (pre-split), and appropriated
    Rp126,950 million for general reserves.
Pursuant to the Annual General Meeting of Shareholders as stated
in notarial deed No. 25 dated July 30, 2004 of A.
Partomuan Pohan, S.H., LL.M., the stockholders approved the
distribution of cash dividends for 2003 amounting to
Rp3,043,614 million or Rp301.95 per share (pre-split)
and appropriation of Rp121,745 million for general reserve.
On December 7, 2004, the Company decided to distribute 2004
interim cash dividends of Rp143,377 million or
Rp7.11 per share to the Company's stockholders.
Pursuant to the Annual General Meeting of Shareholders as stated
in notarial deed No. 36 dated June 24, 2005 of A.
Partomuan Pohan, S.H., LL.M., the stockholders approved the
distribution of cash dividends for 2004 amounting to
Rp3,064,604 million or Rp152.01 per share (of which
F-90
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
Rp143,377 million or Rp7.11 per share was distributed
as interim cash dividends in December 2004) and appropriation of
Rp122,584 million for general reserve.
42.
PENSION PLANS
a.
The Company
The Company sponsors a defined benefit pension plan and a
defined contribution pension plan.
The defined benefit pension plan is provided for employees hired
with permanent status prior to July 1, 2002. The pension
benefits are paid based on the participating employees'
latest basic salary at retirement and years of service. The plan
is managed by Telkom Pension Fund (Dana Pensiun Telkom). The
participating employees contribute 18% (before March 2003: 8.4%)
of their basic salaries to the plan. The Company's
contributions to the pension fund for the years ended
December 31, 2003, 2004 and 2005 amounted to
Rp486,324 million, Rp845,743 million and
Rp698,526 million, respectively.
In 2002, the Company amended its defined benefit pension plan to
increase the pension benefits for certain participating
employees above 56 years of age, beneficiaries of deceased
participating employees or employees with physical disabilities.
The increase applies to participating employees who retired on
or after July 1, 2002. The Company also increased pension
benefits for employees who retired prior to August 1, 2000
by 50%, effective January 1, 2003.
The defined contribution pension plan is provided for employees
hired with permanent status on or after July 1, 2002. The
plan is managed by a financial institution pension fund (Dana
Pensiun Lembaga Keuangan). The Company's annual
contribution to the defined contribution pension plan is
determined based on a certain percentage of the
participants' salaries and amounted to Rp124 million,
Rp399 million and Rp971 million in 2003, 2004 and
2005, respectively.
F-91
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
The following table presents the change in projected benefit
obligation, the change in plan assets, funded status of the plan
and the net amount recognized in the Company's balance
sheets for the years ended December 31, 2004 and 2005 for
its defined benefit pension plan:
2004
2005
(As restated*)
Change in projected benefit obligation
Projected benefit obligation at beginning of year
6,852,923
7,315,182
Service cost
137,264
138,117
Interest cost
740,494
789,830
Plan participants' contributions
43,906
41,371
Actuarial gain
(155,128
)
(794,180
)
Benefits paid
(304,277
)
(350,220
)
Projected benefit obligation at end of year
7,315,182
7,140,100
Change in plan assets
Fair value of plan assets at beginning of year
3,671,309
4,884,523
Actual return on plan assets
627,842
155,754
Employer contribution
845,743
698,526
Plan participants' contributions
43,906
41,371
Benefits paid
(304,277
)
(350,220
)
Fair value of plan assets at end of year
4,884,523
5,429,954
Funded status
(2,430,659
)
(1,710,146
)
Unrecognized prior service cost
1,329,046
1,190,024
Unrecognized net actuarial gain
(346,298
)
(762,899
)
Accrued pension benefit cost
(1,447,911
)
(1,283,021
)
The movement of the accrued pension benefit cost during the
years ended December 31, 2004 and 2005 is as follows:
2004
2005
(As restated*)
Accrued pension benefit cost at beginning of year
1,713,546
1,447,911
Net periodic pension cost less amounts charged to KSO Units
563,739
514,976
Amounts charged to KSO Units under contractual agreement
16,369
18,660
Contributions
(845,743
)
(698,526
)
Accrued pension benefit cost at end of year
1,447,911
1,283,021
As of December 31, 2004 and 2005, plan assets consist
mainly of Indonesian Government Bonds and corporate bonds. As of
December 31, 2004, plan assets include bonds and
Series B shares issued by the Company with fair values of
Rp159,253 million and Rp96,063 million, respectively.
As of
* The 2004 figures have been restated due to the adoption
of PSAK 24R (see Note 4a).
F-92
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
December 31, 2005, plan assets include bonds and
Series B shares issued by the Company with fair values of
Rp223,736 million and Rp124,189 million, respectively.
The actuarial valuations for the defined benefit pension plan
performed based on measurement date of December 31 for each
of the years were prepared on May 21, 2004, March 15,
2005 and February 27, 2006, respectively, by PT Watson
Wyatt Purbajaga, an independent actuary in association with
Watson Wyatt Worldwide. The principal actuarial assumptions used
by the independent actuary as of December 31, 2003, 2004
and 2005 are as follows.
2003
2004
2005
Discount rate
11
%
11
%
11
%
Expected long-term return on plan assets
11
%
10.5
%
10.5
%
Rate of compensation increase
8
%
8
%
8.8
%
The components of net periodic pension cost are as follows:
2003
2004
2005
(As restated*)
Service cost
119,089
137,264
138,117
Interest cost
537,797
740,494
789,830
Expected return on plan assets
(421,706
)
(436,672
)
(533,333
)
Amortization of prior service cost
156,784
139,022
139,022
Recognized actuarial gain
(205,099
)
—
—
Amortization of unrecognized net transition obligation
28,634
—
—
Net periodic pension cost
215,499
580,108
533,636
Amount charged to KSO Units under contractual agreement
(29,896
)
(16,369
)
(18,660
)
Total net periodic pension cost less amounts charged to KSO
    Units (Note 36)
185,603
563,739
514,976
b.
Telkomsel
Telkomsel provides a defined benefit pension plan for its
employees under which pension benefits to be paid are based on
the employee's latest basic salary and number of years of
service. PT Asuransi Jiwasraya ("Jiwasraya"), a
state-owned life insurance company, manages the plan. Up to
2004, the employees contributed 5% of their monthly basic
salaries to the plan and Telkomsel contributed any remaining
amount required to fund the plan. Beginning in 2005, the entire
contributions are borne by Telkomsel.
* The 2004 figures have been restated due to the adoption
of PSAK 24R (see Note 4a).
F-93
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
Telkomsel's contributions to Jiwasraya amounted to
Rp3,081 million, nil and Rp14,928 million for the
years ended 2003, 2004 and 2005, respectively.
The components of the net periodic pension cost are as follows:
2003
2004
2005
Service cost
3,068
4,155
10,072
Interest cost
2,499
3,889
6,650
Expected return on plan assets
(1,013
)
(824
)
(832
)
Amortization of prior service cost
—
115
115
Recognized actuarial loss
579
1,158
1,320
Amortization of unrecognized net transition obligation
178
—
—
Net periodic pension cost (Note 36)
5,311
8,493
17,325
The net periodic pension cost for the pension plan is calculated
based on the actuarial calculation prepared by PT Watson Wyatt
Purbajaga, an independent actuary in association with Watson
Wyatt Worldwide. The principal actuarial assumptions used by the
independent actuary based on measurement date of
December 31 for each of the years are as follows:
2003
2004
2005
Discount rate
11
%
11
%
11
%
Expected long-term return on plan assets
7.5
%
7.5
%
7.5
%
Rate of compensation increase
9
%
9
%
8
%
The reconciliation of the funded status of the plan with the net
amount recognized in the balance sheets of Telkomsel as of
December 31, 2004 and 2005 is as follows:
2004
2005
Projected benefit obligation
(43,547
)
(147,103
)
Fair value of plan assets
11,182
20,971
Funded status
(32,365
)
(126,132
)
Unrecognized prior service cost
1,328
1,213
Unrecognized net actuarial loss
20,707
103,391
Accrued pension benefit cost
(10,330
)
(21,528
)
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
c.
Infomedia
Infomedia provides a defined benefit pension plan for its
employees. The reconciliation of the funded status of the plan
with the net amount recognized in the balance sheets as of
December 31, 2004 and 2005 is as follows:
2004
2005
Projected benefit obligation
(4,051
)
(5,225
)
Fair value of plan assets
5,413
5,865
Funded status
1,362
640
Prepaid pension benefit cost
1,362
640
The net periodic pension cost of Infomedia amounted to
Rp60 million, Rp187 million and Rp30 million for
the years ended December 31, 2003, 2004 and 2005,
respectively.
d.
Obligation Under Labor Law
Under Law No. 13/2003 concerning labor regulation, the
Company and its subsidiaries are required to provide a minimum
pension benefit, if not already covered by the sponsored pension
plans, to their employees upon retiring at the age of 55. The
total related obligation recognized as of December 31, 2004
and 2005 amounted to Rp21,677 million and
Rp26,115 million, respectively. The total related employee
benefit cost charged to expense amounted to
Rp4,439 million, Rp11,510 million and
Rp5,954 million for the years ended December 31, 2003,
2004 and 2005, respectively.
43.
LONG SERVICE AWARDS
a.
The Company
The Company provides certain cash awards for its employees who
meet certain length of service requirement. The benefits are
either paid at the time the employee reaches certain anniversary
dates during employment, upon retirement or termination.
The actuarial valuations for the long service awards performed
based on measurement date of December 31 for each of the
years were prepared on May 21, 2004, March 15, 2005
and February 27, 2006, respectively, by PT Watson Wyatt
Purbajaga, an independent actuary in association with Watson
Wyatt Worldwide. The principal actuarial assumptions used by the
independent actuary as of December 31, 2003, 2004 and 2005
are as follows:
2003
2004
2005
Discount rate
11
%
11
%
11
%
Rate of compensation increase
8
%
8
%
8
%
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
The movement of the accrued long service awards during the years
ended December 31, 2003, 2004 and 2005 is as follows:
2003
2004
2005
(As restated*)
Accrued long service awards at beginning of year
489,231
473,614
426,705
Net periodic benefit cost (Note 36)
207,126
31,148
192,450
Benefits paid
(222,743
)
(78,057
)
(123,186
)
Accrued long service awards at end of year
473,614
426,705
495,969
b.
Telkomsel
Telkomsel provides certain cash awards for its employees based
on the employees' length of service. The benefits are
either paid at the time the employee reaches certain anniversary
dates during employment, upon retirement or at the time of
termination.
The obligation with respect to these awards is determined based
on actuarial valuation using the Projected Unit Credit Method,
and amounted to Rp23,136 million and Rp28,555 million
as of December 31, 2004 and 2005, respectively. The related
benefit cost charged to expense amounted to
Rp12,113 million, Rp5,713 million and
Rp9,428 million for the years ended December 31, 2003,
2004 and 2005, respectively.
44. POST-RETIREMENT HEALTH CARE BENEFITS
The Company provides a post-retirement health care plan for all
of its employees hired before November 1, 1995 who have
worked for the Company for 20 years or more when they
retire, and to their eligible dependents. The requirement of
working for over 20 or more years does not apply to 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 2004 figures have been restated due to the adoption
of PSAK 24R (see Note 4a).
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
The components of net periodic post-retirement health care
benefit cost are as follows:
2003
2004
2005
(As restated*)
Service cost
88,394
76,163
87,636
Interest cost
493,596
411,110
507,994
Expected return on plan assets
(56,004
)
(61,084
)
(103,498
)
Amortization of prior service gain
(368
)
—
—
Recognized actuarial loss
99,287
—
8,081
Amortization of unrecognized net transition obligation
24,325
—
—
Net periodic post-retirement benefit cost
649,230
426,189
500,213
Amounts charged to KSO Units under contractual agreement
(7,795
)
(9,913
)
(11,627
)
Total net periodic post-retirement benefit cost less amounts
    charged to KSO Units (Note 36)
641,435
416,276
488,586
The actuarial valuations for the post-retirement health care
benefits performed based on measurement date of December 31
for each of the years were prepared on May 21, 2004,
March 15, 2005 and February 27, 2006, respectively, by
PT Watson Wyatt Purbajaga, an independent actuary in association
with Watson Wyatt Worldwide.
The principal actuarial assumptions used by the independent
actuary as of December 31, 2003, 2004 and 2005 are as
follows:
2003
2004
2005
Discount rate
11
%
11
%
11
%
Expected long-term return on plan assets
11
%
8
%
8
%
Health care cost trend rate assumed for next year
12
%
12
%
9
%
The ultimate trend rate
8
%
8
%
9
%
Year that the rate reaches the ultimate trend rate
2006
2007
2006
* The 2004 figures have been restated due to the adoption
of PSAK 24R (see Note 4a).
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
The following table presents the change in projected benefit
obligation, the change in plan assets, funded status of the plan
and the net amount recognized in the Company's balance
sheets as of December 31, 2004 and 2005:
2004
2005
(As restated*)
Change in projected benefit obligation
Projected benefit obligation at beginning of year
3,787,389
4,681,005
Service cost
76,163
87,636
Interest cost
411,110
507,994
Actuarial loss
529,618
423,833
Benefits paid
(123,275
)
(125,979
)
Projected benefit obligation at end of year
4,681,005
5,574,489
Change in plan assets
Fair value of plan assets at beginning of year
505,340
1,138,768
Actual return on plan assets
32,173
45,209
Employer contributions
724,530
435,899
Benefits paid
(123,275
)
(125,979
)
Fair value of plan assets at end of year
1,138,768
1,493,897
Funded status
(3,542,237
)
(4,080,592
)
Unrecognized net actuarial loss
558,530
1,032,571
Accrued post-retirement health care benefit cost
(2,983,707
)
(3,048,021
)
As of December 31, 2004, plan assets include Medium-term
Notes issued by the Company with fair value of
Rp145,000 million. As of December 31, 2005, plan
assets include bonds and Medium-term Notes issued by the Company
with total fair value of Rp232,394 million.
The movement of the accrued post-retirement health care benefit
cost during the years ended December 31, 2004 and 2005 is
as follows:
2004
2005
(As restated*)
Accrued post-retirement health care benefit cost at beginning of
    year
3,282,048
2,983,707
Net periodic post-retirement health care benefit cost less
    amounts charged to KSO Units
416,276
488,586
Amounts charged to KSO Units under contractual agreement
9,913
11,627
Contributions
(724,530
)
(435,899
)
Accrued post-retirement health care benefit cost at end of year
2,983,707
3,048,021
* The 2004 figures have been restated due to the adoption
of PSAK 24R (see Note 4a).
