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)