Telkom cuts off 100,000 lines due to unpaid bills

CIPANAS, West Java (JP): Publicly listed domestic telecommunications provider PT Telkom disconnected at least 100,000 telephone lines in recent months because customers failed to pay their bills, the company's president has said.

Asman Akhir Nasution said here Thursday that the disconnections cost the firm at least Rp 2 billion in lost revenue a month.

"If each customer paid Rp 20,000 a month, the disconnections of the telephone lines mean a cut in the monthly revenue by at least Rp 2 billion," he said.

He acknowledged some customers did not pay because their telephone lines were out of service due to damage incurred in the May riots.

He said most of these subscribers lived in Jakarta, which was hardest hit during riots which swept the capital and surrounding towns in May.

"Jakarta accounts for 70 percent of the company revenue while Surabaya is 15 percent," he said, adding that other cities in the country contributed the remainder.

He said some of the company's facilities were also damaged in the riots.

"We need at least Rp 12 billion (US$937,500) in fresh funds to fix the damaged facilities."

Nasution said the company, which is listed on the Jakarta Stock Exchange and New York Stock Exchange, was expected to record a net loss of Rp 600 billion this year due to the collapse of the rupiah against the U.S. dollar and the country's economic downturn.

The rupiah, which hit its lowest level of 17,000 against the American dollar in January this year, hovered around 13,000 last week, compared to its pre-crisis level of 2,500 in July last year.

He said the company's budget allocated for new investments would be cut to Rp 2.1 trillion this year from its previously announced Rp 3.1 trillion to lessen the impact of the economic crisis.

"We have to be more selective with our projects now. We will only go ahead with projects which provide quick yield. Long-term projects should be halted," he said.

But he said company remained committed to marketing at least 1.3 million new fixed lines to the public this year.

Telkom is one of 12 state firms to be put on the government's privatization list to help raise US$1.5 billion in fresh funds to finance the 1998/1999 State Budget.

The government, which still holds a 65 percent stake in the telecommunications firm, plans to further divest its stake in the privatization plan. (43/aly)