UPDATE 1-Indonesia's Telkom aims to buy back SingTel's Telkomsel shares

* Telkom CEO: plan aimed at increasing EBITDA, profit

* Telkom shareholders approve plan to buy SingTel’s stake

* CEO says ceased talks with Bakrie Telecom on consolidation (Updates with details, quotes)

JAKARTA, May 19 (Reuters) - Telekomunikasi Indonesia , the nation’s biggest telecom firm, plans to buy back up to a 35 percent stake owned by Singapore’s Singtel in its mobile unit Telkomsel in a bid to increase its profit, the firm’s CEO said on Thursday.

The plan, initiated by the government and approved by shareholders in Telkom’s annual meeting on Thursday, comes as Telkom struggles to boost profits in a once-fast growing mobile market that is now seeing heated competition.

“We will talk with Singtel to work out the financial details but I think we can do it,” said Rinaldi Firmansyah, Telkom’s CEO, adding that the if the plan materialised it will increase the firm’s profit.

The results of talks must be announced before the end of the year, said Telkom’s chief commisioner.

However Singtel, Southeast Asia’s largest telecoms firm, did not appear to be keen to sell.

“Singtel has a good partnership with both Telkom and Telkomsel and we continue to be a long-term, strategic investor in Indonesia,” a Singtel spokeswoman said.

SingTel set a surprise record dividend payment earlier this month, signalling it may be struggling to find growth avenues through acquisitions after buying stakes in mobile operators in high-growth Asian countries such as Indonesia, India and Thailand about a decade ago. [ID:nL3E7G914P]

Telkomsel is Indonesia’s biggest mobile firm with more than 100 million subscribers at the end of the first quarter. Telkom currently owns 65 percent of Telkomsel, which contributed the majority of the firm’s revenues.

Firmansyah said that Telkom has finally ceased negotiations with Bakrie Telecom , Indonesia’s leading fixed wireless firm controlled by the Bakrie Group, to merge it with its CDMA unit Telkomflexi.

“We just stopped talking to them,” he said, without providing any details.

Sources had said Bakrie Telecom was in talks to buy Telkomflexi for $1 billion but discussions have been hampered by opposition inside Telkom as well as in the government.

Telkom’s shareholders also approved a share buyback with funds of up to 5 trillion rupiah ($584 million). ($1 = 8559.5 rupiah) (Additional Reporting by Kevin Lim in Singapore; Editing by Neil Chatterjee)