Indosat reviews its investment in 'TPI'<\/p>\n
JAKARTA (JP): Publicly listed international telecommunications
\nprovider PT Indosat is mulling whether to carry through on its
\noption for a 30 percent stake in television broadcaster PT Cipta
\nTelevisi Pendidikan Indonesia (TPI) when its five-year
\nconvertible bonds mature.<\/p>\n
Indosat president Tjahjono Soerjodibroto said on Wednesday the
\ncompany was still determining if TPI would be the appropriate
\nvehicle to develop Indosat's interactive multimedia services.<\/p>\n
\"Our primary reason for entering TPI was because we wanted to
\ndevelop a multimedia business. We still have to see whether TPI
\ncan be developed. This is still being evaluated,\" he told
\nreporters at a journalist workshop.<\/p>\n
Indosat bought five-year convertible bonds worth Rp 150
\nbillion issued by TPI in October last year, with an option to own
\nup to 30 percent in the TV broadcasting unit controlled by Siti
\nHardijanti Rukmana, the eldest daughter of former president
\nSoeharto.<\/p>\n
Established in 1991, TPI is currently suffering a cash-flow
\nproblem due to plunging advertisement spending amid tight
\ncompetition with four other private TV stations.<\/p>\n
Tjahjono said various aspects -- including technology, market
\nand investment -- were under review to see if TPI would be useful
\nin expanding Indosat's multimedia operation.<\/p>\n
An official at Indosat said TPI had never defaulted in paying
\nthe 26 percent interest rate on the convertible bonds.<\/p>\n
He added that the broadcasting firm's shareholders could take
\nrecourse based on the agreement if the station failed to service
\nthe interest or return the principal on maturity.<\/p>\n
Tariff<\/p>\n
Tjahjono also said the country's international telephone call
\nrates would have to be increased in the wake of the sharp plunge
\nin the rupiah.<\/p>\n
He declined to disclose the timetable for the increase and how
\nlarge it would be, saying the plans were still being discussed by
\nthe telecommunications regulator.<\/p>\n
\"We will consider the public's spending capability.\"<\/p>\n
He said the plunge in the rupiah's value meant the country's
\ninternational call rates were the lowest in the world, and
\nIndosat would be in the position of subsidizing foreign telecom
\noperators if incoming calls were less than outgoing ones.<\/p>\n
Tjahjono said that incoming calls were still higher, but the
\nsituation would be reversed if the current cheap rates remained.<\/p>\n
\"The growth of incoming calls is declining,\" he said.<\/p>\n
A collect call to the U.S. is charged at Rp 5,000, or 50 U.S.
\ncents (US$1=Rp 10,000), per minute by Indosat. With a settlement
\ncost of 52 cents per minute, Indosat has to cover the remaining
\n2.5 cents to be paid to the U.S. telephone operator. The subsidy
\nis greater if the interconnection tariff, plus circuit and
\ncentral costs, are taken into account.<\/p>\n
The government increased the international call rates by 25
\npercent early this year to take into account the sharp
\ndepreciation in the rupiah against the U.S. dollar. The rupiah
\nsubsequently fell further in value. (rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/indosat-reviews-its-investment-in-tpi-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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