Govt vows to keep Telkom and Indosat monopolies

Govt vows to keep Telkom and Indosat monopolies

JAKARTA (JP): The government has no plans to lift monopolies
on the provision of telecommunications services in the country
currently held by the publicly-listed state companies PT Indosat
and PT Telkom ahead of schedule, a senior official has said.

The director general of post and telecommunications at the
Ministry of Communications, Sasmito Dirdjo, said on Monday that
existing regulations relating to the monopoly rights would not be
changed.

"We have a commitment not to change the time frame for lifting
the exclusive rights held by both companies," Sasmito was quoted
by Antara as saying.

Sasmito made the statement to dismiss speculation that both
companies might lose their monopoly rights ahead of schedule
under the draft telecommunications law now being prepared by the
government.

Telkom holds monopolies over the country's long distance call
service until 2005 and over fixed (non-mobile) telephone services
until 2010.

Indosat and Satelindo, a private company partly owned by the
Bimantara group, hold a monopoly over international call services
which lasts until 2004. The Bimantara group is controlled by
Bambang Trihatmojo, the second son of former President Soeharto.

Analysts believe the speculation was one factor behind the
continuous drop in both companies' shares over the past month.

Indosat's shares were quoted at Rp 6,000 on the Jakarta Stock
Exchange last week, as compared a level around the Rp 10,000 mark
last month. Shares in Telkom dropped to Rp 1,500 last week, down
from around Rp 3,500 last month.

Both companies are listed in Jakarta and on the New York Stock
Exchange.

Sasmito said it was likely that the government would review
the monopoly rights after they expired.

Analysts said Sasmito's statement contradicted a clause in the
draft law which seeks to abolish monopolies in the
telecommunications sector.

However, Sasmito insisted the government was committed to
keeping the monopoly rights in place.

He said one clause in the new draft law stipulated that the
monopoly rights would be further regulated by a further
governmental regulation.

The current cross-departmental discussions of the draft law
are expected to finish by the end of September.

The draft will then be forwarded to President B.J. Habibie for
his approval before being submitted to the House of
Representatives for debate. (jsk)