Bimantara divests Trans Javagas Pipeline

PT Bimantara Citra Tbk has divested all its shares in PT Trans Javagas Pipeline (TJP) to PT Kapital Usaha Sempurna, an unknown entity at undisclosed price.

TJP was established by Bimantara (49%), Tranaco Utama (28%), Adhiraksa Tama (5%), Pertamina Saving & Investment (10%), Bank Mandiri Pension Fund (3%), and PLN Pension Fund (5%).
TJP built the controversial 430 km gas pipeline in 1992 with USD440 million investment as a BOT project. Under the contract with Pertamina, the pipeline should be transfered to Pertamina by 2014.

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Public Offerings: Mobile-8 & CP Prima

Cellular operator PT Mobile-8, a subsidiary of PT Bimantara Citra Tbk, launched the initial public offering (IPO) of 3.9 billion shares (19.9% of outstanding) at Jakarta Stock Exchange (JSX) to finance expansions and working capital.

According to the company's prospectus published today, Mobile-8 booked net loss of Rp26.5 billion in the first half. Two weeks ago, Lehman Brothers signed US$70 million loan (Libor + 6%) to Mobile-8.
Funds from Lehman + IPO would finance the company's ambitious plan to boost cellular subscribers from 2.2 million to 7 million by the year 2008.
Meanwhile, CP Prima has decided to resume the IPO. In second quarter, CP Prima announced its plan to offer 6.5 billion ordinary shares, among others, to pay debt at Barclays Bank and business expansion. But according to its new prospectus today, CP Prima offers only 3 billion ordinary shares (equals to 16.8% outstanding shares). But CP Prima also offers 6 billion warrants that would potentially make public control 45% shares after exercises of the warrants.

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Lehman's US$70 million loan to Mobile-8

Lehman Brothers agree to disburse US$70 million loan (LIBOR +6) to PT Mobile-8 Telecom, a subsidiary of PT Bimantara Citra Tbk. Mobile-8 would use most of the funds to expand cellular telecommunication facilities, Antara reported.

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Conglomerates, New Publishers

I got the info today that a conglomerate engaged in oil & gas business is preparing the publication of newspaper to be named The Point. It's going to be the first English business paper in the country. The new publisher is currently under spotlight for an environmental disaster that forced more than 10,000 people left their home.

Few months ago, Jurnal Nasional started its publication. This newspaper is reportedly owned by a group of businessmen considered as the loyal supporters of president Susilo Bambang Yudhoyono's administration.
Earlier than Jurnal Nasional, a newspaper named The President has also been published by a group with industrial estate as its main business.
PT Media Nusantara Citra, a subsidiary of PT Bimantara Citra Tbk led by tycoon Harry Tanoesoedibjo, started the publication of Seputar Indonesia (Sindo) more than a year ago.

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Harry Tanoe tighten his grip on Bimantara

Harry Tanoesoedibjo has tighten his grop on PT Bimantara Citra Tbk with new shares bought to make his PT Bhakti Investama Tbk ownership at 42.2%, almost double the initial size of 24.97% when it entered the company in 2002. This week, Bhakti bought another 20 million shares of Bimantara at Rp1,300/share. Harry was considered a proxy to Mr Bambang Trihatmodjo, the former controlling owner. Bambang ownership at Bimantara has decreased from 22% to 13.08% accordingly.

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H1 2006 performance of listed companies

Indonesian listed companies reported mix results in their first half 2006 performance with majority of companies reported lower net profit on poor margin.


Sampoerna, sales +29.4%, profit +20.8%
Gudang Garam, sales +2.8%, profit –49%
BAT Indonesia, sales –4%, loss Rp16bn against profit Rp22bn

Unilever, sales +13%, profit +8.9%
SMART, sales +13%, profit +2,550%
Cahaya Kalbar, sales +193%, loss –97%
PT Perkebunan Nusantara III, sales +16.7%, profit +8.3%

Tunas Baru Lampung, sales –19%, profit +1,172
Budi Acid Jaya, sales +8.4%, profit +73.9%
Suba Indah, sales –90%, loss –90%

