Private firms eye state-owned GSM project

Private firms eye state-owned GSM project

JAKARTA (JP): Several local private telecommunications firms
have expressed an interest in acquiring a majority shareholding
in PT Telkomsel, the state-owned digital cellular
telecommunications operator, a telecommunications executive says.

"But I don't think it would be wise for the government to let
private firms buy into Telkomsel, which will operate the Global
System for Mobile Communications (GSM) cellular
telecommunications nationally," Chairman of the Indonesian
Telecommunications Association (Apnatel) Rahardjo Tjakraningrat
said yesterday.

PT Telkomsel should, instead, be maintained as a state company
capable of providing "competition to the private GSM operators in
the country," Rahardjo said.

PT Telkomsel is owned by the state-owned telecommunications
companies, PT Telkom and PT Indosat.

Rahardjo said that several widely diversified business groups
had proposed that they acquire more than 50 percent of
Telkomsel's shares.

However, when contacted for confirmation yesterday, executives
at both of Indosat and Telkom said that not a single private firm
had formally asked to buy Telkomsel, 51 percent of which is owned
by Telkom, with 49 percent belonging to Indosat.

An Indosat spokesman said: "The Telkomsel project has been
going well, as Indosat indicated in the prospectus for its
initial public offering last year."

The establishment of Telkomsel, with an equity capital of Rp
300 billion, was approved by the Ministry of Finance last
September.

But since aspects of the new company's legal and management
structure are still being processed it cannot expand its GSM
network.

GSM was launched in Indonesia by Telkom on Batam island, near
Singapore, in 1992. The Batam project, valued at Rp 12 billion
(US$5.5 million), has so far run successfully with an estimated
2,000 lines connected every year.

Meanwhile, PT Satelindo, which is 60 percent owned by PT Bima
Graha, an affiliate of Bimantara group, 30 percent by Telkom and
10 percent by Indosat, launched its own GSM project in Jakarta
last September.

According to Rahardjo, the government is likely to license
more GSM operators in the coming years because the business is
still promising and the country's frequency-span makes the
granting of further licenses feasible.

"At least seven other telecommunications firms have proposed
to operate GSM, but all of them have been disqualified," he said.
(icn)