Emirates Telecommunications would buy a 16% of PT Excelcomindo Pratama for $438 million to enter Indonesia, the world's fourth most populous country, a Reuters report said.
The Reuters report said Etisalat will buy 1.13 billion shares in Indonesia's third-largest telecoms firm from Rajawali Group in a deal that could close as early as this month.
Excelcomindo is a 67% owned unit of Telecom Malaysia , whose third-quarter profit jumped 37.5% largely driven by growth in its home market and Indonesia, the report said.
Etisalat, the second-largest publicly traded Arab telecom firm with operations in 16 countries including Pakistan, said it wanted to gain exposure to the fast-growing telecoms market in Indonesia, home to 226 million people, the report added.
Excelcomindo expected to have up to 14 million mobile phone users in Indonesia by the end of the year, up from 10.5 million at the end of July, its president said in September.
The company has 13 million subscribers and market share of 14% at the end of September, Etisalat said.
The Reuters report further said Indonesia's telecoms sector has attracted several new entrants. Telekom Malaysia said in April it had bought 7.4% of Excelcomindo, raising its stake in the Jakarta-based operator to 67%.