Indonesia's telecom groups to name financial adviser<\/p>\n
SINGAPORE (Dow Jones): Five consortiums working to expand
\nIndonesia's telephone service will soon jointly appoint a
\nfinancial adviser to work on their proposals to restructure the
\ncountry's telecommunications business.<\/p>\n
Executives from the five met Friday in Singapore with four
\ninvestment banks competing to be appointed. The four are Credit
\nSuisse First Boston of Switzerland, Credit Lyonnais of France,
\nCanadian Imperial Bank of Commerce and ABN-Amro Bank of the
\nNetherlands.<\/p>\n
An executive of one of the consortiums told Dow Jones
\nNewswires on Sunday that a decision on the winner is likely
\nbefore the end of August.<\/p>\n
The five consortiums, each comprising Indonesian private
\ninvestors and at least one foreign phone company, were hired by
\nthe Indonesian government in 1995 to expand and run phone service
\nin five different regions of Indonesia. They have worked with the
\ndomestic state telephone company, PT Telekomunikasi Indonesia,
\nwhich retained the sole right to install and run phone lines in
\nJakarta and the province of the East Java.<\/p>\n
Among the foreign partners in the consortiums, known as KSOs,
\nare France Telecom, MediaOne of the U.S., Telstra of Australia,
\nJapan's NTT, Britain's Cable & Wireless and Singapore
\nTelecommunications Ltd.<\/p>\n
The KSOs have succeeded in substantially expanding the number
\nof phone lines in Indonesia, but the country's economic crisis
\nand political uncertainty have affected the business of the
\nconsortiums and PT Telkom, as the utility is known.<\/p>\n
Also, the five KSOs and PT Telkom, as the utility is known,
\nhave had differences on operating and financial issues, leading
\nthe KSOs to want to change their partnership with Telkom when
\ntheir current working agreement expires at the end of this year.<\/p>\n
The Indonesian government has been making plans to reform the
\ncountry's overall telecommunications business, including creation
\nof a duopoly under which a new company could compete directly
\nwith PT Telkom in domestic service. A proposed new
\ntelecommunications law is currently under consideration by
\nParliament.<\/p>\n
The KSOs have jointly prepared a preliminary proposal for the
\ncreation of a new company, tentatively called PT Constantinople,
\nto enter the phone business. Under the proposal, the KSOs,
\nTelkom's existing shareholders and the Indonesian government
\nwould be the original owners.<\/p>\n
The KSO executive who was part of Friday's Singapore meetings
\nsaid the financial adviser will help \"push ahead plans to
\nrestructure Indonesia's communication business in concert with
\nthe government's blueprint for a duopoly.\"<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/indonesias-telecom-groups-to-name-financial-adviser-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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