KSO partners support telecoms reform plan<\/p>\n
JAKARTA (JP): Partners of state-owned telecommunications firm
\nPT Telkom in the joint operation scheme (KSO) have hailed the
\ngovernment's commitment in its letter of intent to the
\nInternational Monetary Fund to reform the country's telecoms
\nsector.<\/p>\n
KSO partners' spokeswoman Fifi Aleyda Yahya announced on
\nMonday the partners were particularly relieved to know that the
\ngovernment was committed to providing a mutually acceptable
\nsolution to the conflict involving KSO contracts.<\/p>\n
She said the commitment had given the partners an opportunity
\nto achieve a win-win solution in their ongoing tough negotiations
\nwith Telkom.<\/p>\n
\"Negotiations between KSO partners and Telkom have not been
\nproductive so far because the existing contracts are a zero sum
\ngame. If one party gains, the other must lose,\" she said.<\/p>\n
According to the letter of intent signed last week, the
\ngovernment's major agendas this year are to adopt a new tariff
\npolicy by March this year, adopt a new network of interconnection
\nrules, finalize the implementation of regulations for the new
\nTelecommunications Law by June, finalize new licenses for major
\noperators and establish an agency to provide transparent and
\npredictable regulations.<\/p>\n
The government also states in the letter of intent that it
\nwill reduce Telkom and Indosat's extensive cross-ownership in the
\nsector and secure a mutually acceptable solution to the issues
\nconcerning the revenue-sharing contracts between Telkom and its
\nKSO partners.<\/p>\n
Telkom and its five KSO partners -- PT Pramindo Ikat
\nNusantara, which operates in Sumatra; PT AriaWest International
\nin West Java; PT Mitra Global Telekomunikasi Indonesia in Central
\nJava; PT Cable & Wireless Mitratel in Kalimantan; and PT Bukaka
\nSingtel International in eastern Indonesia -- have been involved
\nin serious talks since November last year in order to find a
\nsolution to their differences on the partners' rights and
\nobligations.<\/p>\n
The KSO scheme has been under fire since its establishment in
\n1996, with much of the criticism leveled at the five partners,
\nquestioning their performance in meeting terms of contracts and
\nthe allocation of profits to Telkom.<\/p>\n
The five partners were appointed in 1995 by Telkom to finance,
\nbuild and operate domestic fixed-line telephone services across
\nthe country on behalf of Telkom under a revenue-sharing scheme
\nthrough 2010.<\/p>\n
Under the agreement, KSO partners are required to install,
\nduring a three-year construction period from 1996 to 1999, a
\ntotal of two million new access lines, a figure which was revised
\ndownward to 1.2 million in 1998 by the government after the
\npartners said the initial figure had became impossible to meet
\namid the prolonged economic crisis.<\/p>\n
The agreement also requires the partners to pay Telkom a
\nmonthly fixed amount known as minimum Telkom revenue (MTR) and
\ndistributable Telkom revenue (DTR) based on their revenue.<\/p>\n
The DTR figure was also revised in 1998 by the government from
\n30 percent to 10 percent for Telkom and from 70 percent to 90
\npercent for partners.<\/p>\n
The partners said they had paid Telkom approximately 45
\npercent, or Rp 5.03 trillion (US$718 million), of the total
\nrevenue collected since early 1996 to March 1999.<\/p>\n
Yahya said the partners expected that the KSO scheme could be
\nattuned to the new business setting the government planned to
\nintroduce in the country's telecoms sector in order to create an
\nenvironment conducive to renewed investment.<\/p>\n
She said that since 1996 the five KSO partners had invested
\n$1.56 billion in telecommunications infrastructure to provide
\n1.39 million telephone lines across the country, except for
\nJakarta and East Java.<\/p>\n
\"However, new investment has been at a virtual standstill
\nsince 1998 because the crisis caused an imbalance in the market's
\neconomic fundamentals,\" she said.<\/p>\n
The partners said they needed to inject between $3 billion and
\n$5 billion to finance the development of between two million and
\nthree million fixed lines within the next five years.<\/p>\n
However, they said they would not make any major investment or
\nestablish new lines until they had achieved a mutual and
\nsignificant agreement with Telkom. (cst)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/kso-partners-support-telecoms-reform-plan-1447893297",
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"sponsor_url": "https:\/\/okusiassociates.com"
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