JP/1/HUGHES

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)