Fri, 22 Sep 2000

Telkom blasts AriaWest for suspending line installment

BANDUNG (JP): State owned telecommunications company PT Telkom blasted its partner, American AT&T subsidiary, PT AriaWest International, for suspending the installation of new telephone lines in West Java amid their escalating disagreement.

Telkom's vice president for communications Dodi Amarudin said on Wednesday his company regretted AriaWest's move and called for them to immediately recommence the crucial public service.

"We see this as a major step backwards. Never in Telkom's history have we stopped new line installation for our customers," he told The Jakarta Post.

He said AriaWest's unwise decision had left about 50,000 would-be customers abandoned and had "disgraced Telkom's image with the public."

Dodi was commenting on a letter recently issued by AriaWest, one of Telkom's five foreign partners in the Joint Cooperation Scheme (KSO) projects, instructing officials to suspend any sales and installation of telephone lines for both individual and commercial customers until further notice.

The letter, signed by the newly appointed general manager of KSO region III Michael Lee Towne on Sept. 15., said AriaWest had completed its task to build and sell 290,000 lines as agreed in the contract with Telkom, thus the construction and sales of more lines would have to be approved through a new contract.

AriaWest's chief financial officer Stephen Dowling defended his company's move, saying that the suspension of new telephone line installation "had been there since early this year with Telkom's consent".

"It is not Michael's own decision," he said by phone from Singapore, adding that AriaWest had informed Telkom earlier that new line installation services would be resumed shortly after both companies achieved a clear resolution for their problems and came up with a new work agenda.

Telkom's attack on AriaWest marked a higher level of tension because of the dispute.

Telkom and AriaWest, and the other four foreign partners in the Joint Cooperation Scheme (KSO) projects, have been engaged in heated negotiations since November last year, trying to resolve their disagreement over the way each party managed and operated the lucrative telephone business.

Telkom has been criticizing the partners for their poor performance and inability to cope with the contract requirements.

The partners, on the other hand, are protesting to Telkom for the latter's disturbing and overbearing intervention both in the management and daily operations in the partners' respective working areas.

The five partners entered into business contracts with Telkom in 1996 when the state company appointed and authorized them to finance, build and operate domestic fixed line telephone service separately across the country on behalf of Telkom under a revenue-sharing scheme until 2010.

The five partners are PT Pramindo Ikat Nusantara, which operates in Sumatra, PT AriaWest 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.

The five companies are partly owned by the world's major relecommunication giants. (25/cst)