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
A 1% increase in the cost trend rate would result in service
cost and interest cost, and accumulated post-retirement health
care benefit obligation as of December 31, 2003, 2004 and
2005 as follows:
2003
2004
2005
Service cost and interest cost
594,958
723,941
872,159
Accumulated post-retirement health care benefit obligation
4,545,961
5,597,965
6,718,434
45. RELATED PARTY INFORMATION
In the normal course of business, the Company and its
subsidiaries entered into transactions with related parties. It
is the Company's policy that the pricing of these
transactions be the same as those of arms-length transactions.
The following are significant agreements/transactions with
related parties:
a.
Government of the Republic of Indonesia
i. The Company obtained "two-step loans" from the
Government of the Republic of Indonesia, the Company's
majority stockholder.
Interest expense for two-step loans amounted to
Rp755,517 million, Rp489,220 million and
Rp324,652 million in 2003, 2004 and 2005, respectively.
Interest expense for two-step loan reflected 54.6%, 38.5% and
27.6% of total interest expense in 2003, 2004 and 2005,
respectively.
ii. The Company and its subsidiaries pay 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 Rp238,979 million,
Rp314,741 million and Rp558,485 million in 2003, 2004
and 2005, respectively. Concession fees reflected 1.6%, 1.6% and
2.3% of total operating expenses in 2003, 2004 and 2005,
respectively. Radio frequency usage charges amounted to
Rp371,740 million, Rp492,568 million and
Rp548,186 million in 2003, 2004 and 2005, respectively.
Radio frequency usage charges reflected 2.5%, 2.5% and 2.2% of
total operating expenses in 2003, 2004 and 2005, respectively.
iii. Beginning in 2005, the Company and its subsidiaries
pay Universal Service Obligation ("USO") charges to
the Ministry of Communications and Information
("MoCI") of the Republic of Indonesia pursuant to the
MoCI Regulation No. 15/ PER/ M.KOMINFO/9/2005 of
September 30, 2005.
USO charges amounted to Rp307,705 million in 2005, which
reflected 1.2% of total operating expenses in 2005.
b.
Commissioners and Directors Remuneration
i. The Company and its subsidiaries provide honorarium and
facilities to support the operational duties of the Board of
Commissioners. The total of such benefits amounted to
Rp14,047 million, Rp22,700 million and
Rp19,707 million in 2003, 2004 and 2005, respectively,
which reflected 0.1%, 0.1% and 0.1% of total operating expenses
in 2003, 2004 and 2005, respectively.
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
ii. The Company and its subsidiaries provide salaries and
facilities to support the operational duties of the Board of
Directors. The total of such benefits amounted to
Rp45,586 million, Rp50,327 million and
Rp52,147 million in 2003, 2004 and 2005, respectively,
which reflected 0.3%, 0.3% and 0.2% of total operating expenses
in 2003, 2004 and 2005, respectively.
c.
Indosat
Through December 19, 2002, the Government was the majority
and controlling shareholder of Indosat and therefore, Indosat
was under the same common control as the Company. Following the
sale of the Government's 41.94% ownership interest in
Indosat on December 20, 2002 (Note 29), the
Government's ownership interest in Indosat was reduced to
approximately 15%. The Company still considers Indosat as a
related party because the Government can exert significant
influence over the financial and operating policies of Indosat
by virtue of its right to appoint one director and one
commissioner of Indosat.
Following the merger of Indosat, PT Indosat Multimedia Mobile
("IM3"), Satelindo and PT Bimagraha Telekomindo on
November 20, 2003, all rights and obligations arising from
the agreements entered by the Company with IM3 and Satelindo
were transferred to Indosat.
The Company has an agreement with Indosat for the provision of
international telecommunications services to the public.
The principal matters covered by the agreement are as follows:
i. The Company provides a local network for 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, package switched data network, television,
    teleprinter, Alternate Voice/ Data Telecommunications
    ("AVD"), hotline and teleconferencing.
ii. The Company and Indosat are responsible for their
    respective telecommunications facilities.
iii. Customer billing and collection, except for leased
    lines and public phones located at the international gateways,
    are handled by the Company.
iv. The Company receives compensation for the services
    provided in the first item above, based on the interconnection
    tariff determined by the Minister of Communications of the
    Republic of Indonesia.
The Company has also entered into an interconnection agreement
between the Company's fixed-line network and Indosat's
cellular network in connection with the implementation of
Indosat Multimedia Mobile services and the settlement of the
related interconnection rights and obligations.
The Company also has an agreement with Indosat for the
interconnection of Indosat'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 Indosat's customers.
The Company's compensation relating to leased lines/channel
services, such as International Broadcasting System
("IBS"), AVD and bill printing is calculated at 15% of
Indosat's revenues from
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
such services. Through year-end 2003, Indosat leased circuits
from the Company to link Jakarta, Medan and Surabaya. In 2004
and 2005, Indosat did not use this service.
The Company has been handling customer billings and collections
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 beginning January 1, 1995,
plus the billing process expenses which are fixed at a certain
amount per record.
Telkomsel also entered into an agreement with Indosat for the
provision of international telecommunications services to GSM
mobile cellular customers. The principal matters covered by the
agreement are as follows:
i. Telkomsel's GSM mobile cellular telecommunications
    network is connected to Indosat's international gateway
    exchanges to make outgoing or receive incoming international
    calls through Indosat's international gateway exchanges.
ii. Telkomsel's GSM mobile cellular telecommunications
    network is connected to Indosat's mobile cellular
    telecommunications network, enabling Telkomsel's cellular
    subscribers to make outgoing calls to or receive incoming calls
    from Indosat's cellular subscribers.
iii. Telkomsel receives as compensation for the
    interconnection, a specific percentage of Indosat's
    revenues from the related services which are made through
    Indosat's international gateway exchanges and mobile
    cellular telecommunications network.
iv. Billings for calls made by Telkomsel's customers
    are handled by Telkomsel. Telkomsel is obliged to pay
    Indosat's share of revenue regardless whether billings to
    customers have been collected.
v. The provision and installation of the necessary
    interconnection equipment is Telkomsel's responsibility.
    Interconnection equipment installed by one of the parties in
    another party's locations shall remain the property of the
    party installing such equipment. Expenses incurred in connection
    with the provision of equipment, installation and maintenance
    are borne by Telkomsel.
Telkomsel also has an agreement with Indosat on the usage of
Indosat's telecommunications facilities. The agreement,
which was made in 1997 and is valid for eleven years, is subject
to change based on an annual review and mutual agreement by both
parties. The charges for the usage of the facilities amounted to
Rp17,933 million, Rp19,101 million and
Rp19,066 million in 2003, 2004 and 2005, respectively,
reflecting 0.1%, 0.1% and 0.1% of total operating expenses in
2003, 2004 and 2005, respectively. Other agreements between
Telkomsel and Indosat are as follows:
i. Agreement on Construction and Maintenance for
    Jakarta-Surabaya Cable System
("J-S
Cable
    System").
On October 10, 1996, Telkomsel, Lintasarta, Satelindo and
    Indosat (the "Parties") entered into an agreement on
    the construction and maintenance of the J-S Cable System. The
    Parties have formed a management committee which consists of a
    chairman and one representative from each of the Parties to
    direct the construction and operation of the cable system. The
    construction of the cable system was completed in 1998. In
    accordance with the agreement, Telkomsel shared 19.325% of the
    total construction cost. Operating and maintenance costs are
    shared based on an agreed formula.
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
Telkomsel's share in operating and maintenance costs
    amounted to Rp1,393 million, Rp2,098 million and
    Rp1,187 million for the years 2003, 2004 and 2005,
    respectively.
ii. Indefeasible Right of Use Agreement
On September 21, 2000, Telkomsel entered into agreement
    with Indosat on the use of SEA — ME — WE 3
    and tail link in Jakarta and Medan. In accordance with the
    agreement, Telkomsel was granted an indefeasible right to use
    certain capacity of the Link starting from September 21,
    2000 until September 20, 2015 in return for an upfront
    payment of US$2.7 million. In addition to the upfront
    payment, Telkomsel is also charged annual operating and
    maintenance costs amounting to US$0.1 million.
Pursuant to the expiration of the agreement between Telkomsel
and Indosat with regard to the provision of international
telecommunication services to GSM mobile cellular customers, in
April 2004 Telkomsel and Indosat entered into an interim
agreement. Under the terms of the interim agreement, Telkomsel
receives 27% of the applicable tariff for outgoing international
calls from Telkomsel subscribers and Rp800 per minute for
incoming international calls to Telkomsel subscribers. The
interim agreement is effective from March 1, 2004 until
such date that Telkomsel and Indosat enter into a new agreement.
The Company and its subsidiaries earned net interconnection
revenues from Indosat of Rp235,655 million in 2003,
reflecting 0.9% of total operating revenues in 2003. The Company
and its subsidiaries were charged net interconnection charges
from Indosat of Rp158,285 million and Rp52,798 million
in 2004 and 2005, respectively, reflecting 0.5% and 0.1% of
total operating revenues in 2004 and 2005, respectively.
The Company leased international circuits from Indosat. Payments
made in relation to the lease expense amounted to
Rp30,239 million in 2003, reflecting 0.2% of total
operating expenses for 2003.
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. 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 Rp43,023 million to the
Company for the thirty-year right. Satelindo paid
Rp17,210 million in 1994 and the remaining
Rp25,813 million was not paid because the Utilization Right
("Hak Pengelolaan Lahan") on the land could not be
delivered as provided in the transfer agreement. In 2000, the
Company and Satelindo agreed on an alternative solution
resulting in which the payment is treated as a lease expense up
to 2006. In 2001, Satelindo paid an additional amount of
Rp59,860 million as lease expense up to 2024. As of
December 31, 2004 and 2005, the prepaid portion is shown in
the consolidated balance sheets as "Advances from customers
and suppliers."
The Company provides leased lines to Indosat and its
subsidiaries, namely Indosat Mega Media and Lintasarta. The
leased lines can be used by those companies for telephone,
telegraph, data, telex, facsimile or other telecommunication
services. Revenue earned from these transactions amounted to
Rp43,595 million, Rp109,814 million and
Rp126,425 million in 2003, 2004 and 2005, respectively,
which reflected 0.2%, 0.3% and 0.3% of total operating revenues
in 2003, 2004 and 2005, respectively.
Lintasarta utilizes the Company's satellite transponders or
frequency channels. Revenue earned from these transactions
amounted to Rp23,672 million, Rp14,486 million and
Rp8,125 million in 2003,
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
2004 and 2005, respectively, which reflected 0.1%, less than
0.1% and less than 0.1% of total operating revenues in 2003,
2004 and 2005, respectively.
Telkomsel has an agreement with Lintasarta and PT Artajasa
Pembayaran Elektronis ("Artajasa") for the usage of
data communication network system. The charges from Lintasarta
and Artajasa for the services amounted to Rp10,975 million,
Rp21,407 million and Rp23,109 million in 2003, 2004
and 2005, respectively, reflecting 0.1%, 0.1% and 0.1% of total
operating expenses in 2003, 2004 and 2005, respectively.
d.
Others
(i) The Company provides telecommunication services to
substantially all Government agencies in Indonesia.
(ii) The Company has entered into agreements with
Government agencies and associated companies, namely CSM,
Patrakom and KSO VII, for utilization of the Company's
satellite transponders or frequency channels. Revenue earned
from these transactions amounted to Rp73,205 million,
Rp51,046 million and Rp66,804 million in 2003, 2004
and 2005, respectively, which reflected 0.3%, 0.2% and 0.2% of
total operating revenues in 2003, 2004 and 2005, respectively.
(iii) The Company provides leased lines to associated
companies, namely CSM, Patrakom and PSN. The leased lines can be
used by the associated companies for telephone, telegraph, data,
telex, facsimile or other telecommunications services. Revenue
earned from these transactions amounted to
Rp44,738 million, Rp25,714 million and
Rp30,678 million in 2003, 2004 and 2005, respectively,
reflecting 0.2%, 0.1% and 0.1% of total operating revenues in
2003, 2004 and 2005, respectively.
(iv) 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 ("PT INTI"), Lembaga
Elektronika Nasional, PT Adhi Karya, PT Pembangunan Perumahan,
PT Nindya Karya, PT Boma Bisma Indra, PT Wijaya Karya, PT
Waskita Karya, PT Gratika and Koperasi Pegawai Telkom. Total
purchases made from these related parties amounted to
Rp126,965 million, Rp268,901 million and
Rp337,648 million in 2003, 2004 and 2005, respectively,
reflecting 1.1%, 2.4%, and 2.5% of total fixed asset purchases
in 2003, 2004 and 2005, respectively.
(v) PT INTI is also a major contractor and supplier of
equipment, including construction and installation services for
Telkomsel. Total purchases from PT INTI in 2003, 2004 and 2005
amounted to Rp52,346 million, Rp217,668 million and
Rp67,555 million, respectively, reflecting 0.5%, 1.9% and
0.5% of total fixed asset purchases in 2003, 2004 and 2005,
respectively.
(vi) Telkomsel has an agreement with PSN for lease of
PSN's transmission link. Based on the agreement, which was
made on March 14, 2001, the minimum lease period is
2 years since the operation of the transmission link and is
extendable subject to agreement by both parties. The lease
charges amounted to Rp40,519 million, Rp49,710 million
and Rp95,206 million in 2003, 2004 and 2005, respectively,
reflecting 0.3%, 0.3% and 0.4% of total operating expenses in
2003, 2004 and 2005, respectively.
(vii) The Company and its subsidiaries carry insurance (on
their property, plant and equipment against property losses,
inventory and on employees' social security) obtained from
PT Asuransi Jasa Indonesia, PT Asuransi Tenaga Kerja and PT
Persero Asuransi Jiwasraya, which are state-owned
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
insurance companies. Insurance premiums charged amounted to
Rp159,517 million, Rp148,279 million and
Rp58,338 million in 2003, 2004 and 2005, respectively,
reflecting 1.1%, 0.8% and 0.2% of total operating expenses in
2003, 2004 and 2005, respectively.
(viii) The Company and its subsidiaries maintain current
accounts and time deposits in several state-owned banks. In
addition, some of those banks are appointed as collecting agents
for the Company. Total placements in form of current accounts
and time deposits, and mutual funds in state-owned banks
amounted to Rp2,116,038 million and
Rp3,315,428 million as of December 31, 2004 and 2005,
respectively, reflecting 3.8% and 5.3% of total assets as of
December 31, 2004 and 2005, respectively. Interest income
recognized during 2003, 2004 and 2005 was
Rp273,986 million, Rp150,367 million and
Rp123,951 million reflecting 74.9%, 47.3% and 36% of total
interest income in 2003, 2004 and 2005, respectively.
