Telkom finalises buyout of Bukaka SingTel

5 Jul 2006

Indonesian state-owned telecoms operator Telkom is close to finalising the buyout of PT Bukaka SingTel, the last of its joint operating (KSO) partners, according to the Jakarta Post. Telkom president director Arwin Rasyid told the paper that the pair have agreed on the outline details and are waiting for a valuation to decide the final price. ‘After that, we will sign the deal,’ he said.

Bukaka SingTel is the last of five joint operating partners to be bought out. Once completed, Telkom will have recovered all the fixed line services it awarded to private sector firms under joint operating schemes, locally known as KSOs, that were intended to run from 1996 until 2010. Under the terms of the KSO scheme the private operators signed build, operate and transfer deals in which they agreed to expand their fixed line networks in their respective divisions. But the KSO project failed to deliver fully – a fact which has been blamed in part on the economic depression of 1997/98, and on the failure of the private operators to make the investments needed for the plan to succeed. As a result of this, and the low revenue yields Telkom received under the joint operating deals, the incumbent took the decision to buy out the facilities and services of its partners.

The other KSO partners were AriaWest International in West Java and Banten provinces; PT Mitra Global Telekomunikasi Indonesia in Central Java, PT Pramindo Ikat Nusantara in Sumatra, and PT Cable & Wireless Mitratel in Kalimantan. Telkom retained the operation of two divisions, Greater Jakarta and East Java, the most lucrative of the seven divisions.

Indonesia, Telkom Indonesia