Sat, 25 Sep 1999

Telkom eyes cell phone services

BANDUNG (JP): State telecommunications company PT Telkom is considering a plan to enter the mobile telecommunications sector, vice president and coordinator for new business development at the state firm Garuda Sugardo announced on Friday.

Garuda said entering the cellular business would boost the company's image and corporate value.

He said Telkom, which currently owns a majority stake in the country's cellular telephone operators, was currently assessing the feasibility of directly running a cellular telephone business.

"If it is feasible, I will recommend Telkom enter the cellular business in Jakarta and Surabaya," he said, adding that the results of the study were expected in the near future.

He projected that Telkom would need to spend at least US$400 million to establish one base transceiver station to support cellular services using the global system for mobile (GSM) telecommunications system.

He said Telkom should not establish a new subsidiary to run the cellular business, but instead put the new division directly under its command. He added that the state telecommunications monopoly currently had too many subsidiaries.

Telkom holds a 25 percent stake in PT Mobisel, 35 percent in PT Komselindo and 20.1 percent in PT Metrosel, 42.7 percent in PT Telkomsel, 22.5 percent in PT Satelindo. Telkom also has an interest in PT Excelcomindo through its subsidiary PT Telekomindo, which controls 60 percent of Excelcomindo.

Telkom also set up in 1997 two joint ventures: PT Selnet Nasional Indonesia (Selnas) and PT Indomedia Telephone Cellular National (Indophone). The two companies have received licenses to enter the cellular telephone service market, but have yet to realize their plan.

Selnas is 10 percent owned by Telkom and 90 percent owned by PT Cellnet Nusantara, a private firm controlled by businessman Sudwikatmono -- one of former president Soeharto's close relatives -- and his youngest daughter Siti Hutami Endang Adiningsih.

Telkom has a 35 percent share in Indophone, which is 65 percent controlled by PT Nusantara Ampera Bakti (Nusamba). Nusamba's shareholders include timber tycoon Mohamad "Bob" Hasan, who is also the company's president commissioner.

The two companies, along with at least nine other companies, have received licenses to run cellular telephone services under the Digital Cordless System (DCS-1800) system.

None of the companies, however, have started their operations.

Telkom announced on Friday that it had increased its stake in its subsidiary PT Infomedia Nusantara to 51 percent, worth Rp 12.75 billion.

Telkom previously controlled only 35.8 percent of the stake in Infomedia, the publisher of telephone directory books. (43/cst)