UPDATE 1-Emirates Telecom to buy 16 pct of Indonesia operator

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DUBAI, Dec 11 (Reuters) - Emirates Telecommunications Corp ETEL.AD (Etisalat) said it would buy a 16 percent of PT Excelcomindo Pratama Tbk EXCL.JK for $438 million to enter Indonesia, the world's fourth most populous country.

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, the United Arab Emirates-based operator said in a statement.

Excelcomindo is a 67 percent owned unit of Telecom Malaysia (TLMM.KL: Quote, Profile, Research, Stock Buzz), whose third-quarter profit jumped 37.5 percent largely driven by growth in its home market and Indonesia.

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.

"This investment represents an important step for Etisalat's international expansion strategy into Asia," Etisalat Chairman Mohammad Omran said in a statement.

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 percent at the end of September, Etisalat said.

Indonesia's telecoms sector has attracted several new entrants. Telekom Malaysia (TLMM.KL: Quote, Profile, Research, Stock Buzz) said in April it had bought 7.4 percent of Excelcomindo, raising its stake in the Jakarta-based operator to 67 percent.