Telkom's workers rally against deal to end monopoly

Telkom's workers rally against deal to end monopoly

The Jakarta Post, Jakarta

Thousands of employees of state telecommunications company PT
Telkom Tbk from Yogyakarta and Central Java rallied here on
Thursday in their strongest protest to date against the deal that
will end Telkom's decades-long monopoly over the country's fixed-
line phone service.

The workers, more than 3,000 in all, arrived in dozens of
buses and cars before gathering at Monas park in Central Jakarta
to protest the planned transfer of Telkom's assets in both
provinces to Indosat, also a state company.

"The government is stubborn -- Telkom's employees as well as
people in Yogyakarta and Central Java have clearly rejected the
sale of Divre IV," Syahrul Akhyar, the head of Telkom's labor
union in both provinces, said.

Divre IV denotes Telkom's operation in both provinces.

Carrying banners with slogans like "Once the other operator
gets in, the Divre IV will turn into a sea of fire!" and "Telkom
yes, other operator no!" the protesters met with Minister of
Communication Agum Gumelar.

Agum said he sympathized with workers' concerns and would
bring them into his discussions with top governmental officials.

The protesters then left for Bandung in the afternoon, where
they planned to hold an even bigger demonstration outside
Telkom's headquarters.

The workers have repeatedly voiced their objections since
April of last year when Telkom and Indosat first announced their
deal to end their cross-ownership in the country's
telecommunications industry.

Indosat is one of two companies licensed by the government to
operate international calls, while Telkom has been holding its
monopoly on the country's fixed line telephone service.

Under the deal, worth US$1.5 billion, Telkom will receive
Indosat's 35 percent interest in the country's biggest cellular
phone operator, PT Telekommunikasi Indonesia (Telkomsel), while
Indosat will take over Telkom's fixed line assets in Yogyakarta
and Central Java.

The government said the deal was aimed at creating two strong
state-owned telecommunications companies in anticipation of the
tough competition that will come once the government liberalizes
the sector in 2003.

The deal will pave the way for Indosat to enter the fixed line
business, which is said to be a good alternative for the company
now facing stiff competition from Internet providers in the
international call sector.

Many, including the protesting Divre IV workers, suspected
that the deal was part of a government strategy to add the value
of Indosat before selling it to foreign investors.

Under the deal, signed in April 2001, Telkom and Indosat set
Jan 31, 2002 as the deadline by which both companies must agree
on all aspects related to the asset transfer.

The deal will be considered void should they fail to reach an
agreement on all aspects of the asset transfer by the deadline.

They also must agree on the transfer of Telkom's employees in
both provinces to Indosat.

With the workers continuing their protests, both could be
unable to reach an agreement on labor matters by the deadline.
This could prevent them from executing the deal.

Several analysts suspect that Telkom's management, which
cannot afford to lose the company's monopoly on fixed line
assets, was behind the demonstration.

Telecommunication analyst Roy Suryo speculated that Telkom's
management was trying to foil the deal so that no outsider, such
as Indosat, could audit its Divre IV operation.

"There is a fear that the audit process will find leaks and
mismanagement in the old company," he said.