Telkom privatizes W. Java phone management
Telkom privatizes W. Java phone management
BANDUNG, West Java (JP): State-owned PT Telkom yesterday handed over the management of telecommunications services in West Java to PT Aria West International under a joint operation scheme.
The handing-over ceremony was attended by Telkom president Setyanto P. Santosa and Aria West president John Vondras.
Under the joint operation contract, Aria West will supply 500,000 telephone lines in the province, all of which should be operational by the end of 1999 at the latest. The 15-year contract will end on Dec. 31, 2010.
Setyanto said the additional lines would bring the total number of lines in West Java to 985,896 by the end of 1999.
Presently West Java has a ratio of 1.8 telephones for every 100 people. The new phone lines are expected to increase the ratio to 3.8 phones per 100 people.
Setyanto said that Aria West, which is a joint venture between US West, Asian Infrastructure Fund and local firms PT Artimas Kencana Murni and PT Aria Bahtera Internusa, will invest US$600 million, or $1,200 per telephone line for the 500,000 new lines.
Under the contract, Telkom will receive a minimum revenue of Rp 285 billion (US$124.45 million) a year and an additional 30 percent of after-tax profits during the 15-year contract period.
"Telkom has nothing to lose," Setyanto said.
Last year Telkom signed joint operation contracts with five foreign joint ventures, including Aria West, which will install some two million telephone lines and operate them along with the existing lines. The projects, effective as of this month, are expected to bring Telkom a total revenue of Rp 15.25 trillion (approximately US$6.7 billion) within the next 15 years.
The five projects are part of the government's program to install five million telephone lines within the current Five Year Development Plan which ends in March, 1999.
Three million of the total will be installed in the greater Jakarta area and East Java by Telkom itself.
Director General of Post and Telecommunications Djakaria Purawidjaja said the construction of the new facilities would include the establishment of telecommunication facilities in villages, which would comprise half of the total project.
"By the end of the Sixth Five Year Development Plan 50 percent of Indonesia's villages are expected to have telecommunication facilities," he said.
Other joint ventures which have been started are PT Bukaka Sing Tel (403,000 lines in the country's eastern provinces of Sulawesi, Maluku, Irian Jaya and Nusa Tenggara), PT Pramindo Ikat Nusantara (which will install 516,487 lines in Sumatra) and PT Mitra Global Telekomunikasi Indonesia (400,000 lines in Central Java).
Setyanto said there were still internal problems within PT Daya Mitra Malindo, which has signed the contract to build 237,000 lines in Kalimantan.
He declined to explain details of the problems, but said that Telkom would allow the company time to solve its problems. (pet/pwn)