PTT Telecon and Setdco buy Telkomsel shares

PTT Telecon and Setdco buy Telkomsel shares

JAKARTA (JP): PT Telkomsel, a global system of mobile
communications (GSM) operator, sold 22.5 percent of its shares
last night to PTT Telecom of the Netherlands and the Setdco
Group.

The deal was a follow-up to letters of undertaking, which were
signed on Feb. 14 between Telkomsel, PTT Telecom and PT Setdco
Megacell Asia of the Setdco Group.

Under the deal, PTT Telecom Netherlands will pay US$333
million, comprising a cash payment of $304 million and in-kind
contributions worth $29 million, for 17.28 percent of Telkomsel,
while Setdco Megacell is to pay $96.4 million, including $88
million in cash and $8.4 million in in-kind contributions, for
five percent of Telkomsel.

Telkomsel's president, Koesmarihati Sugondo, said that the
non-cash payments will include personnel and expertise training
and software contributions. The value of the in-kind
contributions may increase in the next two to three years.

Last night, Telkomsel also signed a subscription agreement
with PTT Telecom and Setdco, respectively, and a technical
assistance agreement with Telkomsel and PTT.

Telkomsel was established in 1995 as the country's second GSM
operator by the state-owned telecommunications firms PT Telkom
(with 51-percent of the shares) and PT Indosat (49 percent).
After last night's deal, Telkom and Indosat will hold 42.72
percent and 35 percent of Telkomsel shares respectively.

The bid for the acquisition of Telkomsel shares started in
August 1995 when the company invited 15 foreign telecom operators
and four domestic firms to submit their proposals.

PTT Telecom is a subsidiary of the Dutch Koninklijke PTT
Nederland (KPN).

PTT Telecom's president for Asia, Jan B. Volbeda, said that
his company would deploy a team of experts to support Telkomsel's
GSM operation and customer service. The Dutch firm will also
assign two of its representatives, one as a director and the
other as commissioner, at Telkomsel.

In Indonesia, PTT Telecom also has stakes in PT Bakrie
Electronics Company, a Bakrie Group subsidiary which controls a
radio telephone firm PT Ratelindo.

Koesmarihati who was previously Telkom's director of
development said that Telkomsel would invest Rp 450 billion this
year for the expansion of its GSM operation in 17 locations in
the country.

The company, which last year invested Rp 260 billion,
currently serves 34,500 subscribers in 114 cities in 12
provinces.

Telkomsel which launches its service in Jakarta today, aims to
serve 23 out of the country's 27 provinces by the end of this
year.

An executive said last night that Telkomsel currently has a
networth of $1.92 billion. (icn)