PT Excelcomindo not to involve Telkom, Indosat

PT Excelcomindo not to involve Telkom, Indosat

JAKARTA (JP): Neither PT Indosat nor PT Telkom, the state-
owned telecommunications operators, will be direct shareholders
in PT Excelcomindo, one of the three license holders for the
global system for mobile communications (GSM) cellular service.

Telkom's president, Setyanto P. Santosa, said during a break
in a hearing with members of the House of Representatives
yesterday that it was not true that his company had planned to
take a 15-percent ownership in Excelcomindo.

"Telkom is already involved in Excelcomindo through PT
Telekomindo," he said.

PT Telekomindo is owned 10 percent by Telkom and 54 percent by
PT Rajawali Wira Bhakti Utama, a subsidiary of the Rajawali
Group, controlled by businessman Peter Sondakh. The remaining 36
percent of Telekomindo is collectively owned by several domestic
investors including foundations of the General Attorney's office
and the Armed Forces.

Registered as a private firm, Telekomindo currently runs the
analog cellular mobile phone service (AMPS) systems in Bali,
South Sumatra and Kalimantan.

The government stipulates under Telecommunications Law No.
3/1989, that basic telecommunications services must be provided
by state-owned telecommunications operators.

The involvement of private firms in the basic
telecommunications service industry will be permitted only on
condition that such parties cooperate with state-owned companies
under a joint-operation, joint-venture or management agreement.

There are two state-owned telecommunications firms, Telkom,
which runs the domestic telecommunications business, and Indosat,
which runs the international telecommunications service.

In addition to Telekomindo, there are several other private
operators which run basic telecommunications service including PT
Telkomsel, PT Ratelindo, PT Komselindo, PT Pasifik Satelit
Nusantara, PT Satelindo, PT Metroselular, PT Mobile Selular and
PT Lintas Arta. All of the firms are partly owned by Telkom or
Indosat or both.

Excelcomindo, which plans to launch its GSM services in
Jakarta and Surabaya, East Java, later this year is likely to be
the first private firm to provide a basic telecommunications
service without the ownership of Indosat or Telkom.

In addition to Telekomindo, other shareholders in Excelcomindo
include Nynex of the United States, PT Santana Telekomindo;
Mitsui of Japan; Asian Infrastructure, an Asian investment firm;
and a number of local investors, including Yayasan Kartika Eka
Paksi and Yayasan Tridaya.

Daya Mitra

Setyanto also said yesterday that PT Daya Mitra Malindo, one
of the five private consortia awarded 15-year joint operation
contracts for domestic telecommunication services, had failed to
pay the first monthly installment of the annual Minimum Telkom
Revenues (MTR) to his company.

MTR, scheduled to begin on Feb. 14, are the payments for the
joint operation contracts from the consortia.

"Daya Mitra has made only the initial payment," he said.

He said that Daya Mitra, which should have started a telecom
project in Kalimantan early last month, would consequently face a
penalty if the company failed to resolve the problems by the end
of March.

The penalty will probably be a requirement to pay an
additional amount based on the current interest rate.

"However the delay will not disrupt the existing telecom
network in Kalimantan or Telkom's revenue," he said.

Daya Mitra failed to start its project because its foreign
partner, Telekom Malaysia Bhd., withdrew the project. Daya Mitra
will announce its new foreign suitor, with a 25 percent
ownership, on March 6. The selection is currently between PTT
Telecom of the Netherlands, Cable & Wires of Britain and Dacom of
South Korea.

The government selected the five consortia for the joint
operation contracts to lay and operate about two million
telephone lines in the country's five regions over a 15-year
period. The contracts officially started last January.

Daya Mitra was originally required to install and operate
237,000 phone lines in Kalimantan by 1999 for 15 years.

The company groups ALatieF Corporation, tea producers'
cooperative Kopthindo of Indonesia, Singapore-based American
International Group Inc., TM Communications of Hong Kong and PT
Intidaya Sistelindomitra, a private firm owned 25 percent by
Telkom. (icn)