The state-controlled fixed-line monopoly employs around 43 000 people, after cutting some 17 000 jobs in the past two years. The government plans an initial public offering of around 20% of its shares by March 2003 in what will be its biggest privatisation.
Telkom said that after consulting organised labour, it was offering staff in its Access Network Operations, Technology and network Services, and Network Operations units the voluntary severance packages.
"The process is purely voluntary, and is underpinned by an extensive social plan designed to assist staff to start their own small businesses, retire in financial security or prepare for alternative employment," it said.
Telkom is 30% owned by SBC of the United States and Telekom Malaysia.
Telkom spokesman Andrew Weldrick said about 30% of Telkom's workforce belonged to the Communication Workers Union and 32% were members of the Alliance of Telkom Unions.
Asked what the company would do if 1 700 staff did not take up the offer, he said: "It remains to be seen. We have an agreement with the unions that there will be no retrenchments within this financial year." Telkom's financial year runs to March 31.