PT Telkom wary over telephone line target

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)