Telkom prepares two join ventures

JAKARTA (JP): The state-owned domestic telecommunications operator PT Telekomunikasi Indonesia (Telkom) is negotiating with private firms to set up two joint ventures which will operate in cellular telecommunications services.

"We are still negotiating with PT Centralindo Panca Sakti and PT Rajasa Hazanah Perkasa to set up joint ventures," Telkom's president Setyanto P. Santosa said after hosting a gala dinner here Thursday evening for Telkom's business partners.

Centralindo and Rajasa currently operate cellular mobile telecommunications under a revenue sharing plan with Telkom. Under the plan, private firms are usually required to extend some 30 percent of their revenues to Telkom. However, based on a government regulation and a decree by the Ministry of Tourism, Post and Telecommunications, which were issued in 1993, the revenue sharing plan with Telkom will be abolished.

Centralindo, currently operating the advanced mobile phone system (AMPS-800) in Central and East Java, has some 9,200 subscribers and expects to install 20,000 lines by 2000. Centralindo is jointly owned by the Djatikusomo, the Atmaja and the Pribadi families.

Rajasa, which operates Nordic mobile telephones (NMT-450) in Jakarta and Bandung in West Java, has about 15,000 subscribers. The company, established by the Taher family, is now jointly owned by PT Bina Reksa Perdana (owned by Hutomo Mandala Putra), Bell Atlantic and International Wireless Communications of the United States.

Price

According to Setyanto, joint venture arrangements will give Telkom's partners longer investment plans, which should cause the prices of handsets to go down.

"In an eight-year revenue sharing scheme, for instance, an investor will offer products expensively to gain profits within the limited period. If the investor establishes a joint venture, it will have a longer period to recover its investment. This way they can charge cheaper handset prices," he said, adding that the revenue sharing plans with Rajasa and Centralindo will expire within the next three to four years.

Telkom already has a number joint ventures in the cellular mobile telecommunications business, including PT Satelindo, which runs the Global System for Mobile Communications/GSM (with a stake of 7.5 percent); PT Komselindo, which runs the digital advanced mobile phone service/AMPS (35 percent); PT Telekomindo Prima Bakti, which runs AMPS (10 percent); and PT Telkomsel, which runs GSM (51 percent).

Telkom, which plans to float its shares in London, New York and Jakarta later this year, also has ownerships in several basic telecommunications-related firms, including PT Ratelindo, a radio phone operator (with a stake of 45 percent) and PT Satelit Palapa Nusantara, a recycled-satellite operator (25.5 percent). (icn)