(ix) The Company's subsidiaries have loans from a
state-owned bank. Interest expense on the loans for 2004 and
2005 amounted to Rp9,115 million and Rp5,055 million,
respectively, representing 0.7% and 0.4% of total interest
expense in 2004 and 2005, respectively.
(x) 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 — a
foundation managed by Dharma Wanita Telkom. Total charges from
these transactions amounted to Rp32,785 million,
Rp24,921 million and Rp39,146 million in 2003, 2004
and 2005, respectively, reflecting 0.2%, 0.1% and 0.2% of total
operating expenses in 2003, 2004 and 2005, respectively.
(xi) In 2003, the Company purchased encoded phone cards
from Perusahaan Umum Percetakan Uang Republik Indonesia
("Peruri"), a state-owned company. The cost of the
phone cards amounted to Rp7,730 million, reflecting 0.05%
of total operating expenses for 2003.
(xii) The Company and its subsidiaries earned (were charged
for) interconnection revenues (charges) from PSN, with a
total of Rp19,035 million, (Rp5,495 million) and
Rp1,072 million in 2003, 2004 and 2005, respectively,
reflecting 0.1%, (0.02%) and less than 0.01% of total operating
revenues in 2003, 2004 and 2005, respectively.
(xiii) In addition to revenues earned under the KSO
Agreement (Note 47), the Company also earned income from
building rental, repairs and maintenance services and training
services provided to the KSO Units, amounting to
Rp23,147 million, Rp18,449 million and
Rp26,769 million in 2003, 2004 and 2005, respectively,
reflecting 0.1%, 0.1% and 0.1% of total operating revenues in
2003, 2004 and 2005, respectively.
(xiv) The Company has revenue-sharing arrangements with
Koperasi Pegawai Telkom ("Kopegtel"). Kopegtel's
share in the revenues from these arrangements amounted to
Rp20,560 million and Rp31,909 million in 2004 and
2005, respectively, representing 0.1% and 0.1% of total
operating revenues in 2004 and 2005, respectively.
(xv) Telkomsel has operating lease agreements with Patrakom
and CSM for the usage of their transmission link for a period of
three years, subject to extensions. The lease charges amounted to
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
Rp25,032 million and Rp123,857 million in 2004 and
2005, respectively, representing 0.1% and 0.5% of total
operating expenses in 2004 and 2005, respectively.
(xvi) Kisel
is a cooperative that was established by Telkomsel's
employees to engage in car rental services, printing and
distribution of customer bills, collection and other services
principally for the benefit of Telkomsel. For these services,
Kisel charged Telkomsel Rp109,548 million and
Rp78,714 million in 2004 and 2005, respectively. Telkomsel
also has dealership agreements with Kisel for distribution of
SIM cards and pulse reload vouchers. Total SIM cards and pulse
reload vouchers which were sold to Kisel amounted to
Rp816,591 million and Rp1,158,559 million in 2004 and
2005, respectively.
(xvii) Infomedia provides electronic media and call center
services to KSO Unit VII based on an agreement dated
March 4, 2003. Revenue earned from these transactions in
2004 and 2005 amounted to Rp5,541 million and
Rp9,221 million, reflecting 0.02% and 0.02% of total
operating revenues in 2004 and 2005, respectively.
(xviii) 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:
2004 (As restated*)
2005
% of
% of
Amount
Total Assets
Amount
Total Assets
a. Cash and cash equivalents (Note 6)
1,944,154
3.46
3,058,854
4.92
b. Temporary investments
7,290
0.01
—
—
c. Trade accounts receivable, net (Note 7)
419,104
0.75
530,370
0.85
d. Other accounts receivable
KSO Units
1,300
0.00
93,959
0.15
State-owned banks (interest)
5,717
0.01
8,555
0.01
Government agencies
5,433
0.01
421
0.00
Other
16,765
0.03
16,304
0.03
Total
29,215
0.05
119,239
0.19
e. Prepaid expenses (Note 9)
22,440
0.04
299,799
0.48
f. Other current assets (Note 10)
44,608
0.08
159,537
0.26
* The 2004 figures have been restated due to the adoption
of PSAK 24R (see Note 4a).
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
2004 (As restated*)
2005
% of
% of
Amount
Total Assets
Amount
Total Assets
g. Advances and other non-current assets (Note 14)
Bank Mandiri
113,762
0.20
90,668
0.15
Peruri
813
0.00
813
0.00
PT Asuransi Jasa Indonesia
23,104
0.04
—
0.00
Total
137,679
0.24
91,481
0.15
h. Escrow accounts (Note 16)
6,222
0.01
6,369
0.01
2004 (As restated*)
2005
% of
% of
Total
Total
Amount
Liabilities
Amount
Liabilities
i. Trade accounts payable (Note 17)
Government agencies
259,678
0.78
660,166
2.03
KSO Units
24,312
0.07
15,281
0.05
Indosat
150,631
0.45
46,372
0.14
Koperasi Pegawai Telkom
78,717
0.24
78,673
0.24
PSN
39
0.00
—
—
PT INTI
77,591
0.23
125,792
0.39
Others
52,126
0.16
88,105
0.27
Total
643,094
1.93
1,014,389
3.12
j. Accrued expenses (Note 18)
Government agencies and state-owned ba
nks 204,50
4 0.62
395,791
1.22
Employees
321,237
0.97
452,413
1.39
PT Asuransi Jasa Indonesia
2,040
0.01
2,038
0.01
Others
9,729
0.03
38,442
0.11
Total
537,510
1.63
888,684
2.73
* The 2004 figures have been restated due to the adoption
of PSAK 24R (see Note 4a).
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
2004 (As restated*)
2005
% of
% of
Total
Total
Amount
Liabilities
Amount
Liabilities
k. Short-term bank loans (Note 20)
Bank Mandiri
41,433
0.13
—
—
l. Two-step loans (Note 22)
6,018,705
18.18
5,329,477
16.36
m. Accrued long service awards (Note 43)
449,841
1.36
524,524
1.61
n. Accrued post-retirement health care benefits
    (Note 44)
2,983,707
9.01
3,048,021
9.36
o. Long-term bank loans (Note 24)
Bank Mandiri
59,729
0.18
14,918
0.05
46. SEGMENT INFORMATION
The Company and its subsidiaries have three main business
segments: fixed wireline, fixed wireless and cellular. The fixed
wireline segment provides local, domestic long-distance and
international (starting 2004) telephone services, and other
telecommunications services (including among others, leased
lines, telex, transponder, satellite and Very Small Aperture
Terminal-VSAT) as well as ancillary services. The fixed wireless
segment provides CDMA-based telecommunication services which
offers customers the ability to use a wireless handset with
limited mobility (within a local code area). The cellular
segment provides basic telecommunication services, particularly
mobile cellular telecommunication services. Operating segments
that do not individually represent more than 10% of the
Company's revenues are presented as "Other"
comprising the telephone directories and building management
businesses. In 2005, a re-alignment of management
responsibilities caused a change in segment reporting. The fixed
wireless telecommunication services business segment is now
presented as a separate segment. This change in segment has been
reflected for all periods presented.
Segment revenues and expenses include transactions between
business segments and are accounted for at prices that
management believes represent market prices.
*
The 2004 figures have been restated due to the adoption of
    PSAK 24R (see Note 4a).
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
2003
Fixed
Fixed
Total Before
Total
Wireline
Wireless
Cellular
Other
Elimination
Elimination
Consolidated
Segment results
External operating revenues
15,905,112
163,384
10,797,555
249,872
27,115,923
—
27,115,923
Inter-segment operating revenues
71,938
50,715
337,100
30,824
490,577
(490,577
)
—
Total revenues
15,977,050
214,099
11,134,655
280,696
27,606,500
(490,577
)
27,115,923
Segment expense
(10,350,686
)
(246,165
)
(4,802,283
)
(275,499
)
(15,674,633
)
534,649
(15,139,984
)
Segment result
5,626,364
(32,066
)
6,332,372
5,197
11,931,867
44,072
11,975,939
Interest expense
(1,383,446
)
Interest income
366,024
Gain on foreign exchange — net
126,121
Other income (expenses) — net
364,338
Tax expense
(3,861,090
)
Equity in net income of associated companies
2,819
Income before minority interest
7,590,705
Unallocated minority interest
(1,503,478
)
Net income
6,087,227
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
2003
Fixed
Fixed
Total Before
Total
Wireline
Wireless
Cellular
Other
Elimination
Elimination
Consolidated
Other information
Segment assets
35,896,448
1,382,038
15,320,547
357,940
52,956,973
(3,880,055
)
49,076,918
Investments in associates
64,648
—
—
—
64,648
—
64,648
Unallocated corporate assets
1,141,683
Total consolidated assets
50,283,249
Segment liabilities
(4,752,981
)
(27,576
)
(1,312,045
)
(55,731
)
(6,148,333
)
2,427,484
(3,720,849
)
Unallocated corporate liabilities
(25,541,368
)
Total consolidated liabilities
(29,262,217
)
Capital expenditures
(4,320,024
)
(1,378,377
)
(5,348,783
)
(61,672
)
(11,108,856
)
—
(11,108,856
)
Depreciation and amortization
(3,090,414
)
(35,809
)
(1,680,554
)
(9,824
)
(4,816,601
)
11,916
(4,804,685
)
Amortization of goodwill and other intangible assets
(709,389
)
—
—
(21,270
)
(730,659
)
—
(730,659
)
Other non-cash expenses
(210,646
)
—
(113,904
)
(4,308
)
(328,858
)
—
(328,858
)
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
2004 (As restated*)
Fixed
Fixed
Total Before
Total
Wireline
Wireless
Cellular
Other
Elimination
Elimination
Consolidated
Segment results
External operating revenues
18,860,835
575,436
14,201,786
309,709
33,947,766
—
33,947,766
Inter-segment operating revenues
4,302
(51,083
)
534,790
51,063
539,072
(539,072
)
—
Total revenues
18,865,137
524,353
14,736,576
360,772
34,486,838
(539,072
)
33,947,766
Segment expenses
(12,207,726
)
(789,599
)
(6,757,243
)
(320,698
)
(20,075,266
)
715,380
(19,359,886
)
Segment result
6,657,411
(265,246
)
7,979,333
40,074
14,411,572
176,308
14,587,880
Interest expense
(1,270,136
)
Interest income
317,941
Loss on foreign exchange — net
(1,220,760
)
Other income (expenses) — net
331,050
Tax expense
(4,178,526
)
Equity in net income of associated companies
3,420
Income before minority interest
8,570,869
Unallocated minority interest
(1,956,301
)
Net income
6,614,568
Other information
Segment assets
34,493,795
3,048,671
18,988,939
414,165
56,945,570
(2,396,426
)
54,549,144
Investments in associates
73,323
—
9,290
—
82,613
—
82,613
Unallocated corporate assets
1,547,435
Total consolidated assets
56,179,192
Segment liabilities
(2,821,945
)
(86,780
)
(1,712,623
)
(87,346
)
(4,708,694
)
987,442
(3,721,252
)
Unallocated corporate liabilities
(29,391,472
)
Total consolidated liabilities
(33,112,724
)
Capital expenditures
(4,340,591
)
(1,807,518
)
(4,982,744
)
(66,691
)
(11,197,544
)
—
(11,197,544
)
Depreciation and amortization
(3,568,196
)
(229,983
)
(2,651,028
)
(18,740
)
(6,467,947
)
14,590
(6,453,357
)
Amortization of goodwill and other intangible assets
(851,060
)
—
—
(21,270
)
(872,330
)
—
(872,330
)
Other non-cash expenses
(244,356
)
—
(100,737
)
(5,338
)
(350,431
)
—
(350,431
)
*
The 2004 figures have been restated due to the adoption of
    PSAK 24R (see Note 4a).
F-110
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
2005
Fixed
Fixed
Total Before
Total
Wireline
Wireless
Cellular
Other
Elimination
Elimination
Consolidated
Segment results
External operating revenues
19,637,386
1,449,725
20,384,856
335,217
41,807,184
—
41,807,184
Inter-segment operating revenues
305,382
(167,935
)
691,188
70,475
899,110
(899,110
)
—
Total revenue
19,942,768
1,281,790
21,076,044
405,692
42,706,294
(899,110
)
41,807,184
Segment expense
(14,378,819
)
(2,174,656
)
(8,774,996
)
(328,184
)
(25,656,655
)
1,020,221
(24,636,434
)
Segment result
5,563,949
(892,866
)
12,301,048
77,508
17,049,639
121,111
17,170,750
Interest expense
(1,177,268
)
Interest income
344,686
Loss on foreign exchange — net
(516,807
)
Other income (expenses) — net
409,184
Tax expense
(5,183,887
)
Equity in net income of associated companies
10,879
Income before minority interest
11,057,537
Unallocated minority interest
(3,063,971
)
Net income
7,993,566
Other information
Segment assets
33,980,509
3,617,374
25,444,587
455,644
63,498,114
(2,260,681
)
61,237,433
Investments in associates
92,110
—
9,290
—
101,400
—
101,400
Unallocated corporate assets
832,211
Total consolidated assets
62,171,044
Segment liabilities
(2,890,445
)
(459,284
)
(2,547,874
)
(111,620
)
(6,009,223
)
886,435
(5,122,788
)
Unallocated corporate liabilities
(27,450,662
)
Total consolidated liabilities
(32,573,450
)
Capital expenditures
(2,037,866
)
(1,388,876
)
(10,085,755
)
(40,460
)
(13,552,957
)
—
(13,552,957
)
Depreciation and amortization
(4,006,246
)
(537,284
)
(3,046,632
)
(23,322
)
(7,613,484
)
11,919
(7,601,565
)
Write-down of assets and loss on procurement commitments
—
(696,127
)
—
—
(696,127
)
—
(696,127
)
F-111
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
2005
Fixed
Fixed
Total Before
Total
Wireline
Wireless
Cellular
Other
Elimination
Elimination
Consolidated
Amortization of goodwill and other intangible assets
(896,883
)
—
—
(21,270
)
(918,153
)
—
(918,153
)
Other non-cash expenses
(292,357
)
(21,582
)
(171,192
)
(4,783
)
(489,914
)
—
(489,914
)
47. JOINT OPERATION SCHEMES ("KSO")
In 1995, the Company and five investors (PT Pramindo Ikat
Nusantara, PT AriaWest International, PT Mitra Global
Telekomunikasi Indonesia, PT Dayamitra Telekomunikasi and PT
Bukaka Singtel International) entered into agreements for Joint
Operation Schemes ("KSO") and KSO construction
agreements for the provision of telecommunication facilities and
services for the Sixth Five-Year Development Plan
("Repelita VI") of the Republic of Indonesia. The five
investors undertook the development and operation of the basic
fixed telecommunications facilities and services in five of the
Company's seven regional divisions.
