Telkom cuts off 100,000 lines due to unpaid bills

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)