Komselindo delays plan to sell part of its shares

JAKARTA (JP): PT Komunikasi Selular Indonesia (Komselindo), a private cellular telecommunications operator, has delayed its plan to sell part of its shares due to the ongoing currency upheaval.

Company commissioner Ronald Korompis told The Jakarta Post here yesterday that the currency upheaval, which had hit most Southeast Asian countries, affected negotiations with foreign telecommunications operators as the prospective buyers.

"We'll wait until the situation gets better," he said.

The company plans to sell around 25 percent of its shares to a foreign telecommunications operator through a private placement deal.

Komselindo, which runs the advanced mobile phone service (AMPS) system, has short-listed three overseas telecommunications companies, including Singapore Telecom (SingTel) of Singapore, and Hutchison Telecom and First Pacific, both of Hong Kong.

SingTel has been regarded as the appropriate buyer.

SingTel's corporate communications manager Ada Fong, however, refused to comment on the matter.

"It's company policy not to comment on rumors or speculation about acquisition, mergers, divestitures or other business combinations," she told the Post.

SingTel has affiliated overseas cellular operators in China, Norway, Sri Lanka and Vietnam. In Indonesia, SingTel also has stakes in PT SkyTelindo, a radio paging provider, and in PT Bukaka SingTel, a telecommunications network contractor.

Hutchison and First Pacific operate in Indonesia through joint ventures: Personal, a pager operator, and PT Metrosel, a cellular provider, respectively.

Komselindo, set up in January 1995, is 65 percent controlled by PT Elektrindo Nusantara, an affiliate of the Bimantara Group, and 35 percent by state-owned domestic telecommunications operator PT Telkom.

Sources said that the company would offer up to 25 percent of its shares to a selected party for an estimated US$225 million. The company has an assessed worth of some $900 million.

Korompis, who is also vice president of Elektrindo, said that when the acquisition was completed, his company's and Telkom's shares would dilute equally.

Komselindo's business was previously run jointly by Telkom and Elektrindo under a revenue-sharing arrangement. In addition to Komselindo, AMPS systems are also operated in Indonesia by PT Telesera and Metrosel.

The AMPS operators have decided to improve their service by upgrading to CDMA technology. Komselindo has awarded a multimillion dollar contract to Lucent Technologies of the U.S. to supply and install the CDMA system.

AMPS telephones are known to be less immune to cloning problems. The government has approved the U.S.-developed CDMA technology, which can reduce overall network costs and provide exceptional voice quality. CDMA is being adopted around the world as the wireless industry standard to deliver digital cellular and personal communications services. It offers economical, clear and secure wireless communications.

Lucent said earlier this year that Komselindo had agreed to install an overlay CDMA system on its existing AMPS network in Jakarta; Bandung in West Java; Manado and Ujungpandang in Sulawesi; and Medan and Banda Aceh in Sumatra. The CDMA blueprint calls for the eventual establishment of a 750,000-user network.

More than 300 base stations and a 13-kilobyte-per-second CDMA voice-coder would be supplied and installed by Lucent which won a bid over Samsung of South Korea and Motorola of the U.S. (icn)