Telkom regional office plans strike

Telkom regional office plans strike

The Jakarta Post
Semarang

Employees of state-owned telecommunications firm PT Telkom's
Central Java and Yogyakarta regional offices will strike on
Monday to protest plans to transfer the unit to state-owned
telecommunications company PT Indosat, according to a labor union
chief.

Chief of Telkom Divre IV workers union Syahrul Akhyar said on
Sunday that the strike would continue until the government
formally scrapped the asset transfer plan.

"We apologize to all Telkom customers because we will not be
able to provide optimal service (during the strike)," Syahrul
told The Jakarta Post.

Divre IV covers Telkom's operations in the Yogyakarta and
Central Java provinces.

Telkom and Indosat reached an agreement in May last year to
swap assets in a bid to end their cross-ownership of the
country's telecommunications industry.

Under the plan, Telkom will sell the Divre IV unit to Indosat,
one of two operators licensed by the government to offer
international call services. The deal will pave the way for
Indosat to enter the fixed-line telecommunications business
besides the international phone business where it had been facing
stiff competition from international providers.

Meanwhile, Telkom will acquire Indosat's 35 percent stake in
the country's largest cellular phone provider, PT Telkomsel.

The government hopes the transaction will strengthen the two
state-owned telecommunications companies in anticipation of
strong competition when the telecommunications sector will be
liberalized in 2003.

However, employees of Telkom Divre IV have protested the plan.
Last week, some 3,000 employees staged a peaceful demonstration
in Jakarta to urge the government to abandon the plan.

The massive protests by Telkom workers have raised concerns
that the asset transaction could collapse.

Some analysts believe that both the top management of Telkom
and Indosat were committed to concluding the deal as it would
benefit the two companies, while the management of Telkom Divre
IV rejected the plan due to fears of a reshuffle and an audit
that would reveal past corrupt practices.

Late last year, massive protests by workers of state-owned
cement giant PT Semen Gresik managed to delay the government plan
to sell a controlling stake in the company to Mexico's Cemex SA
de CV.