Following the Indonesian economics crisis that began in
mid-1997, certain KSO investors experienced difficulties in
fulfilling their commitment under the KSO agreements. As
remedial measures instituted by both the Company and those
certain KSO investors did not fully remedy this situation, the
Company entered into agreements with some of the KSO investors
to acquire those KSO investors (Dayamitra in 2001, Pramindo in
2002 and AWI in 2003 — Note 5) and currently
controls the related KSOs through its ownership of such KSO
investors. In January 2004, the Company acquired full
operational control of the KSO IV operations (Note 5).
Accordingly, the revenue sharing percentage in those KSOs is no
longer relevant as the financial statements of the acquired KSO
investors and the related KSOs are consolidated into the
Company's financial statements since the date of
acquisition. Subsequent to January 2004, only Regional Division
VII is operated by a KSO investor, PT Bukaka Singtel
International ("BSI"), which is not controlled by the
Company.
Under the Joint Operation Scheme between the Company and BSI,
the KSO Unit VII is required to make payments to the Company
consisting of the following:
•
Minimum Telkom Revenue ("MTR")
Represents the amount guaranteed by the KSO investor to be paid
to the Company in accordance with the KSO agreement.
•
Distributable KSO Revenues ("DKSOR")
DKSOR are the entire KSO revenues, less the MTR and the
operational expenses of the KSO Units, as provided in the KSO
agreement. These revenues are shared between the Company and BSI
based on agreed upon percentages.
The DKSOR from fixed wireless revenues ("Telkom Flexi
Revenues") are shared between the Company and BSI based on
a ratio of 95% and 5%, respectively.
The DKSOR from non-Telkom Flexi Revenues are shared between the
Company and BSI based on a ratio of 35% and 65%, respectively.
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
At the end of the KSO period, all rights, title and interests of
BSI 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 the tests have not 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:
i. the net present value, if any, of the KSO
    investor's projected share in DKSOR from the additional new
    installations forming part of the KSO system on the termination
    date over the balance of the applicable payback periods, and
ii. an amount to be agreed upon between the Company and the
    KSO investor as a fair compensation in respect of any
    uncompleted or untested additional new installations transferred.
48. REVENUE-SHARING ARRANGEMENTS
The Company has entered into separate agreements with several
investors under Revenue-Sharing Arrangements ("RSA")
to develop fixed lines, public card-phone booths (including
their maintenance) and related supporting telecommunications
facilities.
As of December 31, 2005, the Company has 90 RSA with 63
partners. The RSA are located mainly in Palembang, Pekanbaru,
Jakarta, East Java and Kalimantan with concession periods
ranging from 16 to 176 months.
Under the RSA, the investors finance the costs incurred in
developing telecommunications facilities. Upon completion of the
construction, the Company manages and operates the facilities
and bears the cost of repairs and maintenance during the
revenue-sharing period. 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 at a nominal price.
Generally, the revenues earned from the customers in the form of
line installation charges are allocated in full to the
investors. The revenues from outgoing telephone pulses and
monthly subscription charges are shared between the investors
and the Company based on certain agreed ratio.
The net book value of property, plant and equipment under RSA
which have been transferred to property, plant and equipment
amounted to Rp53,589 million and Rp55,441 million in
2004 and 2005, respectively (Note 13).
The investors' share of revenues amounted to
Rp442,633 million, Rp891,165 million and
Rp513,528 million in 2003, 2004 and 2005, respectively.
49. TELECOMMUNICATIONS SERVICES TARIFFS
Under Law No. 36 year 1999 and Government
Regulation No. 52 year 2000, tariffs for the use
of telecommunications network and telecommunication services are
determined by providers based on the tariffs category, structure
and with respect to fixed line telecommunication services price
cap formula set by the Government.
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P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
Fixed Line Telephone Tariffs
Fixed line telephone tariffs 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 classified as either local or domestic long-distance.
The tariffs depend on call distance, call duration, the time of
day, the day of the week and holidays.
Tariffs for fixed line telephone are regulated under Minister of
Communications Decree No. KM.12 year 2002 dated
January 29, 2002 concerning the addendum of the decree of
Minister of Tourism, Post and Telecommunication
("MTPT") No. 79 year 1995, concerning the
Method for Basic Tariff Adjustment on Domestic Fixed Line
Telecommunication Services. Furthermore, the Minister of
Communications issued Letter No. PK 304/1/3 PHB-2002 dated
January 29, 2002 concerning increase in tariffs for fixed
line telecommunications services. According to the letter,
tariffs for fixed line domestic calls would increase by 45.49%
over three years. The average increase in 2002 was 15%. This
increase was effective on February 1, 2002. The
implementation of the planned increase in the tariff in 2003,
however, was postponed by the Minister of Communications through
letter No. PR.304/1/1/ PHB-2003 dated January 16, 2003.
Based on the Announcement No. PM.2 year 2004 of the
Minister of Communications dated March 30, 2004, the
Company adjusted the tariffs effective April 1, 2004 as
follows:
•
Local charges increased by an average of 28%
•
DLD charges decreased by an average of 10%
•
Monthly subscription charges increased by an average of 12% to
    25%, depending on customer segment.
Mobile Cellular Telephone Tariffs
Tariffs for cellular providers are set on the basis of the MTPT
Decree No. KM. 27/ PR.301/ MPPT-98 dated February 23, 1998.
Under the regulation, the cellular tariffs consist of activation
fees, monthly charges and usage charges.
The maximum tariff for the activation fee is Rp200,000 per
new subscriber number. The maximum tariff for the monthly
charges is Rp65,000. Usage charges consist of the following:
a.
Air time
The maximum basic airtime tariff charged to the originating
cellular subscriber is Rp325/minute. Charges to the originating
cellular subscriber are calculated as follows:
1. Cellular to cellular
:
2 times airtime rate
2. Cellular to PSTN
:
1 time airtime rate
3. PSTN to cellular
:
1 time airtime rate
4. Card phone to cellular
:
1 time airtime rate plus 41% surcharge
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
b.
Usage tariffs
1. Usage tariffs charged to a cellular subscriber who makes
a call to a fixed line ("PSTN") subscriber are the
same as the usage tariffs applied to PSTN subscribers. For the
use of local PSTN network, the tariffs are computed at 50% of
the prevailing local PSTN tariffs.
2. The long-distance usage tariffs between two different
service areas charged to a cellular subscriber are the same as
the prevailing tariffs for domestic long-distance call
("SLJJ") applied to PSTN subscribers.
Based on the Decree No. KM. 79 year 1998 of the
Ministry of Communications, the maximum tariff for prepaid
customers may not exceed 140% of the peak time tariffs for
post-paid subscribers.
Based on the Announcement No. PM.2 year 2004 of the
Minister of Communications dated March 30, 2004, Telkomsel
adjusted its tariffs by eliminating the tariff subsidy from
long-distance calls. This resulted in a 9% tariff increase.
Interconnection Tariffs
The Government establishes the percentage of tariffs to be
received by each operator in respect of calls that transit
multiple networks. The Telecommunications Law and Government
Regulation No. 52 of 2000 provides for the
implementation of a new policy to replace the current revenue
sharing policy. Under the new policy, which has not yet been
implemented, the operator of the network on which calls
terminate would determine the interconnection charge to be
received by it based on a formula to be mandated by the
Government, which would be intended to have the effect of
requiring that operators charge for calls based on the costs of
carrying such calls. On March 11, 2004, the MoC issued
Decree No. 32/2004, which stated that cost-based
interconnection fees shall be applicable beginning
January 1, 2005. The effective date of this decree was
subsequently postponed until January 1, 2007 based on the
Ministry Regulation No. 08/ Per/ M. KOMINF/02/2006 dated
February 8, 2006.
i.
Interconnection with Fixed line Network
The Government's National Fundamental Technical Plan set
forth in Decree 4 of 2001, as amended by Decree 28 of 2004, sets
out the technical requirements, routing plans and numbering
plans for interconnection of the networks of various
telecommunications operators among themselves and with the
Company's fixed line network. Under the National
Fundamental Technical Plan, all operators are permitted to
interconnect with the Company's fixed line network for
access thereto and to other networks, such as international
gateways and the networks of other cellular operators. In
addition, cellular operators may interconnect directly with
other networks without connecting to the Company's fixed
line network. Currently, the fees for interconnection are set
forth in Decree No. 506/1997, Decree No. 46/1998,
Decree No. 37/1999 and Decree No. 30/2000.
Fixed line Interconnection with Indosat.
Currently, the
fixed line interconnection between the Company and Indosat is
generally based on their agreement signed in 2005. Pursuant to
the agreement between the Company and Indosat, for
interconnection of local and domestic long-distance calls, the
operator of the network on which the calls terminate receives an
agreed amount per minute.
Other Fixed Wireline Interconnection.
Since
September 1, 1998, the Company has been receiving a share
of the tariffs from Batam Bintan Telekomunikasi
("BBT"), which is a local operator with a special
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
coverage area on Batam Island, for each successful call that
transits or terminates on the Company's fixed line network.
Under the interconnection agreement, for local interconnection
calls, revenues are shared on a "sender keeps all"
basis. For local calls originating on BBT's network
terminating on a cellular network and vice versa which transit
through the Company's fixed line network, the Company
receives an agreed percentage of the prevailing tariff for local
calls. For interconnection of domestic long-distance calls, the
operator of the network on which the calls terminate or transit
receives an agreed percentage of the prevailing long-distance
tariff. In addition, BBT is to receive a certain fixed amount
for each minute of incoming and outgoing international calls
from and to BBT that transit through the Company's fixed
line network and use the Company's IDD service and 50% of
the prevailing interconnection tariff for incoming and outgoing
international calls that transit through the Company's
fixed line network and use Indosat's IDD service.
Other Fixed Wireless Interconnection.
Fixed wireless
networks may interconnect with the Company's fixed line
network at the Company's gateway. At present, other than
the Company and Indosat, PT Bakrie Telecom ("BT") also
operates a fixed wireless network in Indonesia. The fixed
wireless interconnection between the Company and BT is currently
based on the most recent interconnection agreement signed in
2005. Pursuant to the agreement, for interconnection of local
calls, the operator of the network on which the calls terminate
receives an agreed amount per minute. For local calls
originating on BT's network terminating on a cellular
network and vice versa which transit through the Company's
fixed line network, the Company receives an agreed percentage of
the prevailing tariff for local calls. For domestic
long-distance calls that originate on the Company's fixed
line network and terminate on BT's network, BT receives an
agreed amount per minute. In the reverse situation and for
transit long-distance calls through the Company's fixed
line network, the Company receives an agreed percentage of the
prevailing long-distance tariff. In addition, BT is to receive a
certain fixed amount for each minute of incoming and outgoing
international calls to and from BT that transit through the
Company's fixed line network and use the Company's IDD
service and 25% of prevailing interconnection tariff of incoming
and outgoing international calls that transit through the
Company's fixed line network and use Indosat's IDD
service.
ii.
Cellular Interconnection
In respect of local interconnection calls, including transit
calls, between a cellular network and the Company's fixed
line network, the Company receives 50% of the prevailing
fixed-line usage tariff for local pulse. For local calls from
the Company's fixed line network to a cellular network, the
Company charges its subscribers the applicable local call tariff
plus an airtime charge, and pays the cellular operator the
airtime charge. For local calls between cellular
telecommunications networks, the originating cellular operator
pays the terminating cellular operator the air time charges.
The current Interconnection Decree, effective April 1,
1998, assumes that it is possible for long-distance calls to be
carried by more than one network. Pursuant to the
Interconnection Decree, for long-distance calls which originate
on the Company's fixed line network, the Company is
entitled to retain a portion of the prevailing long-distance
tariff, which ranges from 40% of the tariff in cases where the
entire long-distance portion is carried by a cellular operator
up to 85% of the tariff in cases where the entire long-distance
portion is carried by the Company's fixed line network. For
long-distance calls that originate from a cellular subscriber,
the Company is entitled to retain a portion of the prevailing
long-distance tariff, which ranges from 25% of the tariff in
cases where the call originates from a cellular subscriber,
transits the Company's fixed line network and terminates on
another cellular subscriber
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
with the entire long-distance portion carried by a cellular
operator, up to 85% of the tariff in cases where the entire
long-distance portion is carried by the Company's fixed
line network and terminates on the Company's fixed line
network.
iii.
International Interconnection
Interconnection on the Company's domestic fixed line
network for international calls consists of access charges and
usage charges. The following table sets forth the current
international interconnection tariff, effective as of
December 1, 1998, for IDD calls which are routed through
Indosat's international gateways and which originate,
transit or terminate on the Company's domestic fixed line
network and Telkomsel's cellular network, pursuant to
Ministerial Decree No. 37 of 1999:
Description
Tariff
Access Charge
Rp850/successful call
Usage Charge
Rp550/successful paid minute
In addition, since June 2004, the Company has provided IDD
services. Currently, the Company's IDD service can be
accessed by subscribers of all telecommunication operators in
Indonesia. Interconnection and access charges for originating
calls using the Company's IDD service or terminating
incoming international calls routed through the Company's
international voice telecommunications gateway are negotiated
with each respective domestic operator.
iv.
Satellite Phone Interconnection
Since the fourth quarter of 2001, the Company has been receiving
a share of revenues arising from interconnection transactions
with PSN, a national satellite operator. Under the agreement, in
respect of the interconnection calls between the Company and
PSN, the Company receives Rp800 per minute for network
charges and an additional Rp300 per minute origination fee
if the call originates from the Company's fixed line
network.
v.
VoIP Interconnection
Previously, MoC Decree No. 23 of 2002 provided that access
charges and network lease charges for the provision of VoIP
services were to be agreed between network operators and VoIP
operators. On March 11, 2004, the MoC issued Decree
No. 31/2004, which stated that interconnection charges for
VoIP are to be fixed by the MoC. Currently, the MoC has not yet
determined what the new VoIP interconnection charges will be.
Until such time as the new charges are fixed, the Company will
continue to receive connection fees for calls that originate or
terminate on the Company's fixed line network at agreed
fixed amount per minute.
Public Phone Kiosk ("Wartel") Tariff
On August 7, 2002, the Minister of Communications issued
Decree No. KM. 46 year 2002 regarding the operation of
phone kiosks. The decree provides that the Company is entitled
to retain a maximum of 70% of the phone kiosk basic tariffs for
domestic calls and up to 92% of phone kiosk basic tariffs for
international calls. It also provides that the airtime from the
cellular operators shall generate at a minimum 10% of the kiosk
phones' revenue.
