Telkom networks in Sumatra privatized

Telkom networks in Sumatra privatized

JAKARTA (JP): State-owned PT Telkom yesterday handed over the
management of its telecommunications networks throughout Sumatra
to PT Pramindo Ikat Nusantara, a joint venture between France
Telecom, the Astra group and two other local partners.

The management transfer was made at a ceremony in the North
Sumatra capital of Medan under a 15-year joint operation contract
signed last October.

Under the contract, Pramindo, which is 59 percent owned by
Astratel Nusantara, a subsidiary of the publicly-listed Astra
International, will manage the 700,000 fixed telephone lines
already installed by Telkom and will install around 540,000 new
lines within the next three years.

Telkom's president Setyanto P. Santosa said that his company
will receive a minimum revenue of Rp 514 billion (US$223.4
million) this year from Pramindo as compensation for the
operation of its existing telephone networks in Sumatra, plus 30
percent of the profit to be made from the operation of the
telecommunications networks.

Setyanto, who handed over the management to Pramindo's
president Mrs. Nuryana Prasetyo at the ceremony, said that the
minimum annual revenue will increase in the following years.

Consortia

Pramindo is one of the five private consortia which have
signed joint operation contracts with Telkom.

PT Bukaka Singtel International, which includes Singapore
Telecom, took over the management of Telkom's telecommunications
networks in the eastern part of the country (Sulawesi, Irian
Jaya, Maluku and Nusa Tenggara) on Jan. 3.

PT Mitra Global Telekomunikasi Indonesia, which also groups
Australia's Telstra, will take over the management of Telkom's
networks in Central Java today, based in Semarang.

PT Aria West International, that also includes West Inc. of
the United States, will begin managing Telkom's networks in West
Java on Jan. 12 and PT Daya Mitra Malindo, which also includes
Telekom of Malaysia, will start operating Telkom's facilities in
Kalimantan later this month.

The contracts require Bukaka Singtel to install 403,000 new
(fixed) telephone lines in its contract area, Mitra Global
400,000 lines, Aria West 500,000 lines and Daya Mitra 237,000
lines.

Until the end of the five contracts, Telkom's operations are
limited only to the greater Jakarta area and East Java.

Telkom, which last year listed its shares on domestic and
overseas stock markets, has estimated that it will receive Rp 15
trillion (US$6.5 billion) in revenue from the five joint
operation contractors within the 15-year contract period.

Setyanto noted that the joint operation agreements, the recent
initial public offering and the restructuring of Telkom are
designed to develop the company as a world class operator in the
year 2001.

Telkom last year 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 ($1 billion) from the domestic
offering and $519.1 million from the overseas offering. (icn)