Bimantara, sales +22%, profit +2,550%
RCTI, sales +4.9%, profit +4%

Adhi Karya, sales +40.5%, profit –87%
Tigaraksa Satria, sales +14.5%, profit +185%

Astra International, sales –13%, profit –38%
Astra Otoparts, sales –20.4%, profit –28.9%
Astra Graphia, sales +14%, profit +50%
Prima Alloy, sales +17.8%, profit –81%

Semen Gresik, sales +24.9%, profit +106%
Kalbe Farma, sales +3.1%, profit +27%
Enseval, sales +2.4%, profit –6%
Excelcomindo, sales +48.5%, profit Rp358bn (against loss of Rp52bn)
Samudera Indonesia, sales +4%, profit –80%

Medco Energi, sales +26.5%, profit +17%
Bukit Asam, sales +10%, profit –9%
United Tractors, sales +16%, profit –3.4%

Gajah Tunggal, sales +14%, profit -38%
Tri Polyta, sales +15%, profit Rp92bn (against loss of Rp367bn)
Berlian Laju Tanker, sales +22.5%, profit +49.4%
INCO, sales +1.4%, profit -16.9%
AQUA, sales +1.6%, profit +6%

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Deutsche refinance Mobile-8

Deutsche Bank is reportedly refinance debts of Bimantara Group's telecommunication subsidiary PT Mobile-8 Telecom.

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ANTV acquires LaTV, TransTV buy TV7

In the latest move of broadcasting moguls, ANTV (partly owned by Ruppert Murdoch, controlled by Bakrie family) is reportedly acquiring majority stakes of debt-ridden LaTV (owned by Abdul Latief, former minister under Soeharto regime).

Meanwhile, Koran Tempo reported last week that TransTV (owned by Chairul Tanjung, Para Group) was in talk with TV7 owner Jacob Oetama (controlling shareholder of Kompas, the largest newspaper in Indonesia) for a possible acquisition.
If all these plans will materialize, Indonesia's TV industry will be more concentrated in several hands. Bimantara Citra (partly owned by Soeharto-linked families and groups) is currently own three TV stations (RCTI, TPI & Global TV).
Other TV stations are owned by Surya Paloh (Metro TV, Media Indonesia group), Mahaka (JakTV), some groups inc Soeharto family (SCTV) and Salim (Indosiar).

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Bimantara's profit less than RCTI, drop 31%

Holding company PT Bimantara Citra Tbk, once the flagship of Soeharto family business, booked net profit of Rp135.99 billion last year, smaller than one of its subsidiaries RCTI (TV station) at around Rp146 billion.

The company's 2005 profit also decreased significantly by 31% from Rp199 billion in 2004, but it booked operating profit of Rp119 billion against operating loss of Rp94 billion in 2004.

Bimantara controls majority shares in three TV stations (RCTI, TPI, and Global TV) and some printed publication (Seputar Indonesia, Genie tabloid, and Trust magazine).
But the company is struggling with telecommunication business. Last year Bimantara planned to divest all shareholdings in Mobile-8 cellular operator. Sinar Mas Group reportedly had interest in acquiring Mobile-8 but later on pulled out. Recently Bimantara has been trying to sell some shares through initial public offering (IPO).
According to its financial report published this morning, Bimantara recorded total revenue of Rp2.276 trillion, increased significantly from Rp1.845 trillion in 2004. Bimantara has total asset of Rp7.42 trillion as of December 2005.
Bimantara has three core businesses: Media & Broadcasting, Transportation & Logistics, and Telecommunications. Meanwhile, subsidiary companies beyond the three core business lines were placed in Investments Portfolio.