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
Tariff for Other Services
The tariffs for satellite rental, and other telephony and
multimedia services are determined by the service provider by
taking into account the expenditures and market price. The
Government only determines the tariff formula for basic
telephony services. There is no stipulation for the tariff of
other services.
Universal Service Obligation ("USO")
On September 30, 2005, the MoCI issued Regulation
No. 15/ PER/ M.KOMINFO/9/2005, which sets forth the basic
policies underlying the USO program and requires
telecommunications operators in Indonesia to contribute 0.75% of
gross revenues (with due consideration for bad debt and
interconnection charges) for USO development.
50.  COMMITMENTS
a.
Capital Expenditures
As of December 31, 2005, the amount of capital expenditures
committed under contractual arrangements, principally relating
to procurement and installation of switching equipment,
transmission equipment and cable network, are as follows:
Amounts in
Foreign Currencies
Equivalent
Currencies
(in millions)
in Rupiah
Rupiah
—
2,601,352
U.S. Dollar
265
2,602,313
Euro
119
1,386,487
Japanese Yen
52
4,355
Total
6,594,507
The above balance includes the following significant agreements:
(i)
Procurement Agreements
In August 2004, Telkomsel entered into the following agreements
    with Motorola Inc. and PT Motorola Indonesia, Ericsson AB
    and PT Ericsson Indonesia, Nokia Corporation and PT Nokia
    Network, and Siemens AG, for the maintenance and procurement of
    equipment and related services:
•
Joint Planning and Process Agreement
•
Equipment Supply Agreement ("ESA")
•
Technical Service Agreement ("TSA")
•
Site Acquisition and Civil, Mechanical and Engineering Agreement
    ("SITAC" and "CME")
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
The agreements contain lists of charges ("Price List")
    to be used in determining the fees payable by Telkomsel for all
    equipment and related services to be procured during the
    roll-out period upon the issuance of Purchase Order
    ("PO").
The agreements are valid and effective as of the execution date
    ("Effective Date") by the respective parties for a
    period of three years, provided that the suppliers are able to
    meet requirements set out in each PO. In the event that the
    suppliers fail to meet those requirements, Telkomsel may
    terminate the agreements at its sole discretion with a prior
    written notice.
In accordance with the agreements, the parties also agreed that
    the charges specified in the Price List will also apply to
    equipment and technical services (ESA and TSA) and services
    (SITAC and CME) acquired from the suppliers between May 26,
    2004 and the Effective Date ("Pre-Effective Date
    Pricing"), except for those acquired from Siemens under TSA
    which are applicable for certain equipment and the related
    maintenance services acquired or rendered between July 1,
    2004 and the Effective Date. Prices as well as discounts thereon
    are subject to a quarterly review.
(ii)
CDMA Procurement Agreement with Samsung
    Consortium
On October 9, 2002, the Company signed an Initial Purchase
    Order Contract for CDMA 2000-IX with Samsung Consortium for Base
    Station Subsystem ("BSS") procurement in Regional
    Divisions V, VI and VII and on December 23, 2002, the
    Company signed a Master Procurement Partnership Agreement
    ("MPPA"), which is related to the construction of
    Network and Switching Subsystem ("NSS") for nationwide
    and BSS for Regional Divisions IV, V, VI, and VII. As of
    December 31, 2005, the Company's remaining purchase
    commitment in connection with this MPPA amounted to
    US$5.6 million and Rp1,826 million.
Samsung Consortium will service and maintain the CDMA 2000 IX
    system that it constructs, pursuant to a Service
    Level Agreement dated the same date as the MPPA in return
    for an annual consideration of US$11.6 million.
(iii)
CDMA Procurement Agreement with Ericsson CDMA
    Consortium
The Company and Ericsson CDMA Consortium entered into a Master
    Procurement Partnership Agreement ("MPPA") on
    December 23, 2002. The MPPA is related to the construction
    of BSS for Regional Division II. As of December 31,
    2005, the Company's remaining purchase commitment in
    connection with this MPPA amounted to US$6.8 million and
    Rp12,753 million.
Ericsson Consortium will service and maintain the CDMA 2000 IX
    system that it constructs, pursuant to a Service
    Level Agreement dated the same date as the MPPA in return
    for an annual consideration of US$5.3 million.
(iv)
MPPA with PT INTI
The Company and PT INTI signed an MPPA on August 26, 2003
    whereby PT INTI is appointed to construct a CDMA fixed wireless
    access network and integrate such network with the
    Company's existing network and all ancillary services
    relating thereto in West Java and Banten. As of
    December 31, 2005, the Company's remaining purchase
    commitment in connection with this MPPA amounted to US$355,275
    and Rp233 million.
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
PT INTI will service and maintain the CDMA 2000 IX system that
    it constructs, pursuant to a Service Level Agreement dated
    the same date as the MPPA in return for an annual consideration
    of US$2.3 million.
(v)
MPPA with Motorola
On March 24, 2003, the Company signed an MPPA with
    Motorola, Inc. Under the MPPA, Motorola is obliged to construct
    a CDMA fixed wireless access network and integrate such network
    with the Company's existing network and all ancillary
    services relating thereto in Regional Division I. As of
    December 31, 2005, the Company's remaining purchase
    commitment in connection with this MPPA amounted to US$422,424
    and Rp1,307 million.
Motorola, Inc. will service and maintain the CDMA 2000 IX system
    that it constructs, pursuant to a Service Level Agreement
    dated the same date as the MPPA in return for an annual
    consideration of US$3 million.
(vi)
Metro Junction and Optical Network Access Agreement for
    Regional Division III with PT INTI
On November 12, 2003, the Company entered into an agreement
    with PT INTI for the construction and procurement of an optical
    network, as well as a network management system and other
    related services and equipment, with respect to Regional
    Division III (West Java). Under this agreement and its
    amendment, the Company is obliged to pay PT INTI total
    consideration of approximately US$6.6 million and
    Rp111,655 million. As of December 31, 2005, the
    Company has paid and/or accrued a total of US$2.9 million
    plus Rp59,018 million.
(vii)
Ring JASUKA Backbone with NEC-Siemens Consortium
On June 10, 2005, the Company entered into an agreement
    with NEC-Siemens Consortium for the procurement and installation
    of an optical cable transmission of RING I (link
    Jakarta — Tanjung Pandan —
    Pontianak — Batam — Dumai —
    Pekanbaru — Palembang — Jakarta) and
    RING II (link Medan — Padang —
    Pekanbaru — Medan). Under this agreement, the Company
    is obliged to pay NEC-Siemens Consortium total consideration of
    approximately US$46.9 million and Rp169,642 million.
    This agreement is based on a turnkey arrangement. As of
    December 31, 2005, no payment has been made by the Company.
b.
Agreements on Derivative Transactions
Telkomsel is exposed to market risks, primarily changes in
foreign exchange rates, and uses derivative instruments in
hedging such risk. None of the derivative transactions entered
into by Telkomsel during 2003, 2004 and 2005 met the PSAK 55
criteria for hedge accounting. Therefore, changes in the fair
value of the derivative financial instruments were recognized in
the consolidated statements of income.
Telkomsel purchases equipment from several overseas suppliers
and, as a result, is exposed to fluctuations in foreign currency
exchange rates. In 2004 and 2005, Telkomsel entered into forward
foreign exchange contracts with Deutsche Bank, Standard
Chartered Bank, The Hongkong and Shanghai Banking Corporation
and Citibank Jakarta to mitigate the foreign exchange risks
relating to its purchases. The primary purpose of
Telkomsel's foreign currency hedging activities is to
protect
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
against the volatility associated with foreign currency
purchases of equipment and other assets in the normal course of
business.
The following table presents the aggregate notional amounts of
Telkomsel's foreign exchange forwards entered into in 2004
and 2005:
2004
2005
(in millions)
(in millions)
Citibank — U.S. Dollar
25
30
The Hongkong and Shanghai Banking Corporation — Euro
—
30
Deutsche Bank — U.S. Dollar
15
—
Standard Chartered Bank — Euro
15
—
As of December 31, 2004, all of the forward contracts with
Standard Chartered Bank and Citibank had been closed and the
outstanding contract with Deutsche Bank amounted to
US$5 million.
A receivable to reflect the gain on the difference between the
contract rate and the rate prevailing as of December 31,
2004 amounting to Rp1,020 million was included in
"Other Receivables" in the consolidated balance sheet.
As of December 31, 2005, all of the forward contracts had
been closed.
c.
Borrowings and other credit facilities
(i) Telkomsel has a combined US$20 million facility
with Standard Chartered Bank, Jakarta for import L/ C, bank
guarantee, standby L/ C and foreign exchange. The facility
expires in December 2006. Borrowings under the facility bear
interest at SIBOR plus 2% per annum for drawing in
US Dollar, at a rate equal to the three-month Certificate
of Bank Indonesia plus 2% per annum for drawing in Rupiah,
and at the Bank's cost of fund plus 2% for drawing in other
currencies. Under the facility, Telkomsel has an outstanding
bank guarantee of Rp150 billion (US$15.3 million) as
of December 31, 2005. There were no outstanding borrowings
related to the facility as of December 31, 2004 and 2005.
(ii) Telkomsel has a US$40 million facility with
Citibank N.A., Jakarta for L/ C and Trust Receipt Loan,
which expires on July 31, 2006. Borrowings under this
facility bear interest at the Bank's cost of fund plus
2% per annum. There were no outstanding borrowings under
this facility as of December 31, 2004 and 2005.
(iii) Telkomsel has not collateralized any of its assets
for its bank borrowings or other credit facilities. The terms of
the various agreements between Telkomsel and its lenders and
financiers require compliance with a number of pledges and
negative pledges as well as financial and other covenants, inter
alia, certain restriction on the amount of dividends and other
profit distributions which could adversely affect
Telkomsel's capacity to comply with the terms of the
agreements. The terms of the relevant agreement also contain
default and cross default clauses. Management is not aware of
any breaches of the terms of these agreements and does not
foresee any such breaches occurring in the future.
(iv) In October 2005, Graha Sarana Duta entered into a
credit agreement with the Bank Niaga, Bandung to obtain a
Rp12 billion short-term facility, which expires on 18
October 2006. Borrowings
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
under this facility bear interest at 14.5% per annum. There
were no outstanding borrowings related to this facility as of
December 31, 2005.
d.
Operating Leases
The Company leases land, buildings, and various equipment under
non-cancelable operating leases having initial terms of more
than one year. At December 31, 2005, the future minimum
payments for the non-cancelable operating leases were as follows:
Year
Rp
2006
474,790
2007
493,585
2008
452,820
2009
274,307
2010
269,013
Thereafter
851,425
Total
2,815,940
Rental expense for operating leases was Rp462,995 million,
Rp759,288 million and Rp868,987 million for the years
ended December 31, 2003, 2004 and 2005, respectively.
51. CONTINGENCIES
a. In the ordinary course of business, the Company has been
named as a defendant in various legal actions. Based on
Management's estimate of the outcome of these matters, the
Company accrued Rp99 million and Rp33,116 million as
of December 31, 2004 and 2005, respectively.
b. On August 13, 2004, the Commissions for Business
Competition Watch (Komisi Pengawas Persaingan Usaha,
"KPPU") issued its verdict in Commission Court, which
determined that the Company had breached several articles of Law
No. 5/1999 on Anti Monopolistic Practices and Unfair
Business Competition ("Competition Law"). In addition,
KPPU also indicated that the Company should allow Warung Telkom
("kiosks") to channel international calls to other
international call operators, and abolish the clause in
agreements between the Company and Warung Telkom providers which
limit Warung Telkom to sell telecommunication services of other
operators. The Company filed an appeal to the Bandung District
Court which on December 7, 2004, issued its verdicts in
favor of the Company. On January 4, 2005, KPPU filed an
appeal to the Indonesian Supreme Court. As of the date of
issuance of these consolidated financial statements, the
Indonesian Supreme Court has not issued its verdicts. The
Company does not believe that these proceedings presently
pending will have a material adverse effect on the
Company's consolidated financial position, results of
operations or liquidity.
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P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
c. There are on-going investigations by the West Java
Police Department as to the conduct of the Company's
Director of Human Resources Development, the Company's
Director of Consumer, and several other employees of the Company
(including one former director of the Company and one former
President Director of Napsindo — the Company's
subsidiary). As the details of the investigations have not been
made public, the Company does not know the full nature or extent
of the investigations or the matters to which they relate, or
whether any charges are likely to be filed. Based on press
reports, the Company understands that the investigations relate
principally to an alleged violation of anti-corruption law
regarding (i) the retention by the Company of a consultant
and an alleged overpayment without compliance with proper
procedures; and (ii) the alleged provision of
interconnection services to Napsindo, the Company's
subsidiary, and Globalcom, a Malaysian company, at an incorrect
tariff, and alleged use by Napsindo/Globalcom of the
Company's network for the provision of illegal VoIP
services. It is also understood that one of the investigations
relates to the Company's guarantee of a bank loan obtained
by Napsindo. To the Company's knowledge, no charges have
been filed against any of the persons investigated by the West
Java Police Department, although several of them (but not the
Company's Director of Consumer) were held in custody in
West Java pending completion of the investigations. On
May 10, 2006, those individuals were released from the
police custody because the police were unable to find any
incriminating evidence to support the charges during the
120-day
period they
were held in police custody. 120 days is the maximum period
allowed for police custody of suspects for investigation
purpose. However the investigation is ongoing. There can be no
assurance that the police will not find evidence of wrong-doing,
charges will not be filed in relation to the foregoing, or that
such persons or other employees of the Company will not be found
guilty of any offence. Although the Company believes that the
investigations are without merits, to the extent any of such
persons are in custody, or are found guilty of any offence, the
Company is and would be deprived of their services. In addition,
the Company does not believe that there are any financial
ramifications as a result of the investigations.
