Telkom asked to improve its performance further

Telkom asked to improve its performance further

JAKARTA (JP): The state-owned telecommunications provider PT
Telekomunikasi Indonesia (Telkom) must further improve its
performance to cope with fiercer global competition, noted
economist Sjahrir said yesterday.

"I don't mean to frighten you. But there's no guarantee that
Telkom will continue to hold its monopoly for its long-distance
call service after its right expires in the year 2005," he said
at a ceremony to mark the first anniversary of Telkom's initial
public offering.

In 1995, Telkom secured a monopoly for long distance calls
until 2005. Long distance calls are Telkom's largest source of
income.

The government, Sjahrir cautioned, may license another company
to provide a long-distance call service after 2005.

"One of your neighbors, Singtel of Singapore, which is very
efficient but lacking a broad domestic base, is eying the
Indonesian market," Sjahrir said.

He warned Telkom of the impact of a joint venture or another
form of cooperation between Singtel and an Indonesian company
like the strategic link set up recently by British Telecom and
MCI.

British Telecom and MCI of the United States agreed recently
to create a new company called Concert with an expected annual
turnover of more than US$40 billion. The new company will become
a major international challenger to U.S. telecommunications AT&T
-- MCI's main competitor in the U.S.

Sjahrir also warned Telkom to gear itself up for operations in
an era of fast global flows of capital and services: "Now is the
era of tele-economy where the process of production and
consumption becomes increasingly borderless."

Citing an example, Sjahrir said state-owned PT Indosat had
faced competition since AT&T had entered the international call
service market in Indonesia by offering credit card telephone
services.

Telkom president Asman A. Nasution said the company had
launched, early this year, a long-term program to meet its vision
for the next century.

The program, called T-2001, aims to boost Telkom's performance
to become a world-class operator by 2001.

The T-2001 program set 10 major targets, including phone-line
installation in less than three days, a reduction in the rate of
complaints to less than 0.5 complaint per 100 subscribers a month
and increased telephone density from 1.6 percent to 7 percent of
the population.

The company has one employee for every 80 telephone lines,
compared to a ratio of 1:34 in 1991, but aims to increase its
productivity to one person for every 225 lines by 2001.

Telkom floated 19 percent of its 9.33 billion shares on the
New York, London, Jakarta and Surabaya stock exchanges and raised
Rp 2.3 trillion ($981.2 million) from the domestic offering and
$519.1 million from the overseas offering.

The company's initial public offering price was Rp 2,050 at
the Jakarta Stock Exchange. The shares closed at Rp 3,925
yesterday. (icn)