Indosat to acquire video recording firm

Indosat to acquire video recording firm

JAKARTA (JP): The country's international telecommunications
operator, PT Indosat, will buy a stake of up to 40 percent in PT
Yasawirya Tama Cipta, a Jakarta-based private video recording
firm.

The company's general manager of investor relations, Budi
Prasetyo, said yesterday that a basic agreement of the share
acquisition was signed on March 12.

"We expect to seal the final deal by June this year, after
Yasawirya Tama holds its shareholders meeting," he said.

He refused to disclose how much the 40 percent share
acquisition would cost.

"The cost will be much less than Rp 100 billion (US$42.8
million), a level of any dealings allowed by the government to be
decided by Indosat's board of commissioners," he said.

As a production house which provides video recordings for
television broadcasting, Yasawirya Tama also provides video
technical assistance. After the share acquisition, the company
will be 40 percent owned by Indosat and 60 percent by businessman
Youk Tanzil.

Indosat, which is listed on the New York and Jakarta stock
exchanges, announced yesterday that its intention in
participating in the Yasawirya Tama equity is to explore and
develop a multimedia business.

Budi said that the business of multimedia consisted of several
parts including contents, distribution, transportation and
packaging. "Multimedia costs will mostly be spent on contents and
packaging."

Indosat is currently exploring the possibility of providing
multimedia services in the country and has budgeted $13.5 million
for 1996 for the development of a pilot network. The company is
negotiating doing business with Tsuginami, a Japanese
broadcasting firm.

Last year, Indosat's profit reached Rp 459.4 billion ($197
million), 59 percent higher than that in the previous year. The
company has announced an intention to invest about $736.5 million
within the 1996 to 2000 period on regional and international
telecommunications projects and participation in domestic
telecommunications infrastructure to support its core business.

Competition in international telecommunications services
started in August 1994 when private firm PT Satelindo entered the
market. The country's market share of international calls, in the
meantime, has recently shown insignificant growth. Last year's
15.3 percent growth in international calls gained by Indosat was
far lower than the 20.7 percent recorded in 1994.

Indosat is now exploring new business fields after taking
stakes in Japanese and U.S. firms in 1995. Among the planned
projects was the establishment of a joint venture firm in
Kazakstan to provide telecommunications services in that country
with a planned investment of $5 million between 1996 and 2000.

Other planned businesses include strategic alliance with World
Partners Association, a consortium of the American AT&T,
Singapore Telecom and Japanese KDD as the lead parties, which is
expected to enable Indosat to provide seamless-managed
communication network services to its clients worldwide.

Indosat, which owns 1.41 percent shares in Inmarsat-P, a
global mobile satellite system to be launched in 2000, is
currently considering additional satellite-based
telecommunication projects including Iridium, Globalstar and
Odyssey. (icn)