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
52. ASSETS AND LIABILITIES DENOMINATED IN FOREIGN
CURRENCIES
The balances of monetary assets and liabilities denominated in
foreign currencies are as follows:
2004
2005
Foreign
Foreign
Currencies
Rupiah
Currencies
Rupiah
(in millions)
Equivalent
(in millions)
Equivalent
Assets
Cash and cash equivalents
U.S. Dollar
74.80
694,116
81.96
805,489
Euro
88.10
1,114,704
59.14
689,472
Japanese Yen
0.98
89
—
—
Trade accounts receivable
Related parties
U.S. Dollar
3.92
36,375
1.64
16,112
Third parties
U.S. Dollar
16.19
150,223
19.46
191,199
Other accounts receivable
U.S. Dollar
1.12
10,355
0.30
2,910
Euro
—
—
0.01
88
Other current assets
U.S. Dollar
4.61
42,792
13.63
133,926
Euro
0.01
157
—
—
Advances and other non-current assets
U.S. Dollar
6.90
64,056
2.25
22,162
Escrow accounts
U.S. Dollar
3.24
30,059
12.89
126,128
Total Assets
2,142,926
1,987,486
Liabilities
Trade accounts payable
Related parties
U.S. Dollar
19.13
177,892
15.09
148,423
Myanmar KYAT
0.01
20
—
—
Singapore Dollar
—
1
—
—
Third parties
U.S. Dollar
49.57
460,969
125.40
1,233,050
Euro
—
—
68.30
796,343
Japanese Yen
7.88
715
66.03
5,508
Singapore Dollar
0.03
146
0.01
33
Great Britain Pound Sterling
0.06
1,092
—
14
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Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
2004
2005
Foreign
Foreign
Currencies
Rupiah
Currencies
Rupiah
(in millions)
Equivalent
(in millions)
Equivalent
Accrued expenses
Euro
26.54
336,572
8.79
102,509
U.S. Dollar
24.08
223,931
21.01
206,639
Japanese Yen
20.41
1,852
52.85
4,433
Singapore Dollar
0.37
2,135
0.42
2,497
Australian Dollar
0.07
507
—
—
Dutch Guilder
0.48
1,795
—
—
Short-term bank loans
Third parties
U.S. Dollar
118.46
1,101,633
—
—
Advances from customers and suppliers
U.S. Dollar
0.42
3,947
0.15
1,474
Current maturities of long-term liabilities
U.S. Dollar
116.29
1,081,478
150.43
1,479,401
Euro
14.64
185,643
14.67
171,087
Japanese Yen
1,142.91
103,688
1,142.91
95,876
Long-term liabilities
U.S. Dollar
830.22
7,721,068
662.39
6,514,501
Japanese Yen
15,527.59
1,408,708
14,384.68
1,206,700
Euro
36.60
464,108
22.01
256,631
Total liabilities
13,277,900
(12,225,119
)
Net liabilities
(11,134,974
)
(10,237,633
)
53. SUBSEQUENT EVENT
Sale
of investment in PT Mandara Selular Indonesia
("Mobisel")
On January 11, 2006, the Company signed a Shares Sale and
Purchase Agreement with Twinwood Ventures Limited whereby the
Company agreed to sell its entire ownership interest in Mobisel
to Twinwood Ventures Limited for Rp22,561 million. The
closing date of the transaction was on January 13, 2006
when approval from Indonesian Investment Coordinating Board
("BKPM") was obtained. The resulting gain on this sale
was not significant.
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
54.
SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN ACCOUNTING
    PRINCIPLES GENERALLY ACCEPTED IN INDONESIA AND ACCOUNTING
    PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA
The consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in
Indonesia ("Indonesian GAAP"), which differ in certain
significant respects from accounting principles generally
accepted in the United States of America
("U.S. GAAP"). A description of the differences
and their effects on net income and stockholders' equity
are set forth below.
As discussed in Note 4, the Company's consolidated
financial statements prepared in accordance with Indonesian GAAP
as of and for the year ended December 31, 2004 have been
restated in connection with the adoption of PSAK 24R. While
the restatement affected previously reported consolidated net
income and stockholders' equity under Indonesian GAAP,
there was no net effect on consolidated net income and
stockholders' equity under U.S. GAAP as previously
reported. However, certain reconciling line items in arriving at
net income and stockholders' equity under U.S. GAAP
have been revised.
(1)
Description of differences between Indonesian GAAP and
    U.S. GAAP
a.
Termination Benefits
Under Indonesian GAAP, termination benefits are recognized as
    liabilities when certain criteria are met (e.g. the enterprise
    is demonstratively committed to provide termination benefits as
    a result of an offer made in order to encourage early
    retirement).
Under U.S. GAAP, termination benefits are recognized as
    liabilities when the employees accept the offer and the amount
    can be reasonably estimated.
b.
Foreign Exchange Differences Capitalized to
    Property Under Construction
Under Indonesian GAAP, foreign exchange gains and losses
    resulting from borrowings used to finance property under
    construction are capitalized. Capitalization of foreign exchange
    gains and losses ceases when the construction of the qualifying
    asset is substantially completed and the constructed property is
    ready for its intended use.
Under U.S. GAAP, foreign exchange gains and losses are
    charged to current operations.
c.
Interest Capitalized on Property under
    Construction
Under Indonesian GAAP, qualifying assets, to which interest cost
    can be capitalized, should be those that take a substantial
    period of time to get ready for its intended use or sale, i.e.
    minimum 12 months. To the extent that funds are borrowed
    specifically for the purpose of obtaining a qualifying asset,
    the amount of interest cost eligible for capitalization on that
    asset should be determined based on the actual interest cost
    incurred on that borrowing during the period of construction
    less any investment income on the temporary investment of those
    borrowings.
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
Under U.S. GAAP, there is no minimum limit (i.e.
12-month
requirement)
    on the length of the construction period in which the interest
    cost could be capitalized. Interest income arising from any
    unused borrowings is recognized directly to current operations.
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 arrangements
    in the accounting records of the party to whom ownership in such
    properties will 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 net of amounts due to the investors.
Under U.S. GAAP, the revenue-sharing arrangements are
    recorded in a manner similar to capital leases where the fixed
    assets and obligation under revenue-sharing arrangements are
    reflected on the balance sheet. All the revenues generated from
    the revenue-sharing arrangements are recorded as a component of
    operating revenues, while a portion of the investors' share
    of revenue from the revenue-sharing arrangements is recorded as
    interest expense and the balance is treated as a reduction of
    the obligation under revenue-sharing arrangements.
e.
Employee benefit plans
As of January 1, 2005, the Company adopted PSAK 24R in
    accounting for pension benefit cost,
post-retirement
health
    care benefit cost and long service award benefit cost for
    Indonesian GAAP purposes. PSAK 24R requires the adoption of
    its provisions retrospectively as of January 1, 2004
    (Note 4a). Prior to 2004, there were no differences between
    Indonesian GAAP and U.S. GAAP with respect to the accounting for
post-retirement
health
    care benefit cost and long service award benefit cost while for
    pension benefit cost, there were some differences as follows:
i.
Under Indonesian GAAP, the prior service cost attributable to
    the increases in pension benefits for pensioners were directly
    charged to expense in those years. Under U.S. GAAP, because the
    majority of plan participants are still active, such prior
    service cost is deferred and amortized systematically over the
    estimated remaining service period for active employees.
ii.
Under Indonesian GAAP, the Company amortized the cumulative
    unrecognized actuarial gain or loss over four years. Under
    U.S. GAAP, any cumulative unrecognized actuarial gain or loss
    exceeding 10 percent of the greater of the projected
    benefit obligation or the fair value of plan assets is
    recognized in the statement of income on a straight-line basis
    over the expected average remaining service period.
iii.
Under Indonesian GAAP, recognition of a minimum liability is not
    required. Under U.S. GAAP, the Company would be required to
    recognize an additional minimum liability when the accumulated
    benefit obligation exceeds the fair value of the plan assets,
    and an equal amount would be recognized as an intangible asset,
    provided that the asset recognized does not exceed the amount of
    unrecognized prior service cost.
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
Starting in 2004, the differences between the Company's
    accounting for pension benefit cost, post-retirement health care
    benefit cost and long service award benefit cost under
    Indonesian GAAP and U.S. GAAP are as follows:
i.
Under Indonesian GAAP, the prior service cost is recognized
    immediately if vested or amortized over the vesting period.
    Under U.S. GAAP, prior service cost (vested and
non-vested
benefits) is
    generally deferred and amortized systematically over the
    estimated remaining service period for active employees.
ii.
Different dates of implementation caused significant differences
    in cumulative unrecognized actuarial gains and losses. However,
    the cumulative unrecognized actuarial gains and losses under
    Indonesian GAAP is now recognized in a manner similar to U.S.
    GAAP.
iii.
Under Indonesian GAAP, the transition obligation was recognized
    on January 1, 2004, the date PSAK 24R was adopted.
    Under U.S. GAAP, the transition obligation is deferred and
    amortized systematically over the estimated remaining service
    period for active employees.
iv.
The difference between Indonesian GAAP and U.S. GAAP in
    connection with the recognition of minimum liability remains
    unchanged.
f.
Equity in Net Income or Loss of Associated
    Companies
The Company records its equity in net income or loss of
    associated companies based on the associates' financial
    statements that have been prepared under Indonesian GAAP.
For U.S. GAAP reporting purposes, the Company recognizes
    the effect of the differences between U.S. GAAP and
    Indonesian GAAP at the investee level in the investment accounts
    and its share of the net income or loss and other comprehensive
    income or loss of those associates.
g.
Land Rights
In Indonesia, the title of land rests with the State under the
    Basic Agrarian Law No. 5 of 1960. Land use is accomplished
    through land rights whereby the holder of the right enjoys the
    full use of the land for a stated period of time, subject to
    extensions. The land rights generally are freely tradeable and
    may be pledged as security under borrowing agreements. Under
    Indonesian GAAP, land ownership is not depreciated unless it can
    be foreseen that the possibility for the holder to obtain an
    extension or renewal of the rights is remote.
Under U.S. GAAP, the cost of land rights is amortized over
    the economic useful life which represents the contractual period
    of the land rights.
h.
Revenue Recognition
Under Indonesian GAAP, revenues from cellular and fixed wireless
    services connection fees are recognized as income when the
    connection takes place (for postpaid service) or at the time of
    delivery of starter packs to distributors, dealers or customers
    (for prepaid service).
Installation fees for wire line services are recognized at the
    time of installation. The revenue from calling cards
    ("Kartu Telepon") is recognized when the Company sells
    the card.
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Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
Under U.S. GAAP, revenue from front-end fees and
    incremental costs up to, but not exceeding such fees, are
    deferred and recognized over the expected term of the customer
    relationship. Revenues from calling cards are recognized upon
    usage or expiration.
i.
Goodwill
Under Indonesian GAAP, goodwill is amortized over a period, not
    exceeding 20 years, that it is expected to benefit the
    Company.
Under U.S. GAAP, goodwill is not amortized but rather
    subjected to an annual test for impairment.
j.
Capital Leases
Under Indonesian GAAP, a leased asset is capitalized only if all
    of the following criteria are met: (a) the lessee has an
    option to purchase the leased asset at the end of the lease
    period at a price agreed upon at the inception of the lease
    agreement, and (b) the sum of periodic lease payments, plus
    the residual value, will cover the acquisition price of the
    leased asset and related interest, and (c) there is a
    minimum lease period of 2 years.
Under U.S. GAAP, a leased asset is capitalized if one of
    the following criteria is met: (a) there is an automatic
    transfer of ownership at the end of the lease term; or
    (b) the lease contains a bargain purchase option; or
    (c) the lease term is for 75% or more of the economic life
    of the asset; or (d) the net present value of minimum lease
    payments are at least 90% of the fair value of the asset.
k.
Acquisition of Dayamitra
On May 17, 2001 the Company acquired a 90.32% interest in
    Dayamitra and contemporaneously acquired a call option to buy
    the other 9.68% at a fixed price at a stated future date, and
    provided to the minority interest holder a put option to sell
    the other 9.68% to the Company under those same terms; meaning
    that the fixed price of the call is equal to the fixed price of
    the put option. Under U.S. GAAP, the Company should account
    for the option contracts on a combined basis with the minority
    interest and account for it as a financing of the purchase of
    the remaining 9.68% minority interest. As such, under
    U.S. GAAP, the Company has consolidated 100% of Dayamitra
    and attributed the stated yield earned under the combined
    derivative and minority interest position to interest expense
    since May 17, 2001.
On December 14, 2004, the Company exercised the option to
    acquire the 9.68% interest in Dayamitra.
Under Indonesian GAAP, prior to December 14, 2004, the
    Company accounted for the remaining 9.68% of Dayamitra as
    minority interest. In addition, the option price that has been
    paid by the Company was presented as "Advance payments for
    investments in shares of stock." The Company started
    consolidating the remaining 9.68% of Dayamitra on
    December 14, 2004 following the exercise of the option.
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
The difference in the timing of the 9.68% ownership interest
    recognition gives rise to differences in the timing and amounts
    of purchase consideration and liability recognized under
    Indonesian GAAP and U.S. GAAP.
l.
Reversal of Difference Due to Change of Equity in
    Associated Companies
Under Indonesian GAAP, differences previously credited directly
    to equity as a result of equity transactions in associated
    companies are released to the statement of income upon the sale
    of an interest in the associate in proportion with the
    percentage of the interest sold.
Under U.S. GAAP, it is the Company's policy to include
    differences resulting from equity transactions in associated
    companies in equity. Such amounts can not be released to the
    statement of income and consequently remain in equity
    indefinitely.
m.
Asset Retirement Obligations
Under Indonesian GAAP, legal obligations associated with the
    retirement of long-lived assets that result from the
    acquisition, construction, development and/or the normal
    operation of long-lived assets are charged to current operations
    as incurred.
Under U.S. GAAP, the estimated fair value of such
    obligations is accrued at the time of acquisition with an equal
    amount capitalized to the related long-lived assets and
    depreciated over the useful life of the assets. The Company and
    its subsidiaries identified their asset retirement obligations
    by reviewing contractual agreements to identify whether the
    Company and its subsidiaries are required to settle any
    obligations as a result of the prevailing laws, statute,
    ordinance, written or by legal construction of a contract under
    the doctrine of promissory estoppel.
n.
Deferred Income Taxes
Under Indonesian GAAP, the Company does not recognize deferred
    taxes on temporary differences between the financial statement
    carrying amounts and tax bases of equity method investments when
    it is not probable that these differences will reverse in the
    foreseeable future.
Under U.S. GAAP, deferred taxes are recognized in full on
    temporary differences between the financial statement carrying
    amounts and tax bases of equity method investments.
o.
Impairment of Assets
Under Indonesian GAAP, an impairment loss is recognized whenever
    the carrying amount of an asset or its cash-generating unit
    exceeds its recoverable amount. The recoverable amount of a
    fixed asset is the greater of its net selling price or value in
    use. In assessing value in use, the estimated future cash flows
    are discounted to their present value using a pre-tax discount
    rate that reflects current market assessments of the time value
    of money and the risks specific to the asset. An impairment loss
    can be reversed if there has been a change in the estimates used
    to determine the recoverable amount. An impairment loss is only
    reversed to the extent that the asset's carrying amount
    does not exceed the carrying amount that would have been
    determined, net of depreciation, if no impairment loss had been
    recognized.
