Mitra Global to help install more telephone lines

JAKARTA (JP): PT Mitra Global Telekomunikasi Indonesia, a private firm commissioned to install telephone lines in Central Java, is willing to help the state meet increased national targets for telecommunications development.

Mitra Global's president, S.W.S. Hardjito, outlined the company's plans after signing a US$480 million loan agreement with foreign banks yesterday.

"Mitra Global intends to install 100,000 additional telephone lines beyond the 400,000 lines required by the government," Hardjito said.

State-owned PT Telkom commissioned Mitra Global last year to connect the 400,000 telephone lines in Central Java by March 1999.

The private company will manage them together with an existing 325,000 lines, previously installed by Telkom, until 2010.

Mitra Global is one of five private consortia which won 15- year joint-operation contracts to install approximately 2.2 million telephone lines in Central Java, West Java, Sumatra, Kalimantan and the eastern islands.

The government has since raised its target for establishing new telephone lines during its Sixth Five-Year Development Plan by 54 percent from five million to 7.7 million lines.

The new target includes 6.7 million fixed telephone lines and capacity for one million mobile telephones.

Hardjito said that out of the original target of five million lines, Telkom planned to install three million in Jakarta and East Java.

"But Telkom has indicated that it will be unable to install more than its target, so the additional lines will probably be divided among its five private contractors."

Hardjito said yesterday that his company would be able to install a total of 500,000 lines by the end of 1999, but not by the March 1999 deadline set by the government.

Mitra Global yesterday signed a $480 loan facility extended by 16 international banks, led by three main arrangers -- the Australia and New Zealand Banking Group Limited (ANZ), Dai-Ichi Kangyo Bank Limited and Deutsche Bank Asia Pacific (Singapore Banking Corporation).

Hardjito said the loan, which matures in 2004, has an interest rate of 1.35 points above the London Inter-Bank Offered Rates (LIBOR).

"We need an investment of $640 million to install 400,000 lines by March 1999. We need to increase the investment to $750 million if we want to install 500,000 lines," he said.

Mitra Global is a consortium jointly owned by the state-owned PT Indosat, PT Widya Duta Infotel, Telstra of Australia, NTT, Itochu and Sumitomo of Japan, and various domestic companies. (icn)