JP/1/HUGHES
Subsidiary of Hughes Aircraft signs contract with Bakrie
JAKARTA (JP): A subsidiary of Hughes Aircraft of the United States strengthened its share of the telecommunications industry yesterday with the signing of an agreement on the development of cellular telephones.
Hughes Network System (HNS) signed with PT Ratelindo, a joint venture between the Bakrie Electronics Company (BEC) and PT Telkom, to supply a high-capacity fixed wireless digital telephone system to 250,000 subscribers in Jakarta.
The agreement was signed by HNS' executive vice president, Pradeep Kaul, and Ratelindo's president Hardianto Kamarga.
Minister of Tourism, Post and Telecommunications Joop Ave, who witnessed the signing, said the telephone project will happen in three phases. The first phase, comprised of 50,000 lines worth US$78.5 million, will be completed by April 1995.
The second and third phases, each of which will consist of 100,000 lines, will be constructed later.
Within the just begun Sixth Five Year Development Plan (Repelita VI), Indonesia is expected to install five million telephone lines, of which three million will be constructed by Telkom.
The participation of the private sector has been called essential to accommodating the demand for telecommunications services, as the government's development funds are limited.
Ratelindo, which is 45 percent owned by Telkom and 55 percent by BEC, was established last year to provide fixed-cellular digital radio telephone services.
Installation
Hardianto said Ratelindo plans to install about 500,000 telephone lines in eight large cities throughout the country.
"The rate for Ratelindo's administration and utilization fees will be similar to those charged by Telkom," he said.
However, he acknowledged that the investment needed by Ratelindo to install each telephone line will reach $1,800, far higher than the $1,500 spent by Telkom.
The cellular digital radio telephones (CDRL), the first introduced here, are expected to cater to businesses that cannot be served by the normal telephone system and to customers in areas where there are no telephone cables.
Hardianto said Hughes defeated Motorola and AT&T of the U.S., Ericsson of Sweden and Northern Telecom of Canada in bidding for the contract.
He said that his company was assisted by the Netherlands' telecommunications company PTT Telecom BV, which controls a 30- percent stake in BEC, and a U.S. consultant in the selection. (icn)