Indosat buys Global stake

Indosat buys Global stake

CHICAGO (Reuter): Privately-owned discount telecommunications firm, USA Global Link Inc, said Monday that PT Sisindosat, a subsidiary of PT Indosat of Indonesia, had taken a 20 percent equity stake in USA Global for US$20 million.

USA Global said it will use the proceeds to buy switches to be installed in Japan, Europe and Asia in order to build a global network.

USA Global -- which provides callback services, virtual private networks and calling cards -- is a reseller of network capacity on other carriers' networks. The company said it envisages a initial public offering in late 1996.

PT Sisindosat will appoint one member to USA Global's nine- member board of directors.

USA Global had 1995 revenues of $176 million.

Holland Taylor, president and co-founder of USA Global, told Reuters the alliance offered the Indonesian partner an opportunity to participate in the markets of other countries even where facilities were monopoly-owned.

He said a similar deal might be tied up as a result of talks with a national carrier in western European.

"We are in talks," he said.

Taylor said USA Global was moving toward owning more of its own facilities, rather than purely acting as a reseller of the facilities of others.

As an example of the advantages, he said it had bought an indefeasible right of use to a North Atlantic cable -- a permanent lease -- which costs only slightly more than a one-year lease.