Telkom to finance AriaWest's operation

JAKARTA (JP): State-owned telecoms company PT Telkom said it would provide operational funds for the West Java and Banten telecommunications regions, managed by PT AriaWest International, for as long as the dispute between the two companies continued.

Telkom's director of operations and marketing Komarudin Sastrakoesoemah said on Friday that Telkom would lend the money to the telecommunications regions so that their day-to-day operations would no longer suffer the impacts of the dispute.

"We will invite the management of the regions, AriaWest and also the government to a meeting (next) Monday to discuss the payment procedures," he told The Jakarta Post.

A protracted dispute between Telkom and AriaWest, which centers on the buyout price of AriaWest's assets and operations by Telkom, has affected the day-to-day telecoms operations in both regions.

Telkom's employees have yet to receive their June salaries from AriaWest and state electricity company PT PLN has yet to receive payment for its power bills due in June.

Earlier, Komarudin said PLN had threatened to stop power supplies to the West Java and Banten telecoms facilities unless Telkom and AriaWest paid the Rp 1.3 billion (about US$115,000) bill by next Wednesday.

Telkom is ready to dole out between Rp 30 billion and Rp 40 billion each month to help the regions meet their basic needs, including paying salaries and power bills, he said.

"We are prepared to do this until the dispute has been resolved or, if worse comes to worst, until a verdict comes from the arbitration panel," Komarudin told the Post.

AriaWest has started arbitration proceedings against Telkom in Paris on charges that the state company failed to respect their joint operation (KSO) contract.

Komarudin said the money Telkom spent to finance the West Java and Banten operations would be discussed once it reached a dispute settlement with AriaWest.

Komarudin asserted the move had nothing to do with the government's plan to appoint an independent management team to take over the telecoms operations in the regions until Telkom and AriaWest settle their dispute.

"This is an alternative that we think is best.

"The government can decide for itself whether or not an independent team is still necessary," he said. (tnt)