Last week's US$602-million outlay for 22.3 per cent of Telkomsel, Indonesia's largest mobile carrier, followed the US$9 billion buy-up of Australia's second-largest telecoms player, Cable and Wireless Optus.

"As far as the goal of being a pan-Asian telecoms company, it is doing the right thing with its expansion strategy," SG Securities telecoms analyst Anis Rahman, said.

Lifting the Telkomsel holding from Dutch group KPN Mobile International was SingTel's first foray into Indonesia and just about completes the regional road map.

Malaysia is the notable omission, after SingTel last year failed in a bid for Time Engineering.

SingTel was also beaten by PCCW in its bid to buy Hongkong Telecom.

The Telkomsel acquisition, a record investment by any Singaporean company in neighbouring Indonesia, comes as SingTel aggressively builds a regional presence in the face of increased domestic competition.

It has also taken stakes in other key Asian carriers including Globe Telecom of the Philippines, India's Bharti Group, Thailand's Advanced Info Service and New Century Infocomm of Taiwan.

A home market of just four million people leaves SingTel with little choice but to seek new sources of revenue growth.

"The acquisitions make sense within the context of SingTel's regional and global market expansion aspirations as well as the need to move beyond the near-saturated and highly competitive domestic market," said Martin Kralik, a senior research analyst at Asian research house Strategic Intelligence.

SingTel president and chief executive Lee Hsien Yang said the investment in Telkomsel, which has 2.2 million subscribers or 47 per cent of the Indonesian market at the end of June, was a key plank of SingTel's plans.

"Indonesia, with its vast market, is central to our plans for the region," he said of Southeast Asia's most populous country.

The Indonesian market of 4.6 million mobile users still provided significant growth potential even though the country continues to be afflicted with a troubled economy and domestic political problems, Mr Lee said.

"Despite the weaker economic environment, the mobile market in Indonesia has displayed strong resilience, growing by 82 per cent per annum over the past 2.5 years," he said.

The national mobile penetration rate of 2.1 per cent "is poised to continue a steady climb as operators continue to grow their networks and more capacity is provided to support the market demand in Indonesia".

Some analysts felt the US$602 million price tag was too high.

"It should have negotiated the price down somewhat," Nomura Securities telecoms analyst Gillem Tulloch said.

"One would have thought given the events in the United States on September 11, investing in a predominantly Muslim country would have demanded a higher risk premium."

However, Mr Lee said: "We believe this is the right opportunity. You know, you cannot always select a timing with exact precision.

"We think it's fair value today given where the markets are, and we are delighted with the chance to work with Telkom [Indonesia Telekomunikasi] to move the company forward."

SingTel has already opened talks with Telkom, which holds the remaining 77.7 per cent in Telkomsel, with a view to increasing its shareholding in the mobile firm.