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.