Indonesian media reports had suggested Telkom's plan to buy a stake in TCI may be scrapped due to impediments linked to tensions between the United States and Iran over Tehran's nuclear programme. [ID:nN21400203]

"In principle Telkom only sees it from the business side...Whether it is profitable for business, whether it has a big opportunity," said Eddy Kurnia, Telkom's vice president for public and marketing communication.

"We've been in talks, but still in very early talks...This sort of cooperation has a long-term risk and consequences. We're doing it extra carefully," he said, without elaborating.

Iran's nuclear row with the West, which has accused Tehran of seeking to develop nuclear weapons, has deterred many foreign companies from doing business in the country.

U.S. sanctions bar American companies from doing business with Iran and United Nations' sanctions have made other firms wary of investing there.

However, analysts say the size of the market and its energy resources still make it an attractive investment prospect.

"The external environment is one of the important factors in business analysis that needs to be taken into account," Kurnia said.

Telkom is 52.4 percent owned by the Indonesian government, while foreign investors own about 44 percent of the shares, while domestic investors hold 3 percent.

In December, Davoud Zareian, head of TCI's public relations office, had said delegations from Russia, China and Indonesia had come for talks about buying shares in the company. He did not name any parties.

The size of the stake to be offered was likely to be around 49 percent, which would require any foreign firm bidding for the stake to team up with an Iranian entity as there is a 35 percent limit for non-Iranians. The state will keep 20 percent ownership. (Reporting by Tyagita Silka; Editing by Ed Davies)