Telkom offers $400m fixed line project

Telkom offers $400m fixed line project

The Jakarta Post, Jakarta

State-owned telecommunications company PT Telkom is offering
private investors the opportunity to invest in one million fixed-
telephone lines worth a total of US$400 million, a top company
official says.

Telkom vice president for planning and control Djafar Sumantri
told The Jakarta Post Tuesday that the project would be carried
out via BOO (build, operate and own) and BOT (build, operate and
transfer) systems, ending in 2005.

A report earlier said that the one million fixed telephone
lines would be arranged in packages, each worth around US$5
million so that many local investors could participate. Large
foreign investors would be unlikely to participate due to the
relatively small investment package.

The report said that each investor would not be allowed to
make an investment of more than $5 million.

According to the report, some 80 investors could be needed to
develop the fixed line project.

Djafar said that the fixed telephone line project would cover
all parts of the country except Jakarta and Surabaya.

Under the BOT system, PT Telkom would have right to possess
the telecommunication infrastructure after the term of the
contract expired.

While, under the BOO system the fixed lines would remain under
the control of the private investor when the contract ended.

The report said that Telkom would use the BOT system in
profitable areas.

Telkom is under pressure to develop more fixed telephone lines
after previous projects with foreign telecom giants had mostly
turned sour.