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Opposition to Astro Network heats up

State minister for communication and information Sofyan Djalil has the bussiest days in office in the last few months dealing with public pressures. First on the massive protest on the plan to publish Indonesian edition of Playboy. And then the implementation of new regulations on airwaves and broadcasting which are considered threatening the press freedom.
In the last few days, the ministry have to deal with the pressure to close down the broadcasting license of Global TV, a network previously owned by an Islamic organization for educational purpose but later on sold to PT Bimantara Citra Tbk with completely different programs, mainly entertainments.
Almost at the same time, pressure mounts on direct to home (DTH) service of Astro All Asia Network Plc subsidiary. Today, deputy coordinator for working group on information and communication at The House (DPR) Commission I Dedy Djamaluddin Malik urge government to put on hold Astro's services until the company abide the Broadcasting Law and the regulation on communication satellite.
DPR is scheduled to summon the minister for communication, Astro management, and former director general for post and telecommunication Djamhari Sirat.
DPR believes there are two pending issues that should be settled before the Malaysian giant start to deliver services to Indonesian customers.
First on the regulation foreign ownership in broadcasting which set the limits of maximum 20% foreign shares. Astro All Asia Networks Plc and Lippo Group of Indonesia entered into a joint venture company to provide multi-channel satellite pay-TV and multimedia services in Indonesia in March 2005.
The joint-venture company, PT Astro Nusantara, have an initial paid-up capital of US$30 million, of which ASTRO hold an effective 51% share with the balance held by PT Broadband Multimedia Tbk of the Lippo Group. ASTRO also provides shareholder loans of US$35 million repayable on the third and fourth anniversary of the loan drawdown.
Peak funding is estimated at US$200 million after four years of operations and the additional funding of US$135 milion is expected to be raised through a combination of third party loans, and equity and quasi-equity instruments.
"Astro holds 51% in Direct Vision. This is a violation to the Broadcasting Law No. 32/2002," Malik said.
ASTRO listed on Bursa Malaysia in October 2003. Major shareholders of the Group include the Usaha Tegas Group (42.7%) and Khazanah Nasional Berhad (21.6%), the investment arm of the Malaysian Government.
Second, the issue of landing rights. Parliament believes Astro violates the regulation on landing rights as no reciprocal agrement between Malaysia and Indonesia on satellite communication services.
Whatever the verdict will be, Indonesia as the most populous country in South East Asia clearly a potential market. With only 1% of its population subscribes pay TV services, Indonesia indeed one of the most attractive market for companies like Astro.

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Bimantara takeover, how serious?

UBS is seeking to help finance the takeover of two Indonesian companies, PT Bimantara Citra Tbk, the conglomerate which owns four major television channels in Indonesia, and toll-road operator PT Citra Marga Nusaphala (CMNP) Tbk, according to individuals in Indonesia familiar with the transaction.

Global Crown Capital, a special purpose vehicle, owned by the Salim family, Peter Gontha (former shareholder and executive at Bimantara), and Indra Rukumana (former President Suharto’s son-in-law) is seeking to acquire controlling stakes in Bimantara and CMNP. In order to obtain the funding, the three parties have pledged shares they have in Bimantara and CMNP to UBS in order to obtain a loan of up to US$350m, said individuals in Indonesia.

Few details were available about the goings on, but Bimantara last week issued a denial stating that the conglomerate had not been approached by GCC to acquire the assets. Salim also denied the plan to acquire Bimantara and CMNP.

But Bimantara wrote to Jakarta Stock Exchange (JSX) authority on Friday that recently it recieved a proposal from one of its shareholders (Almington Assets Limited) which represents 5% shares of the company that it want to pledge the held shares to UBS AG Singapore Branch.

JSX suspended the trading of both Bimantara and CMNP shares on Friday. No information so far on when JSX will lift the suspension.

Individuals in Jakarta said there were definite signs that the consortium had already obtained funding from UBS in their attempt to take over the assets. Investor Daily on claimed on Friday that it got a document showing the financial support from UBS Bank to GCG to acquire Bimantara and CMNP. In exchange GCC will pledge to UBS some marketable securities, cash, and shares of Bimantara and CMNP. Under the loan proposal to UBS, GCC needs funding of US$250 million to US$350 million.

According to the document, before it acquires Bimantara and CMNP, GCC would takeover shares of PT Televisi Pendidikan Indonesia (TPI, a TV station under Bimantara) and CMNP Manila (toll road operator in Manila).Under the loan proposal to UBS, GCC needs funding of US$250 million to US$350 million.

Meanwhile, IFR Asia reported an official who acts as custodian of shares traded on the Jakarta Stock Exchange said UBS has recently requested that a large shareholding of Bimantara shares be blocked under the Swiss bank’s name.

