Nynex joins Indonesian digital cellular venture

Nynex joins Indonesian digital cellular venture

NEW YORK (UPI): Nynex Corp. announced Wednesday it will buy a 23 percent stake in Excelcomindo, a digital cellular venture aimed at the untapped Indonesian market of 195 million.

Nynex did not disclose the value of the investment, but called it the largest U.S. interest in the Indonesian telecommunications market to date.

Nynex spokesman Dave Frail said the partners estimate the venture will require US$800 million in capital investment and added Nynex and two other non-Indonesian partners plan to invest $250 million. Frail noted the partners have agreed not to disclose the value of their individual investments.

Excelcomindo plans to begin offering digital mobile telephone service based on the European global standard for mobile (GSM) system beginning in mid-1996 and to reach large Indonesian cities throughout the country by 1998.

The New York-based regional Bell operating company said the investment builds on its other investments in neighboring Thailand and the Philippines.

Indonesia, the world's 15th largest nation with more than 17,000 islands, has one of the lowest telephone penetration rates in the world -- about 1.8 telephone lines per 100 people, Nynex said.

Its current mobile communications market comprises between 100,000 and 150,000 subscribers on four regional analog networks and two recently licensed national GSM networks, Nynex said.

Nynex said it will be the strategic operating partner with PT Telekomindo, the major Indonesian shareholder; Mitsui, the Japanese trading firm; Asian Infrastructure Fund, an Asian investment firm; and several local investors, including Santana Telekomindo, Yayasan Kartika Eka Paksi, and Yayasan Tridaya.

Nynex, Mitsui and the Asian fund are contributing the $250 million, the spokesman said.

"A very low telephone penetration rate coupled with rapid economic-growth have led to a dramatic increase in demand for telecommunications in Indonesia," said Frederic Salerno, Nynex vice chairman -- Finance and Business Development. "Digital cellular service using state-of-the-art engineering and technology is an ideal way to rapidly make telephone service available in densely populated cities."

Excelcomindo will hold one of three nationwide licenses for GSM cellular service. The new company represents Nynex's largest international cellular venture to date.