Wed, 20 Dec 2000

Pramindo prefers joint venture with Telkom

JAKARTA (JP): PT Pramindo Ikat Nusantara has proposed the establishment of a joint venture with PT Telkom to resolve a two- year dispute over its joint-operation agreement with the state- owned telecommunication company.

Pramindo, a foreign joint venture contracted to install and operate telephone lines in Sumatra on Telkom's behalf, along with four other contractors, have demanded an increase in telephone tariffs so as to bring them to profitability, or else have their contracts revised.

The five have been negotiating with Telkom and several options have been put on the table, including the possibility of forming a joint venture arrangement with Telkom. Other alternatives include maintaining the contracts as they are, modifying the contracts, buyout of the contractors by Telkom, and forming joint venture deal with PT Indosat, the smaller state-telecommunication company.

Pramindo vice managing director Irawan Santoso said his preference was for a joint venture with Telkom.

This, he said, was a better option than a Telkom buyout.

He added that he did not expect any decision by Telkom until after its annual shareholders' meeting in March, 2001.

Irawan said Pramindo remained committed to installing 100,000 new telephone lines in Sumatra next year.

The company has installed 395,000 lines since it started operating in Sumatra in 1996.

Pramindo is owned by France Telekom which has a 40 percent stake, Astratel (35 percent), Indosat (13 percent), Marubeni (8 percent), and International Finance Corporation, a unit of the World Bank.

Pramindo and four other operators signed an agreement with Telkom in 1996 to finance, build and operate domestic fixed line telephone services across the country under a revenue-sharing scheme through to 2010.

The other four operators are PT AriaWest International in West Java, PT Mitra Global Telekomunikasi Indonesia in Central Java, PT Cable & Wireless Mitratel in Kalimantan, and PT Bukaka Singtel International in eastern Indonesia.

PT Telkom controls the most profitable markets of Jakarta and East Java. (05)