Telkom takes over C. Java, Yogyakarta operation
Telkom takes over C. Java, Yogyakarta operation
The Jakarta Post, Jakarta
State-owned telecommunications firm PT Telkom has taken over the rights to build and operate the new fixed lines network for Yogyakarta and Central Java provinces from its joint operating partner PT Mitra Global Telekomunikasi Indonesia (MGTI), a press release stated on Wednesday.
Telkom's president Kristiono said Telkom would take full control of its operation in Yogyakarta and Central Java after the company and MGTI reached an agreement to amend the joint operating contract signed in 1995.
"It is a good start for Telkom employees in managing Telkom operations in Central Java and Yogyakarta. Telkom has the rights to build and operate the new fixed lines network," Kristiono said in the release.
Under the initial contract, MGTI was responsible to build, finance and manage the telecommunications system in the two provinces.
With the change in the contract, Telkom will take over management, supervision, and control of operations in the two provinces until the joint operating contract expires in Dec. 31, 2010. Telkom would assume full responsibility to build and finance new telecommunication facilities in Central Java and Yogyakarta.
Telkom has to pay a monthly payment to MGTI of between US$5.4 million to $6.8 million from 2004 to 2010 which will be taken from Telkom's operating revenue in the two provinces.
MGTI was one of Telkom's five partners in developing fixed lines in several parts of the country under a joint operating scheme launched in the 1990s.
Under the scheme, MGTI would work with Telkom's Central Java and Yogyakarta office to install 730,000 fixed lines in the region.
In return, the company gets a 30 percent share of the revenue for 15 years until 2010.
The cooperation scheme collapsed following the financial crisis which hit the country in 1997. The weakening rupiah made investment in telecommunications infrastructure difficult.
A group of banks led by Singapore's DBS Bank agreed on Tuesday to provide $215 million of a five-year loan facility for MGTI to refinance its existing debt.
In September last year, all MGTI's shareholders, including Telkom's rival state telecommunications firm PT Indonesian Satellite Corp. (Indosat), Widya Duta Infotel, Telstra Global Ltd, NTT Finance and Sumitomo Corporation agreed to sell their entire stake to PT Alberta Telecommunication (Alberta) for a total of $266 million.