Minister Dahlan Optimistic on Telkomsel Bankruptcy Appeal
State Enterprises Minister Dahlan Iskan is confident that state-controlled telecommunications firm Telekomunikasi Indonesia can settle a legal dispute between its mobile phone subsidiary Telkomsel and a former partner that has sought to have Telkomsel legally declared bankrupt.
“Telkom can appeal to a higher court. Telkom is a big company that has qualified lawyers who are able to settle its legal problems,” Dahlan said on Sunday, referring to Telekomunikasi Indonesia by its abbreviated name.
Telkomsel management said last week that it would appeal a bankruptcy ruling issued by the Central Jakarta Commercial Court following a lawsuit initiated by former partner Prima Jaya Informatika, a distributor of mobile phone top-up vouchers and SIM cards.
Prima Jaya has accused the mobile phone operator of having failed to fulfill its contractual obligations and sought a declaration of bankruptcy against Telkomsel.
Dahlan said he had been apprised of the conflict by members of Telkom’s board of directors. “I have been informed of the matter but because this is a corporate matter, I do not want to interfere and it should be settled through legal corporate means.”
Telkomsel and Prima Jaya established a partnership on June 1, 2011, for a period through June 2013, in which Telkomsel agreed to provide vouchers and SIM cards with a special sports theme to Prima Jaya. But in June of this year, a dispute arose when Telkomsel terminated the contract because it claimed Prima Jaya had failed to meet agreed-upon conditions.
Prima Jaya countered by filing a bankruptcy lawsuit against Telkomsel, estimating a total loss of Rp 200 billion ($21 million) due to the contract’s termination.
Dahlan said he had asked why Telkomsel’s management ended the partnership.
“They [members of the board of directors] said the contract clearly disadvantaged Telkomsel so that it should be stopped,” the minister said.
The minister, who is the founder of media company Jawa Pos, supported the decision and went further, saying all contracts that were disadvantageous to any state-owned company should be terminated.
“We cannot tolerate problematic contracts. Disadvantageous contracts hamper the development of state-owned companies,” he said.
Meanwhile, a Telkomsel senior executive said last week it was eyeing 1 million new subscribers from among the members of the National Farmers and Fisherman Cooperative (Inkoptan).
The head of Telkomsel’s community management division, Herry Setiawan, said Inkoptan, with its 21 million members nationwide, offered a major potential market.
Telkom will offer its e-payment service, T-Cash, with lower tariffs and free phone calls for 30 days between Inkoptan members.
T-Cash is an electronic payment system allowing customers to make transactions ranging in value from Rp 100,000 ($10.50) to Rp 5 million using their cell phones.
Herry said Telkomsel already had similar cooperative agreements with other community associations including religious, professional and lifestyle groups.
Telkomsel already has 10 million subscribers from among those other community groups, he added.