Under U.S. GAAP, an impairment loss is recognized whenever
    the sum of the expected future cash flows (undiscounted and
    without interest charges) is less than the carrying amount of the
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
asset. An impaired asset is written down to its estimated fair
    value based on quoted market prices in active markets or
    discounting estimated future cash flows. When an impairment loss
    is recognized, the adjusted carrying amount of fixed asset
    becomes its new cost basis and reversals of previously
    recognized impairment losses are prohibited.
Through the year ended December 31, 2004, there were no
    impairment charges recognized by the Company. As discussed in
    Note 12, in 2005, the Company recognized impairment charges
    on BSS equipment which are part of transmission installation and
    equipment of fixed wireless assets. The sum of the expected
    future cash flows (undiscounted and without interest charges)
    relating to these impaired assets is less than the carrying
    amount of the assets and therefore, for U.S. GAAP reporting
    purposes, these assets have been written down to their estimated
    fair value based on discounted estimated future cash flows. The
    estimated fair values of the impaired assets determined under
    U.S. GAAP are the same as those determined under Indonesian
    GAAP; accordingly, there were no differences between Indonesian
    GAAP and U.S. GAAP.
p.
Gain (loss) on Disposal of Property, Plant and
    Equipment
Under Indonesian GAAP, the Company classifies gain (loss) on
    disposal of property, plant and equipment as a component of
    other income (expense) which is excluded from determination of
    operating income.
Under U.S. GAAP, gain (loss) on disposal of property, plant
    and equipment is classified as a component of operating expenses
    and hence included in the determination of operating income. For
    the years ended December 31, 2003, 2004 and 2005, operating
    income would have been higher (lower) by
    Rp182,883 million, (Rp26,089) million and
    Rp46,193 million, respectively, and other income
    (expenses) would have been lower (higher) by the same
    amounts due to the inclusion of the gain (loss) on disposal of
    property, plant and equipment in the determination of operating
    income.
q.
Reversal of Difference in Value of Restructuring
    Transactions Between Entities Under Common Control
Under Indonesian GAAP, the Company is required to reclassify the
    difference in value of restructuring transactions between
    entities under common control as of January 1, 2005 as a
    direct adjustment to retained earnings when the common control
    relationship between the transacting parties no longer exists as
    of January 1, 2005.
Under U.S. GAAP, difference in value of restructuring
    transactions between entities under common control remains in
    equity indefinitely as part of the additional paid-in capital.
(2)
A summary of the significant adjustments to
consolidated net income for the years ended December 31,
2003, 2004 and 2005 and to consolidated stockholders'
equity as of December 31, 2004 and
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PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
2005 which would be required if U.S. GAAP had been applied,
instead of Indonesian GAAP, in the consolidated financial
statements are set forth below:
Note
2003
2004
2005
(As restated*)
Net income according to the consolidated statements of income
    prepared under Indonesian GAAP
6,087,227
6,614,568
7,993,566
U.S. GAAP adjustments — increase (decrease) due
    to:
Termination benefits
(a
)
(670,981
)
—
—
Capitalization of foreign exchange gains and losses, net of
    related depreciation of (Rp76,756) million, (Rp75,870) million
    and (Rp77,010) million, respectively
(b
)
76,756
1,587
77,010
Interest capitalized on property under construction, net of
    related depreciation of (Rp8,787) million, (Rp13,392) million
    and (Rp17,275) million, respectively
(c
)
39,077
26,802
23,825
Revenue-sharing arrangements
(d
)
23,159
155,369
69,173
Pension
(e
)
(109,334
)
(148,517
)
(104,877
)
Post-retirement health care
(e
)
—
(75,964
)
(104,466
)
Long service awards
(e
)
—
(122,462
)
(90,933
)
Equity in net income (loss) of associated companies
(f
)
(170
)
(177
)
(192
)
Amortization of land rights
(g
)
(10,212
)
(13,907
)
(4,881
)
Revenue recognition
(h
)
(53,226
)
54,159
5,046
Goodwill
(i
)
21,270
21,270
21,270
Capital leases
(j
)
6,882
(3,435
)
(47,524
)
Adjustment for consolidation of Dayamitra
(k
)
(24,476
)
(72,361
)
5,084
Reversal of difference due to change of equity in associated
    companies
(l
)
(38,425
)
—
—
Asset retirement obligations
(m
)
(848
)
(848
)
(848
)
* The 2004 figures have been restated due to the adoption
of PSAK 24R (see Note 4a).
F-132
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
Note
2003
2004
2005
(As restated*)
Deferred income tax:
Deferred income tax on equity method investments
(n
)
119,456
(11,234
)
(3,206
)
Deferred income tax effect on U.S. GAAP adjustments
323,089
61,742
18,288
(297,983
)
(127,976
)
(137,231
)
Minority interest
1,396
(18,019
)
(16,244
)
Net adjustments
(296,587
)
(145,995
)
(153,475
)
Net income in accordance with U.S. GAAP
5,790,640
6,468,573
7,840,091
Net income per share — in full Rupiah amount
287.23
320.86
388.89
Net income per ADS — in full Rupiah amount
    (40 Series B shares per ADS)
11,489.40
12,834.47
15,555.74
*
The 2004 figures have been restated due to the adoption of
    PSAK 24R (see Note 4a).
F-133
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
Note
2004
2005
(As restated*)
Stockholders' equity according to the consolidated balance
    sheets prepared under Indonesian GAAP
18,128,036
23,292,401
U.S. GAAP adjustments — increase (decrease) due
    to:
Capitalization of foreign exchange differences — net
    of related depreciation
(b
)
(548,886
)
(471,876
)
Interest capitalized on property under construction —
    net of related depreciation
(c
)
128,614
152,439
Revenue-sharing arrangements
(d
)
(292,327
)
(223,154
)
Pension
(e
)
1,973,837
1,851,509
Post-retirement health care
(e
)
1,142,561
1,038,095
Long service awards
(e
)
(122,462
)
(213,395
)
Equity in net income (loss) of associated companies
(f
)
(18,429
)
(18,621
)
Amortization of land rights
(g
)
(79,118
)
(83,999
)
Revenue recognition
(h
)
(714,389
)
(709,343
)
Goodwill
(i
)
63,809
85,079
Capital leases
(j
)
17,688
(29,836
)
Adjustment for consolidation of Dayamitra
(k
)
(61,728
)
(56,644
)
Asset retirement obligations
(m
)
(1,696
)
(2,544
)
Deferred income tax:
Deferred income tax on equity method investments
(n
)
39,343
35,040
Deferred income tax effect on U.S. GAAP adjustments
(89,704
)
(66,182
)
1,437,113
1,286,568
Minority interest
5,763
(10,481
)
Net adjustments
1,442,876
1,276,087
Stockholders' equity in accordance with U.S. GAAP
19,570,912
24,568,488
*
The 2004 figures have been restated due to the adoption of
    PSAK 24R (see Note 4a).
F-134
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
The changes in stockholders' equity in accordance with
U.S. GAAP for the years ended December 31, 2003, 2004
and 2005 are as follows:
2003
2004
2005
Stockholders' equity at beginning of year
13,910,864
16,284,692
19,570,912
Changes during the year:
Net income under U.S. GAAP
5,790,640
6,468,573
7,840,091
Dividends
(3,338,109
)
(3,186,991
)
(2,921,227
)
Accumulated other comprehensive income, net of tax
(78,703
)
4,638
(11,288
)
Difference in value of restructuring transactions between
    entities under common control
—
—
90,000
Stockholders' equity at end of year
16,284,692
19,570,912
24,568,488
With regard to the consolidated balance sheets, the following
significant captions determined under U.S. GAAP would have
been:
2004
2005
Consolidated balance sheets
Current assets
9,610,433
10,952,600
Non-current assets
47,091,387
52,527,929
Total assets
56,701,820
63,480,529
Current liabilities
11,650,470
13,796,402
Non-current liabilities
20,547,769
18,799,964
Total liabilities
32,198,239
32,596,366
Minority interest in net assets of subsidiaries
4,932,669
6,315,675
Stockholders' equity
19,570,912
24,568,488
Total liabilities and stockholders' equity
56,701,820
63,480,529
F-135
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
(3)
Additional financial statement disclosures required by
    U.S. GAAP and U.S. SEC
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:
2003
2004
2005
Consolidated income before tax in accordance with U.S. GAAP
10,711,267
12,570,911
16,089,111
Income tax in accordance with U.S. GAAP at 30% statutory
    tax rate
3,213,380
3,771,273
4,826,733
Effect of non-deductible expenses (non-taxable income) at the
    enacted maximum tax rate (30%)
Net periodic post-retirement health care benefit cost
188,375
139,834
169,534
Amortization of discount on promissory notes and other borrowing
    costs
132,876
136,994
62,132
Tax penalty
16,521
1,941
24,155
Employee benefits
6,342
24,719
18,618
Permanent differences of the KSO Units
16,739
17,213
17,458
Income which was already subject to final tax
(61,876
)
(30,743
)
(68,336
)
Others
(93,812
)
66,787
118,511
Total
205,165
356,745
342,072
Provision for income tax in accordance with U.S. GAAP
3,418,545
4,128,018
5,168,805
F-136
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
For the three-year period ended December 31, 2005, all of
    the Company's operating revenues occurred in Indonesia, and
    accordingly, the Company has not been subject to income tax in
    other countries.
2004
2005
Deferred tax assets
Trade accounts receivable
228,889
248,260
Inventories
15,494
13,884
Tax loss carryforwards
239,501
123,309
Accrued long service awards
172,399
225,454
Deferral of revenue
220,538
218,366
Long-term investments
44,029
41,706
Liabilities of business acquisitions
1,009,932
945,403
Accrued employee benefits
46,043
63,002
Others
40,532
103,445
Total
2,017,357
1,982,829
Deferred tax liabilities
Property, plant and equipment
(3,215,173
)
(2,882,932
)
Intangible assets
(1,592,645
)
(1,327,225
)
Pension benefit cost
(153,177
)
(163,747
)
Prepaid expenses
(34,290
)
(31,877
)
Total
(4,995,285
)
(4,405,781
)
Total deferred tax liabilities — net
(2,977,928
)
(2,422,952
)
b.
Fair Value of Financial Instruments
The following methods and assumptions are used to estimate the
    fair value of each class of financial instruments:
Cash and cash equivalents and temporary investments
The carrying amount approximates fair value because of the
    short-term nature of the instruments.
Short-term bank loans
The carrying amount approximates fair value because of the
    short-term nature of the instruments.
F-137
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
Long-term liabilities
The fair value of long-term liabilities other than bonds and
    guaranteed notes is estimated by discounting the future cash
    flows of each instrument at rates currently offered to the
    Company for similar debt instruments of comparable maturities by
    the Company's bankers.
The fair value of bonds and guaranteed notes is based on market
    prices at balance sheet date.
The estimated fair values of the Company and its
    subsidiaries' financial instruments are as follows:
Carrying
Fair
Amount
Value
2004
Cash and cash equivalents
4,856,123
4,856,123
Temporary investments
19,949
19,949
Short-term bank loans
1,101,633
1,101,633
Long-term liabilities:
Two-step loans
6,018,705
6,983,321
Bonds
986,564
1,245,208
Medium-term notes
1,077,703
1,100,032
Guaranteed notes
736,174
863,184
Bank loans
2,378,315
2,462,916
Liabilities of business acquisitions
4,317,225
5,033,748
2005
Cash and cash equivalents
5,374,684
5,374,684
Temporary investments
22,064
22,064
Short-term bank loans
173,800
173,800
Long-term liabilities:
Two-step loans
5,329,477
5,001,102
Bonds
991,850
1,031,040
Medium-term notes
609,329
582,220
Bank loans
2,386,646
2,267,269
Liabilities of business acquisitions
3,990,353
4,162,814
The methods and assumptions followed to determine the fair value
    estimates are inherently judgmental and involve various
    limitations, including the following:
i. Fair values presented do not take into consideration the
    effect of future currency fluctuations.
ii. Estimated fair values are not necessarily indicative of
    the amounts that the Company and its subsidiaries would record
    upon disposal/termination of the financial instruments.
F-138
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
c.
Comprehensive Income
2003
2004
2005
Net income under U.S. GAAP
5,790,640
6,468,573
7,840,091
Unrealized holding gain (loss) on available-for-sale securities
—
884
(1,632
)
Foreign currency translation adjustments of associates
(78,703
)
3,754
2,560
Minimum pension liability adjustments
—
—
(12,216
)
5,711,937
6,473,211
7,828,803
Adjustments to net income to arrive at comprehensive income
    include unrealized holding gains (losses) on available-for-sale
    securities, foreign currency translation adjustments and minimum
    pension liability adjustments. The foreign currency translation
    adjustments of associates are reported net of income tax of
    Rp67,270 million, Rp1,609 million and
    Rp1,097 million for the years ended December 31, 2003,
    2004 and 2005, respectively. The minimum pension liability
    adjustment for 2005 is reported net of income tax of
    Rp5,235 million. The components of accumulated other
    comprehensive income are as follows:
2003
2004
2005
Unrealized holding gain (loss) on available-for-sale securities
—
884
(748
)
Foreign currency translation adjustments of associates
156,962
160,716
163,276
Minimum pension liability adjustments
—
—
(12,216
)
156,962
161,600
150,312
F-139
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
d.
Employee Benefit Plans
The Company
The disclosures under SFAS No. 132 (Revised 2003) and
    SFAS No. 106 are as follows:
Pension
Health Care
2003
2004
2005
2003
2004
2005
Components of Net Periodic Benefit Cost
Service cost
119,089
137,264
138,117
88,394
76,163
87,636
Interest cost
537,797
740,494
789,830
493,596
411,110
507,994
Expected return on plan assets
(421,706
)
(436,672
)
(533,333
)
(56,004
)
(61,084
)
(103,498
)
Amortization of prior service cost (gain)
201,265
201,265
201,265
(367
)
(367
)
(367
)
Recognized actuarial loss (gain)
(43,020
)
57,641
21,244
99,286
52,006
88,589
Amortization of transition obligation
28,634
28,634
28,634
24,325
24,325
24,325
Net periodic benefit cost
422,059
728,626
645,757
649,230
502,153
604,679
Amounts charged to KSO Units under contractual agreement
(29,896
)
(16,369
)
(18,660
)
(7,795
)
(9,913
)
(11,627
)
Total net periodic benefit cost less amounts charged to KSO Units
392,163
712,257
627,097
641,435
492,240
593,052
F-140
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
The following table presents the change in benefit obligation,
    the change in plan assets, funded status of the plan and the net
    amount recognized in the Company's U.S. GAAP balance
    sheets as of December 31, 2004 and 2005:
Pension
Health Care
2004
2005
2004
2005
Change in benefit obligation
Benefit obligation at beginning of year
6,852,923
7,315,182
3,787,389
4,681,005
Service cost
137,264
138,117
76,163
87,636
Interest cost
740,494
789,830
411,110
507,994
Plan participants' contributions
43,906
41,371
—
—
Actuarial (gain) loss
(155,128
)
(794,180
)
529,618
423,833
Benefits paid
(304,277
)
(350,220
)
(123,275
)
(125,979
)
Benefit obligation at end of year
7,315,182
7,140,100
4,681,005
5,574,489
Change in plan assets
Fair value of plan assets at beginning of year
3,671,309
4,884,523
505,340
1,138,768
Actual return on plan assets
627,842
155,754
32,173
45,209
Employer contributions
845,743
698,526
724,530
435,899
Plan participants' contributions
43,906
41,371
—
—
Benefits paid
(304,277
)
(350,220
)
(123,275
)
(125,979
)
Fair value of plan assets at end of year
4,884,523
5,429,954
1,138,768
1,493,897
Funded status
(2,430,659
)
(1,710,146
)
(3,542,237
)
(4,080,592
)
Unrecognized prior service cost (gain)
1,861,565
1,660,300
(1,566
)
(1,199
)
Unrecognized net actuarial loss
974,763
536,918
1,459,408
1,852,943
Unrecognized net transition obligation
120,257
91,623
243,249
218,924
Net amount recognized
525,926
578,695
(1,841,146
)
(2,009,924
)
The accumulated benefit obligation of the Company's defined
    benefit pension plan was Rp4,656,605 million and
    Rp4,829,227 million as of December 31, 2004 and 2005,
    respectively.
