Abstract: ITT's Indosat developed into a very successful enterprise. It provided handsome returns to its parent while yielding significant benefits to Indonesia by introducing modern telecommunications technology. The improvement came at a critical time, when the country was trying to attract foreign investors, for whom telecommunications really mattered. Moreover, Indosat set the stage for the subsequent development of the country's domestic satellite communications network by training Indonesians in technical and managerial skills. But by late 1979, almost thirteen years after the original deal was struck, ITT's expatriate manager in Indosat, George Hunter, heard rumors of trouble. It would turn out that ITT's unwillingness to respond favorably to a politically attractive proposal triggered a chain reaction of unexpected magnitude. The trouble also reflected much deeper causes that affected relations between foreign investors and the governments of developing countries.

Keywords: International Telephone and Telegraph, ITT, Indonesia, foreign investment, telecommunications, Indosat,