Govt to install more telephone lines by 1999

Govt to install more telephone lines by 1999

CIMAHI, West Java (JP): The government plans to add at least
1.5 million telephone lines to the five million targeted to be
installed during the ongoing Sixth Five-Year Development Plan
(Repelita VI) which ends in March 1999.

Both Director General of Post and Telecommunications Djakaria
Purawidjaja and the president of the state-owned domestic
telecommunications provider PT Telekomunikasi Indonesia (Telkom),
Asman A. Nasution, said that the planned installation of five
million telephone lines within the current Repelita VI period was
a minimum target.

"It will be very good for everybody if there more than five
million telephone lines will be installed," Nasution said after
attending a ceremony for the awarding of an inter-connection test
certificate to PT Aria West International here on Saturday.

The government originally planned to install at least five
million lines within the current Repelita VI period, of which
some 2.2 million will be established by five private firms under
15-year joint operation contracts with Telkom, while the other
three million lines will be installed in the greater Jakarta area
and East Java by Telkom itself.

"The government will soon announce the new target. A special
team is still discussing the matter after consulting with
officials from the National Development Planning Board
(Bappenas)," Djakaria said.

He refused to disclose a particular quantity, saying that
Minister of Tourism Post and Telecommunications Joop Ave would
soon determine the matter.

In its latest annual report, Telkom announced that its network
development plan exceeds the government's target and calls for
the nationwide construction of approximately 6.5 million lines
the during five years ending on Dec. 31, 1998. This will bring
the total telephone lines in Indonesia by that date to 8.9
million.

It's not clear, however, whether or not the additional
telephone lines will be installed in the greater Jakarta area and
East Java, two sites which will remain under the management and
operation of Telkom.

Certification

On Saturday, Aria West, a joint venture of US West
International (with 35 percent of the shares), the Asian
Infrastructure Fund (12.5 percent) and PT Artimas Kencana Murni
(52.5 percent), accepted the test certificate from Djakaria for
its wireless local loop operation here, a town about five
kilometers from Bandung, the capital of West Java.

The company, one of the five private firms awarded 15-year
concessions by Telkom, is responsible in the first phase to
install and operate 500,000 lines by 1999 after taking over the
operation of some 425,000 existing telephone lines in West Java
in January. The second phase is the operation of Telkom
facilities in West Java by Aria until 2010.

Aria West, using Digital Cordless Telephone System (DCTS)
equipment supplied by NEC of Japan, demonstrated on Saturday its
telephone connections to Serang in West Java, Pamanukan in East
Java, Denver in the United States and Hong Kong.

Aria West's president, John G. Vondras, said that his company
would be able to install up to 650,000 lines or 30 percent more
than the contracted lines.

Some analysts believe that the West Java concession will
probably be the most profitable among the five telecommunications
contract areas.

Aria West has signed an agreement with four leading arrangers,
including Chase Bank, Canadian Imperial Bank of Commerce, Credit
Lyonnais and Sanwa Bank, to raise US$615 million in project
finance facilities to fund the establishment of the 500,000
telephone lines in West Java.

The company has paid Rp 284 billion ($120.7 million) in fees
this year to Telkom as compensation for the operation of its
existing telephone networks in West Java. (icn)