Telkom urged to take over KSO's assets

Telkom urged to take over KSO's assets

JAKARTA (JP): Most of the joint cooperation scheme (KSO)
partners of state-owned PT Telkom have opted for a buy out of
their assets rather than continuing with the current contract as
originally suggested by the publicly-listed telecommunication
company.

Except for PT Pramindo Ikat Nusantara which opted for a
continuation of the scheme under a joint venture company,
Telkom's four other KSO partners preferred the company take over
their assets, the Director General of Post and Telecommunications
Sasmito Dirdjo said here on Friday.

Sasmito said in a statement that PT AriaWest International
would like to return its assets to Telkom in exchange for
Telkom's stake in cellular service operator PT Satelit Palapa
Indonesia (Satelindo). Telkom owns 23 percent of Satelindo.

Sasmito also said that AriaWest also required Telkom to take
over its debts as well as to pay a certain amount of cash in
return for its telecommunication assets in West Java.

But Telkom only agreed to giving up its stake in Satelindo and
taking over AriaWest's debts, Sasmito said in the statement read
by the Secretary of the Directorate General Agus Pramono at a
media briefing.

"Negotiations are still underway to settle the difference," he
added.

Telkom's KSO partner in Central Java, PT Mitra Global
Telekomunikasi Indonesia (MGTI), meanwhile would like to sell
back its assets based on the investment value.

He said that Telkom basically agreed with the proposal as long
as the investment value was reasonable and the transaction was
done after due diligence.

PT Dayamitra Telekomunikasi would also like to sell back its
assets in Kalimantan to Telkom, but they were still divided over
the value of those assets.

"Negotiations are still going on to narrow the difference",
Sasmito said.

Negotiations were also underway with Telkom's partner in
eastern Indonesia, PT Bukaka SingTel International, over Telkom's
buy out bid, he said.

Sasmito said that in short, all four partners would like
Telkom to buy out their assets in their KSO regions at a profit
without wanting to share the risk.

"While in fact, risk sharing should be included in the KSO
project in the event of a crisis," Sasmito said.

The Minister of Transportation and Communications Agum Gumelar
said that the most important thing was to avoid taking the
dispute to the international level, and that he had asked the
director-general of post and communications to facilitate the
problem.

The government said earlier that it would leave the final
decision to Telkom and partners shareholders.

The government, represented by the Ministry of Finance, owns
66.2 percent of Telkom, while the other 33.8 percent is owned by
the investing public.

World telecommunication giants like France Cable et Radio,
America's AT&T, Britain's Cable & Wireless Plc., Australian
Telstra Global Ltd., Japan's Marubeni Corp., Sumitomo Corp. and
Itochu Corp., Singapore Telecom International Pte. Ltd., and Hong
Kong's TM Communications Limited are currently involved as
shareholders in the five joint venture companies. (tnt)