NYNEX joins Indonesian cellular venture; largest U.S. investment in Indonesian telecommunications market
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NEW YORK -- NYNEX will acquire 23 percent ownership of Excelcomindo, a joint venture that will bring digital cellular telephone service to 195 million potential customers in Indonesia, the world's fourth most populous nation.
NYNEX said it will be the strategic operating partner in Excelcomindo, providing technical, customer service, marketing and sales management expertise.
Other parties to the joint venture are PT Telekomindo, the major Indonesian shareholder; Mitsui, the Japanese trading firm; Asian Infrastructure Fund (AIF), an Asian investment firm; and several local investors, including Santana
Telekomindo, Yayasan Kartika Eka Paksi, and Yayasan Tridaya. "This investment is consistent with our high-growth strategy in Asia," said Frederic Salerno, NYNEX vice chairman - Finance and Business Development. "NYNEX is already playing a leading role in the region through partnerships and joint ventures building a total of more than 3 million lines in Thailand, the Philippines and Indonesia. "A very low telephone penetration rate coupled with rapid economic-growth have led to a dramatic increase in demand for telecommunications in Indonesia," Salerno added. "Digital cellular service using state-of-the-art engineering and technology is an ideal way to rapidly make telephone service available in densely populated cities." "The government of Indonesia has placed a high priority on the development of telecommunications in our country and has created a high level of competition to bring advanced services to the cellular market," said Peter Sondakh, chairman of the board of PT Telekomindo. "NYNEX has the experience and technology developed in the highly competitive U.S. markets that will be of great benefit to Excelcomindo," Sondakh said. "We are very pleased to have NYNEX as an investor and operating partner in this venture."
Excelcomindo plans to begin offering digital mobile telephone service based on the GSM standard beginning in mid-1996 and to reach large Indonesian cities throughout the country by 1998.
Indonesia, which consists of more than 17,000 islands, is the world's 15th largest nation. It has one of the lowest telephone penetration rates in the world (1.8 telephone lines per 100 people). The government has launched ambitious programs to improve all sectors of the telecommunications infrastructure.
The Indonesian market of some 195 million potential customers is virtually untapped. The current mobile communications market comprises between 100,000 and 150,000 subscribers on four regional analog networks and two recently licensed national GSM networks.
NYNEX's investment in Excelcomindo represents one of the largest foreign investments -- and the largest U.S. investment -- in the Indonesian telecommunications market to date.
Excelcomindo will hold one of three nationwide licenses for GSM cellular service.
The new company represents NYNEX's largest international cellular venture to date. NYNEX's other significant international cellular venture is in Greece, where it is a 20 percent owner with a significant operational role in STET Hellas Telecommunications, which has been providing cellular telephone service since 1993.
PT Telekomindo is a provider of a wide range of telecommunications services, including paging, public telephones and AMPS cellular services in regional and nationwide markets in Indonesia.
PT Santana Telekomindo is a subsidiary of PT Indobuildco, an Indonesian company with wide interests in real estate, oil and hotels.
The Asian Infrastructure Fund is a $1 billion private equity fund formed to invest in entities engaged in the development, ownership or operation of infrastructure facilities in selected countries in Asia.
Yayasan Kartika Eka Paksi and Yayasan Tridaya are retirement foundations for the Indonesian army and the office of the Attorney General respectively.
NYNEX Asia Communications
NYNEX is a major communications provider in Asia, with joint ventures in: o Thailand: TelecomAsia, NYNEX's joint venture with the Charoen Pokphand (CP) Group is constructing and operating a 2.6 million-line telecommunications network -- larger than Manhattan's. A TelecomAsia subsidiary also is providing cable TV services in Bangkok over its fiber backbone network.
o The Philippines: NYNEX and its partners in Bayan Telecommunications
Holdings Corp. hold licenses to provide international long distance services and to install a minimum of 300,000 telephone lines in metropolitan Manila and the Philippines provinces.
o China: NYNEX and the Chinese Ministry of Electronics Industry have agreed
to jointly study the feasibility of interconnecting various existing networks in China.
o Japan: NYNEX is a participant in three TU-KA cellular consortia, providing mobile communications services in three regions of Japan.
o FLAG: NYNEX also is the managing sponsor of FLAG (Fiberoptic Link Around the Globe), a submarine fiberoptic cable project with particular value to Asia.
FLAG will link Japan, China, Hong Kong, India and Thailand with landing points in the Middle East and Europe. NYNEX's co-sponsors in FLAG are from Japan, Thailand, Hong Kong, Saudi Arabia, and the United States.
NYNEX is a global communications and media company that provides a full range of services in the northeastern United States and high-growth markets around the world, including the United Kingdom, Thailand, Gibraltar, Greece, Indonesia, the Philippines, Poland, Slovakia and the Czech Republic.
The Corporation is a leader in the telecommunications, wireless communications, cable television, directory publishing and entertainment and information services.