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)