The measurement date used to determine pension and health care
    benefit measures for the pension plan and the health care plan
    is December 31 for each of the years.
The assumptions used by the independent actuary to determine the
    benefit obligation of the plans as of December 31, 2004 and
    2005 were as follows:
Pension
Health Care
2004
2005
2004
2005
Discount rate
11
%
11
%
11
%
11
%
Rate of compensation increase
8
%
8.8
%
—
—
F-141
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
The assumption used by the independent actuary to determine the
    net periodic benefit cost of the plans for the years ended
    December 31, 2003, 2004 and 2005 were as follows:
Pension
Health Care
2003
2004
2005
2003
2004
2005
Discount rate
13
%
11
%
11
%
13
%
11
%
11
%
Expected long-term return on plan assets
13
%
11
%
10.5
%
13
%
11
%
8
%
Rate of compensation increase
6
%
8
%
8
%
—
—
—
Assumed health care cost trend rates at December 31, 2003,
    2004 and 2005 are as follows:
2003
2004
2005
Health care cost trend assumed for next year
12%
12%
9%
Rate to which the cost trend is assumed to decline (the ultimate
    trend rate)
8%
8%
9%
Year that the rate reaches the ultimate trend rate
2006
2007
2006
The actuarial valuations for the defined benefit pension plan
    and post-retirement health care plan as of December 31,
    2003, 2004 and 2005 were prepared on May 21, 2004,
    March 15, 2005, and February 27, 2006, respectively,
    by an independent actuary.
Discount rate is based on the Government Bond yields, i.e.,
    11.38%. The rate of compensation increase assumed is based on
    long-term inflation in the order of 6% — 7%. The
    expected long-term return on plan assets is based on the average
    rate of earnings expected on the funds invested or to be
    invested.
Assumed health care cost trends have a significant effect on the
    amounts reported for the health care plan. A
    one-percentage-point change in assumed health care cost trend
    rates would have the following effects:
1-Percentage-
1-Percentage-
Point Increase
Point Decrease
Effect on total of service and interest cost components
159,073
(126,008
)
Effect on post-retirement benefit obligation
1,143,943
(908,400
)
The Company's pension plan weighted average asset
    allocations at December 31, 2004 and 2005, by asset
    category, are as follows:
Plan Assets
as of
December 31
Asset Category
2004
2005
Debt securities
71
%
75
%
Deposit securities
17
%
7
%
Equity securities
7
%
11
%
Real estate
1
%
1
%
Other
4
%
6
%
Total
100
%
100
%
F-142
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
Equity securities include the Company's common stock in the
    amounts of Rp96,063 million (2.0 percent of total plan
    assets) and Rp124,189 million (2.3 percent of total
    plan assets) at December 31, 2004 and 2005, respectively.
Debt securities include the Company's bonds in the amounts
    of Rp159,253 million (3.3 percent of total plan
    assets) and Rp223,736 million (4.1 percent of total
    plan assets) at December 31, 2004 and 2005, respectively.
The Company's post-retirement health care plan weighted
    average asset allocations at December 31, 2004 and 2005, by
    asset category, are as follows:
Plan Assets
as of
December 31
Asset Category
2004
2005
Debt securities
15
%
31
%
Deposit securities
84
%
60
%
Equity securities
—
4
%
Other
1
%
5
%
Total
100
%
100
%
Debt securities include the Company's medium-term notes in
the amount of Rp145,000 million (12.7 percent of total
plan assets) at December 31, 2004 and the Company's
medium-term notes and bonds in the total amount of
Rp232,394 million (15.6 percent of total plan assets)
at December 31, 2005.
Contributions
The Company expects to contribute Rp693,502 million to its
defined benefit pension plan and Rp568,755 million to its
post-retirement health care plan during 2006.
Expected Future Benefit Payments
The expected benefit payments are as follows:
Health
Pension
Care
2006
387,235
138,566
2007
351,742
152,035
2008
394,299
170,277
2009
472,327
191,692
2010
565,764
216,647
2011 — 2015
3,824,443
1,558,154
F-143
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
Telkomsel
Pension plan
2003
2004
2005
Service cost
4,679
6,300
12,901
Interest cost
3,337
5,199
8,412
Expected return on plan assets
(1,013
)
(824
)
(832
)
Amortization of prior service cost
—
125
24
Recognized actuarial loss
587
1,157
1,920
Amortization of transition obligation
458
458
458
Net periodic benefit cost
8,048
12,415
22,883
The following table presents the change in benefit obligation,
the change in plan assets, funded status of the plan and the net
amount recognized in Telkomsel's U.S. GAAP balance
sheets as of December 31, 2004 and 2005:
2004
2005
Change in benefit obligation
Benefit obligation at beginning of year
47,646
59,145
Service cost
6,300
12,901
Interest cost
5,199
8,412
Actuarial loss
—
96,151
Benefits paid
—
(2,929
)
Benefit obligation at end of year
59,145
173,680
Change in plan assets
Fair value of plan assets at beginning of year
8,504
11,182
Actual return on plan assets
2,678
(2,210
)
Employer contributions
—
14,928
Benefits paid
—
(2,929
)
Fair value of plan assets at end of year
11,182
20,971
Funded status
(47,963
)
(152,709
)
Unrecognized prior service cost
2,048
274
Unrecognized net actuarial loss
20,820
120,725
Unrecognized transition obligation
6,648
6,190
Net amount recognized
(18,447
)
(25,520
)
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Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
2004
2005
Accumulated benefit obligation
26,045
70,406
Fair value of plan assets
(11,182
)
(20,971
)
Unfunded accumulated benefits (required minimum liability)
14,863
49,435
Accrued pension cost
(18,447
)
(25,520
)
Additional liability under U.S. GAAP
—
23,915
Intangible asset
—
6,464
Other comprehensive income
—
17,451
The actuarial calculation for the pension plan is prepared by an
independent actuary. The measurement date used to determine
pension benefit measures for the pension plan is
December 31 of each of the years.
The assumptions used by the independent actuary to determine the
benefit obligation of the plan as of 31 December 31,
2004 and 2005 were as follows:
2004
2005
Discount rate
11
%
11
%
Rate of compensation increase
9
%
8
%
The assumptions used by the independent actuary to determine the
net periodic pension cost of the plan for the years ended
December 31, 2003, 2004 and 2005 were as follows:
2003
2004
2005
Discount rate
12
%
11
%
11
%
Expected long-term return on plan assets
12
%
7.5
%
7.5
%
Rate of compensation increase
10
%
9
%
9
%
e.
Recent U.S. Accounting Pronouncements
SFAS No. 123R,
"Share-Based Payment."
In December 2004, the FASB issued SFAS No. 123R which
    requires companies to measure compensation cost for share-based
    payments at fair value. It is not expected that the adoption of
    SFAS No. 123R will have a material effect on the
    Company's consolidated financial statements.
SFAS No. 151
"Inventory Cost — an
    amendment of ARB No. 43, Chapter 4
." In
    November 2004, the FASB issued SFAS No. 151 which
    requires certain abnormal expenditures to be recognized as
    expenses in current period. It also requires that the amount of
    fixed production overhead allocated to inventory be based on the
    normal capacity of the production facilities.
    SFAS No. 151 is effective for financial statements for
    fiscal years beginning after June 15, 2005. It is not
    expected that the adoption of SFAS No. 151 will have a
    material effect on the Company's consolidated financial
    statements.
SFAS No. 153
"Exchanges of Nonmonetary
    Assets — an amendment of APB Opinion
    No. 29
." In December 2004, the FASB issued
    SFAS No. 153, which is effective for nonmonetary asset
    exchanges occurring in fiscal periods beginning after
    June 15, 2005. SFAS No. 153 requires that
F-145
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
exchanges of productive assets be accounted for at fair value
    unless fair value can not be reasonably determined or the
    transaction lacks commercial substance. It is not expected that
    the adoption of this standard will have a material effect on the
    Company's consolidated financial statements.
SFAS No. 154
"Accounting Changes and Error
    Corrections — a replacement of APB Opinion No. 20
    and FASB Statement No. 3.
" In May 2005, the FASB
    issued SFAS No. 154 which replaces APB Opinion
    No. 20, "Accounting Changes," and
    SFAS No. 3, "Reporting Accounting Changes in
    Interim Financial Statements," and changes the requirements
    for the accounting for and reporting of a change in accounting
    principle. SFAS No. 154 applies to all voluntary
    changes in accounting principle. It also applies to changes
    required by an accounting pronouncement in the unusual instance
    that the pronouncement does not include specific transition
    provisions. When a pronouncement includes specific transition
    provisions, those provisions should be followed.
    SFAS No. 154 shall be effective for all accounting
    changes and any error corrections occurring after
    January 1, 2006.
FSP
    No. FAS
13-1
"Accounting for Rental Costs Incurred During a
    Construction Period.
" In October 2005, the FASB issued
    FSP
    No. FAS
13-1
which requires a reporting entity to recognize rental costs
    associated with ground or building operating leases that are
    incurred during a construction period as rental expense in
    income from continuing operations. FSP
    No. FAS
13-1
is applied in the first reporting period beginning after
    December 15, 2005. It is not expected that the adoption of
    FSP
    No. FAS
13-1
will have a material effect on the Company's consolidated
    financial statements.
SFAS No. 155,
"Accounting for Certain Hybrid
    Financial Instruments — an amendment of FASB
    Statements No. 133 and 140.
" In February 2006, the
    FASB issued SFAS No. 155 which amends
    SFAS No. 133 to narrow the scope exception for
    interest-only and principal-only strips on debt instruments to
    include only such strips representing rights to receive a
    specified portion of the contractual interest or principal cash
    flows. SFAS No. 155 also amends SFAS No. 140
    to allow qualifying special-purpose entities to hold a passive
    derivative financial instrument pertaining to beneficial
    interests that itself is a derivative financial instrument.
    SFAS No. 155 is effective for all financial
    instruments acquired, issued, or subject to a remeasurement (new
    basis) event occurring after the beginning of an entity's
    first fiscal year that begins after September 15, 2006. It
    is not expected that the adoption of SFAS No. 155 will
    have a material effect on the Company's consolidated
    financial statements.
55.
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY
    OPERATING ACTIVITIES
2003
2004
2005
(As restated*)
Net income
6,087,227
6,614,568
7,993,566
Adjustments to reconcile net income to net cash provided by
    operating activities:
Depreciation of property, plant and equipment
4,779,520
6,438,557
7,570,739
Write-down of assets
—
—
616,768
* The 2004 figures have been restated due to the adoption
of PSAK 24R (see Note 4a).
F-146
Table of Contents
PERUSAHAAN PERSEROAN (PERSERO)
P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2003, 2004 AND 2005
(Figures in tables are presented in millions of Rupiah,
unless otherwise stated)
2003
2004
2005
(As restated*)
Loss on procurement commitments
—
—
79,359
Interest income
(366,024
)
(317,941
)
(344,686
)
Interest expense
1,383,446
1,270,136
1,177,268
Foreign exchange (gain) loss
(363,505
)
1,192,842
420,419
Equity in net income of associated companies
(2,819
)
(3,420
)
(10,879
)
(Gain) loss on sale of property, plant and equipment
(182,883
)
26,089
(46,193
)
Insurance proceeds
—
—
(27,580
)
Loss on redemption of Telkomsel's bonds
—
44,628
19,038
Loss on sale of long-term investments
46,595
—
—
Amortization of goodwill and other intangible assets
730,659
872,330
918,153
Amortization of unearned income
(61,812
)
(93,164
)
(149,824
)
Amortization of deferred charges
26,555
25,751
26,921
Provision for doubtful accounts and inventory obsolescence
326,419
357,096
488,973
Income tax expense
3,861,090
4,178,526
5,183,887
Minority interest in net income of subsidiaries
1,503,478
1,956,301
3,063,971
Changes in assets and liabilities:
Trade accounts receivable
(827,772
)
(670,103
)
(706,726
)
Other accounts receivable
6,784
95,757
(124,746
)
Inventories
76,486
(58,329
)
(28,211
)
Prepaid expenses
(84,690
)
(179,573
)
(578,364
)
Prepaid taxes
(127,607
)
173,189
(1,217
)
Prepaid pension benefit costs
(260,041
)
208
722
Trade accounts payable
593,826
(47,618
)
284,599
Other accounts payable
(27,837
)
(96,022
)
1,602
Taxes payable
477,961
(105,991
)
156,089
Accrued expenses
(779,917
)
(65,078
)
419,465
Unearned income
317,650
266,774
562,719
Advances from customers and suppliers
(30,884
)
(78,028
)
(55,343
)
Accrued pension and other post-retirement benefit costs
7,041
(246,867
)
(149,254
)
Accrued long service awards
(3,504
)
(41,196
)
74,683
Accrued post-retirement health care benefits
460,757
(298,341
)
64,314
Interest paid
(1,178,332
)
(1,348,919
)
(1,200,484
)
Interest received
369,982
321,677
341,848
Income tax paid
(3,905,317
)
(4,132,359
)
(4,938,916
)
Net cash provided by operating activities
12,852,532
16,051,480
21,102,680
* The 2004 figures have been restated due to the adoption
of PSAK 24R (see Note 4a).
F-147