Indosat hails joint venture plan with MGTI for C. Java

Indosat hails joint venture plan with MGTI for C. Java

JAKARTA (JP): State-owned telecommunications company PT
Indosat said it welcomed the idea of a joint venture with PT
Mitra Global Telekomunikasi Indonesia (MGTI) to manage
telecommunications services in Central Java and Yogyakarta.

Indosat's finance director Habimono Koesoebjono said the
company supported the joint venture plan because it was easier to
manage than the joint operation (KSO) system which MGTI now had
with state-owned company PT Telkom.

However, the plan will have to wait until Indosat's
acquisition of Telkom's rights and obligations in MGTI are
finalized, he said.

MGTI is one of the five operators of joint operation systems
with Telkom which were licensed in late 1995. The other four are
PT AriaWest International for West Java, PT Paramindo Ikat
Nusantara for Sumatra, PT Dayamitra Malindo for Kalimantan and PT
Bukaka Singtel Indonesia for eastern Indonesian areas.

Indosat's acquisition of Central Java and Yogyakarta's
telecoms operations was part of a US$1.5 billion transaction
between the two state companies in May to end with their
crossholdings in a number of telecoms businesses.

The deal involving Telkom's rights in the Central Java and
Yogyakarta telecommunications regions -- also known as regional
division (Divre) IV -- was valued at $375 million.

The other transactions include the sale of Indosat's 35
percent stake in cellular phone company PT Telkomsel to Telkom
worth $945 million and Indosat's purchase of Telkom's 22.5
percent shares in cellular phone operator PT Satelindo for $186
million.

The finalization of the transaction is still subject to
certain conditions, including the completion of the Telkomsel and
Satelindo transactions, the granting of licenses for local and
long-distance phone services to Indosat by the government, and
the execution of interconnection agreements, Habimono said.

"We still have several conditions to meet, but we have time
until the end of January next year," he said, without
elaborating.

MGTI is 32.5 percent owned by PT Widya Duta Infotel, 30
percent by Indosat, 20 percent by Australia's Telstra Global
Ltd., 15 percent by the United Kingdom's NTT Finance Ltd and 1.25
percent each by Japan's Sumitomo Corp. and Itochu Corp.

Earlier MGTI's president Sutrisman said its shareholders had
agreed to continue its operations in Central Java and Yogyakarta
with Indosat but under a new joint venture company. (tnt)