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)