The upcoming April'98 article in Fortune magazine mentioned,
"A man worried about filling his family's stomachs just isn't going to use his phone,"
Does it mean that people would tend to use Internet phone because of lower rates?
pathfinder.com
April 13, 1998
Indonesia: Life Under the Volcano
Anthony Paul
Reporter Associates: Jeremy Kahn & Lixandra Urresta
With its currency falling and protests rising, this resource-rich
country of 200 million looks as if it's about to erupt. But a lot of
Western companies here are betting that the risks they're running will
yield rich rewards.
Over lunch at the Jakarta Hilton, John Vondras, an affable Coloradan who is US West's top man in Indonesia, ticks off the problems of running a 500,000-line telephone system in a country whose economy is collapsing. First among them: Vondras' joint venture has to repay a $615 million loan in dollars, but it earns revenues in the rupiah. The local currency has lost 75% of its value in the past eight months, which means that even though revenues are up 26% in rupiah terms this year, the company is racking up massive losses in dollars. "In one month," he laments, "you see your net income wiped out before your eyes."
Indonesia's gloom extends far beyond the balance sheet of PT Ariawest
International, US West's joint venture with Indonesia's state-owned
telecom company. Social unrest is growing. At least five people have
died in riots largely directed by the 90%-Malay majority at ethnic
Chinese shopkeepers. Food prices are up fourfold since December and
still rising. So the easy way out of Vondras' rupiah bind--raising phone rates--can't even be contemplated. "A man worried about filling his family's stomachs just isn't going to use his phone," he says. |
