Telkom project to proceed despite Satelindo pullout

Telkom project to proceed despite Satelindo pullout

JAKARTA (JP): State-owned domestic telecommunications provider
Telkom will continue its 36-transponder satellite project despite
the withdrawal of its partner, PT Satelindo.

Telkom's president, Asman A. Nasution, said yesterday
Satelindo's pullout would not affect the satellite's launch
schedule.

The satellite will replace Telkom's Palapa-B2R satellite which
has a normal operational life which ends in April next year.

"Telkom will face problems if it does not prepare a new
satellite. In addition, we have also promised this new satellite
before listing our shares," he said.

He said the new Telkom-1 satellite was scheduled for launch in
late 1998.

"We are still interested in a joint satellite project with
Satelindo," Nasution said.

The minister of tourism, post and telecommunications, Joop
Ave, said yesterday that the government had approved Telkom to
continue the satellite project alone and would allow the company
to lease out part of the satellite transponders.

Satelindo executives refused to comment on the company's
pullout from the project.

Sources said it was Telkom which quit the alliance and asked
the government for approval to carry out the project alone.

"Telkom should have the chance to run its own satellite as it
is important for the domestic telecommunications network that it
keeps its services. Telkom has also the chance to lease part of
the transponders if there is any remainder," Joop said.

Telkom is Indonesia's first communications satellite system
operator since Indonesia entered the satellite business in 1976.
The company has two operating satellites in orbit, the Palapa-B2R
and the Palapa-B4, which have normal operational lives due to end
in April 1998 and May 2001.

Telkom and Satelindo had planned to develop a joint multi-
million dollar satellite project to offer 60 transponders.

Satelindo operates two satellites, the Palapa-C1 and Palapa-
C2, Indonesia's third generation of the satellite system.

Telkom and Satelindo competed with each other in the satellite
business until 1993 when Satelindo was licensed -- without any
open bid -- to run the satellite service.

Satelindo then took over Telkom's commercial satellite
business.

Satelindo which runs cellular phone and international call
services is controlled by PT Bimagraha Telekomindo -- a joint
venture between President Soeharto's son Bambang Tirahatmodjo's
Bimantara Group and the Artha Graha Group, owned by businessman
Tomy Winata who has close links to the Armed Forces.

The other shareholders are Germany's DeTeMobil, Telkom and PT
Indosat.

Telkom has appointed U.S. firm Lockheed Martin to make the
36-transponder satellite. The broken alliance between Satelindo
and Telkom invited four other satellite makers to bid for the
project. They were Hughes Space and Communications Company, Loral
Corporation, Matra Marconi and Aerospatiale to bid for the
project. (icn)