Agum delays approval for MGTI acquisition
Sari P. Setiogi, The Jakarta Post, Jakarta
Minister of Transportation and Communications Agum Gumelar has decided to delay giving his crucial approval to the planned acquisition of Central Java telecommunications operator PT Mitra Global Telekomunikasi Indonesia (MGTI) by PT Alberta Telecommunications, according to a labor union official.
The decision was made during a meeting on Wednesday between the minister and members of labor union of state-owned telecommunications company PT Telkom's Central Java and Yogyakarta regional office, which had strongly opposed the transaction.
It was not immediately clear why Agum decided to delay the approval, but labor union spokesman H.M. Ismail told press following the meeting that the minister wanted to arrange a meeting once again between union members, Telkom, and the Office of the State Minister for State Enterprises to help sort out differences.
He said that without approval from both Agum and State Minister for State Enterprises Laksamana Sukardi, the transaction could not proceed.
The labor union had previously planned to stage a strike to protest the acquisition deal.
"We do appreciate the minister's decision to postpone giving his approval and so we will call off our strike plan and wait until the next hearing,"
MGTI is a partner of Telkom in installing fixed lines in the Central Java and Yogyakarta areas under a joint operation scheme in which the Telkom allows MGTI to operate fixed lines in the region in return for a 30 percent share of the revenue. Telkom formed similar joint ventures in other regions during the mid- 1990s, but they turned sour after the 1997-1998 crisis. Telkom managed to buy out four ventures, but it could not acquire MGTI's interest due to lack of money and disagreement over the price.
Late in September, key shareholders of MGTI, including state- owned telecommunications company PT Indosat, Australia's Telstra Corp., and Nippon Telegraph and Telephone Corp., agreed to sell their interests to Alberta.
The government is under pressure to quickly resolve the long- running dispute between Telkom and MGTI shareholders so as to attract new investment into the country's telecommunications sector.