PT Telkom wary over telephone line target

JAKARTA (JP): State-owned PT Telkom and its private partners will face difficulties in meeting the government's target to install eight million telephone lines in the current Sixth Five- Year Development Plan.

Dadad Kustiwa, a director of Telkom, said yesterday meeting the new telephone target would be difficult in the years ahead as the fall in the rupiah's value would make the procurement of new telephone facilities more costly as the impact of the sharp fall in the rupiah in the last four months.

It would, therefore, be necessary for the government to review the target in the five year period to March 1999, he said.

"The current monetary condition is not favorable for telecommunications companies, including Telkom, as most investment is still in dollars," he said, adding that the raw material for telecommunications projects had to be imported.

Telkom and its private partners have installed less than four million lines since the beginning of the five-year development plan in April 1994.

He said that five private firms were awarded 15-year concessions by Telkom to install 2.2 million telephone lines from January 1996 to March 1998, but had only installed 259,000 lines this year.

"The figure is far below the target set by the government," Dadad said as quoted by Antara.

Dadad said that from January 1996 to now, 1.1 million new lines have been installed by the five private companies.

In January 1996, Telkom handed over the management of its telecommunication networks in Sumatra, Kalimantan, West and Central Java, Sulawesi, Maluku, Irian Jaya and Nusa Tenggara to five companies under joint operation contracts.

In addition to installing telephone lines, the five firms are required to manage them and existing lines until 2010. Telkom is to install, operate and manage at least three million lines in Greater Jakarta and East Java.

The five private firms, each joint ventures between domestic and overseas operators, are PT Pramindo Ikat Nusantara (Sumatra), PT Ariawest International (West Java), PT Mitra Global Telekomunikasi Indonesia (Central Java), PT Daya Mitra Telekomunikasi Mitratel (Kalimantan) and PT Bukaka SingTel International (Eastern Indonesia).

The government last year raised its installation target of eight million telephone lines for the ongoing Sixth Five-Year Development Plan by 60 percent. The target includes 6.7 million fixed-telephone lines and a network capacity for 1.3 million mobile telephones.

The previous target was only five million lines.

Dadad said that Telkom did not have the authority to revise the telephone target as the figure had to be set by the Ministry of Tourism, Post and Telecommunications.

Telkom's coordinator of the KSO monitoring team, S. Widyonarko, said earlier this month five private companies might not be able to reach their target for this year. But he said that they would speed up the construction of new telephone lines in upcoming years to reach long-term targets.

The sharp deprecation of the rupiah against the dollar resulted in a slower growth for Telkom's net profit in the third quarter of this year. The company's net profit rose less than 0.1 percent to Rp 1.126 trillion in the 1997 January to September period from Rp 1.125 trillion last year. (icn)