Talks between Telkom and KSO partners show no progress
Talks between Telkom and KSO partners show no progress
JAKARTA (JP): Director General of Post and Telecommunications
Sasmito Dirdjo said on Tuesday that talks to end the dispute
between state-owned telecommunications company PT Telkom and its
joint cooperation scheme (KSO) partners showed no progress.
So far, talks between Telkom and its five partners had not
even succeeded in narrowing-down the options made to end the
dispute, he said after a meeting of officials from the Ministry
of Transportation and Communication.
" (Talks) are still not focused. There are still many
alternatives to be considered," Sasmito said.
He said that PT Telkom was persistent in its preference of
modifying and continuing existing contracts, while the partners
are keeping their stance as a joint venture company.
"If there's no compromise made then we will have to buy back
the partners' assets," Sasmito said.
A further cause for dispute had also emerged from the
differences in the valuation of each company's assets by each
party's financial advisor, he said.
"Some of the results of the valuation are far from the
government's own valuation, and some are closer," Sasmito said
without elaborating further.
He said that ultimately it would be up to the shareholders to
decide on the fate of the KSO scheme. But so far, the Ministry of
Finance, representing the government's stake in Telkom, has not
responded positively to the problem, Sasmito said.
"It's not that they are not tuned-in to the problem, but they
have bigger things to think about," he explained, adding that on
his part, he will not stop urging the Ministry of Finance to meet
and resolve the problem.
The disputes between Telkom and its five partners have been
long and drawn-out.
The joint cooperation scheme which started in 1996 to
accelerate the growth of Indonesia's telecommunications sector
did not go as well as planned.
The joint cooperation scheme was to allow private companies to
build, operate, and develop telecom networks in five regions;
Sumatra, West Java, Central Java, Kalimantan, and the eastern
part of Indonesia.
The partners have three years to build two million new
telephone lines in the five regions, and have the rights to
operate and develop the networks until 2010 under a revenue
sharing scheme.
The five partners are PT Pramindo Ikat Nusantara, which
operates in Sumatra, PT Aria West International in West Java, PT
Mitra Global Telekomunikasi Indonesia in Central Java, PT Cable &
Wireless Mitratel in Kalimantan and PT Bukaka Singtel
International in eastern Indonesia.
However, infrastructure building was halted as
telecommunications equipment became more expensive and the
business no longer profitable during the Asian economic crisis in
1998.
As of March 1999, only 1.4 million lines were successfully set
up.
In 2000, when it seemed that business was to regain momentum,
the KSO scheme became the source of fresh disputes as discontent
surfaced over the continuation of the scheme. (tnt)
JAKARTA (JP): Director General of Post and Telecommunications
Sasmito Dirdjo said on Tuesday that talks to end the dispute
between state-owned telecommunications company PT Telkom and its
joint cooperation scheme (KSO) partners showed no progress.
So far, talks between Telkom and its five partners had not
even succeeded in narrowing-down the options made to end the
dispute, he said after a meeting of officials from the Ministry
of Transportation and Communication.
" (Talks) are still not focused. There are still many
alternatives to be considered," Sasmito said.
He said that PT Telkom was persistent in its preference of
modifying and continuing existing contracts, while the partners
are keeping their stance as a joint venture company.
"If there's no compromise made then we will have to buy back
the partners' assets," Sasmito said.
A further cause for dispute had also emerged from the
differences in the valuation of each company's assets by each
party's financial advisor, he said.
"Some of the results of the valuation are far from the
government's own valuation, and some are closer," Sasmito said
without elaborating further.
He said that ultimately it would be up to the shareholders to
decide on the fate of the KSO scheme. But so far, the Ministry of
Finance, representing the government's stake in Telkom, has not
responded positively to the problem, Sasmito said.
"It's not that they are not tuned-in to the problem, but they
have bigger things to think about," he explained, adding that on
his part, he will not stop urging the Ministry of Finance to meet
and resolve the problem.
The disputes between Telkom and its five partners have been
long and drawn-out.
The joint cooperation scheme which started in 1996 to
accelerate the growth of Indonesia's telecommunications sector
did not go as well as planned.
The joint cooperation scheme was to allow private companies to
build, operate, and develop telecom networks in five regions;
Sumatra, West Java, Central Java, Kalimantan, and the eastern
part of Indonesia.
The partners have three years to build two million new
telephone lines in the five regions, and have the rights to
operate and develop the networks until 2010 under a revenue
sharing scheme.
The five partners are PT Pramindo Ikat Nusantara, which
operates in Sumatra, PT Aria West International in West Java, PT
Mitra Global Telekomunikasi Indonesia in Central Java, PT Cable &
Wireless Mitratel in Kalimantan and PT Bukaka Singtel
International in eastern Indonesia.
However, infrastructure building was halted as
telecommunications equipment became more expensive and the
business no longer profitable during the Asian economic crisis in
1998.
As of March 1999, only 1.4 million lines were successfully set
up.
In 2000, when it seemed that business was to regain momentum,
the KSO scheme became the source of fresh disputes as discontent
surfaced over the continuation of the scheme. (tnt)