Fixed-cellular phone project postponed

Fixed-cellular phone project postponed

JAKARTA (JP): The decline of foreign creditors' trust in
Indonesian banking after the disclosure of fraud at Bapindo has
forced a company to delay the establishment of a fixed cellular
telephone project.

"Foreign banks are now very cautious in handling Indonesian
letters of credit (L/C) and we, therefore, have to delay the
launching of our telephone project until the end of this year,"
an executive of the Bakrie Group, Hardianto Kamarga, told
reporters here yesterday.

PT Radio Telephone Indonesia (Ratelindo) originally planned to
introduce cellular digital radio telephones (CDRL), the first of
their kind to be built in the country, in early August. Ratelindo
is a joint venture between Bakrie Group and the state-owned
domestic telecommunications company PT Telcom.

Foreign banks apparently became very cautious after executives
of the state-owned bank Bapindo and the Golden Key Group were
found guilty of being involved in credit fraud. The fraud
involved a usance L/C which was illegally changed into a red-
clause L/C, causing the government to suffer total losses of
US$448 million.

Hardianto, president of Bakrie Electronics Company (BEC), said
yesterday that the first phase of the company's project will be
launched in December. BEC is a Bakrie Group subsidiary which
controls a 55-percent stake in Ratelindo.

"We will install some 5,000 lines by December and expect to
install 45,000 more lines by April 1995," he said.

He explained that Ratelindo will install a total of 280,000
lines in Jakarta and West Java within the next three years.

US$80 million

Hardianto also said that the project, which will utilize a
digital advance mobile phone system (AMPS), will cost US$80
million.

"We have installed seven cell-sides thus far," he said. "The
number of cell-sides will increase to 50 units next year."

He said the project will have a center for wireless telephone
exchange (WTX) at Wisma Bakrie on Jl. Kuningan in South Jakarta.

Ratelindo, which is 45 percent owned by Telkom, is supported
by Hughes Network System (HNS), a subsidiary of Hughes Aircraft
of the United States. HNS will supply a high-capacity fixed
wireless digital telephone systems to subscribers.

Hardianto said PTT Telecom BV of the Netherlands, which
controls a 30-percent stake in Bakrie Electronics Company, will
also support the telecommunications project.

He said that PTT acquired the 30-percent stake at $90 million
in February after two years of negotiations.(icn)