The period for the non-legally binding MOU to combine PT Indosat Tbk and PT Hutchison 3 Indonesia will be extended until June 30, it said in a statement.
"This extension will provide more time to complete the ongoing due diligence and negotiate the final terms of a possible combination of the entities," it said.
Ooredoo and Hong Kong conglomerate CK Hutchison Holdings are exploring a deal to merge their Indonesian units, the two companies said late last year.
A deal between Indosat and PT Hutchison 3 Indonesia would help them to better compete against state-backed Telkomsel which controls around half of the cellular market in the world's fourth most populous country.
(Reporting by Saeed Azhar, editing by Louise Heavens)