Hi,
Would someone care to add some insightful comments to the following
news item on ITT's future operation?
Monday June 8, 4:32 am Eastern Time
Telkom seen hurting after KSO deals change
By Moris Morissan
JAKARTA, June 8 (Reuters) - Indonesian state-controlled telecoms giant
PT Telekomunikasi Indonesia (Telkom) (TLKM.JK) faces further problems
this year from the revision of contracts with its partners, analysts
said on Monday.
They said the company will face a difficult year amid Indonesia's
worsening economic plight and after a net loss of 398.88 billion
rupiah ($36.26 million) in the first quarter due to huge foreign
exchange losses.
Telkom announced last week it had revised agreements with its partners
in joint operating schemes, known as KSO agreements, to help their
financial position during the economic crisis.
The most important elements in the revision for Telkom's performance
are drastic changes in Minimum Telkom Revenue (MTR) and Distributable
Telkom Revenue (DTR) that the partners pay Telkom.
MTR is a fixed contribution that KSO companies pay each month based on
an annual calculation, while DTR is a monthly payment based on KSO
partners' revenues.
In 1997, Telkom's partners paid MTR of some 1.421 trillion rupiah and
DTR of 210 billion to Telkom. The old contract stipulated that the MTR
would grow 3.5 percent per year while KSO partners should also
contribute some 30 percent of their revenue.
But Telkom said the new revision changed the MTR's annual growth to
less than one percent in 1998 and less than 1.5 percent in 1999, while
the DTR was cut to 10 percent of revenue.
''There will definitely be downgrades on the back of this,'' said
David Ferguson from GK Goh Securities.''The MTR and DTR payments come
net of costs and go straight to the operating line so any fall in the
MTR or DTR payments are going to directly affect operating profits and
move straight down to the bottom line,'' Ferguson said.
Hardiyanto Gosalim, analyst at Trimegah Securities, said he estimated
the DTR cut would cost Telkom 140 billion rupiah this year.
But Ferguson said things could have been worse for Telkom. ''Basically
you're looking at two percent of the MTR payments not being there. So
it's going to be bad, although I was looking at scenarios that would
have been a lot worse,'' Ferguson said.
The MTR payment could have been paid at the end of each year, as
opposed to on a monthly basis, which would have been much worse for
Telkom because they would have been without cash for much longer
periods, he said.
Another aspect of the contract revision was a cut in the minimum
number of new telephone lines to be installed by Telkom's KSO partners
by March 1999 to 1.268 million from two million.
Under the revenue-sharing agreements, signed in late 1996, Telkom's
KSO partners were required to finance, construct and operate for and
on behalf of the state-owned company in five regions of the country.
The five KSO partners include PT Pramindo Ikat managing the Sumatra
region, Aria West International for West Java, Mitra Global
Telekomunikasi Indonesia (MGTI) for Central Java, Daya Mitra Malindo
for Kalimantan and Bukaka Singtel for the east Indonesia region.
pcyh
pronet.com.tw |