“If that’s so, then that’s a sign that the GCC conglomerate has already pledged shares to UBS,” said one banker in Indonesia.

Investor Daily reported today that Almington Assets had pledged its 11% shares through GCC to UBS AG with the address at Temasek Boulevard 18-00 Suntec Tower Five, Singapore. GCC also planned to acquire 14% shares of CMNP owned by Heffernan International Limited, Delta Equity Assets Ltd, and Commonshare Investment Ltd, all are special purpose vehicle companies registered in British Virgin Island.

Another banker said to AFR Asia: “UBS private banking has been shopping the local market to finance the rupiah-denominated portion of the deal. One of the parties approached was Sinar Mas Securities, so we know something big is going on.”

The battle for the Bimantara assets will be a lively one, said investment bankers in Indonesia, given that Bhakti Investama, another Indonesia company, now holds a stake of around 40% in Bimantara and 10% indirectly.

“It therefore will be very difficult for GCC to gain a controlling stake in Bimantara,” said an investment banker to AFR Asia.

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Salim denies acquisition plan on Bimantara & CMNP

Salim Group strongly denied reports that it has intention to acquire two listed companies PT Bimantara Citra Tbk and PT Citra Marga Nusaphala (CMNP) Tbk.
In a letter to Jakarta Stock Exchange (JSX) authority today, Philip Phiong, executive of Salim Group, stated the group neither has the plan to do such acquisition.
Today Investor Daily stunned the market with its report that Salim Group will acquire Bimantara and CMNP through a company named Global Crown Capital with the financial support from UBS. The newspaper quoted Bimantara executive who confirmed the plan. JSX quickly suspended the trading of both Bimantara and CMNP shares in the early hours to prevent speculation and manipulation.
Bimantara wrote to JSX yesterday afternoon that it heard the information about certain parties which plan to acquire the company but it had not received formal documentation or reliable information.
But Bimantara notified JSX in the letter that recently it recieved a proposal from one of its shareholders (Almington Assets Limited) which represents 5% shares of the company that it want to pledge the held shares to UBS AG Singapore Branch.
Meanwhile CMNP simply said to JSX that it hadn't receive any formal proposal from certain parties which plan to acquire the company.

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Press Day: Who'll pay decent journalism?

I believe press celebrities and media barons are listening President Susilo Bambang Yudhoyono's speech in Bandung, West Java while I'm writing this piece of 'speech'. I have nothing to congratulate except a question: Who'll pay decent journalism in Indonesia?
Let me take this Press Day opportunity to share little bit of my experience working for Indonesian media.
Well, I survived different press regimes in my only 14 years carreer in journalism. Under Soeharto, I got several legal notices from crony capitalists. "If you play hard, we could be harder. Be nice," one of those cronies once threatened.
I got no such notices during Abdurrahman Wahid. In 2002, I got one legal notice from a respected lawyer of one of the biggest debtors of Indonesia Bank Restructuring Agency (IBRA). The next year, I also got one legal notice from a tycoon who has a lot of investment in China and one of biggest debtors at IBRA as well.
My one-year sabatical leave in UC Berkeley was peaceful, no such notices. But few months ago, one of readers of this humble blog sent a complaint letter to my company (which is nothing to do with this blog) and the Press Council. So far, none of those legal notices ended up in court, surprisingly, even though most of them threatened to do so.
Still, I'm not sure of whether I had done something good for the readers or not. I believe, however, press freedom has given Indonesian journalists the chance to deliver good journalism. Competition is stiff and it is good. Indonesian journalism, as elsewhere, has to deal with reality, both as a business and an essential element in the democratic mozaic.
The much-ballyhooed citizens' or community journalism movement also flourished in Indonesia despite its limited potential in delivering good and serious journalism. From my experience, serious journalism such as investigative reporting is labor-intensive and time-consuming and therefore requires large amounts of money and health benefits and pensions.
With 180 newspapers published (jumped from 80 during Soeharto years) with hundreds of thousands copies the most, 60% of them even less than 10 thousands copies with well below average salary (mostly less than US$200 per month, still above the average per capita income though), only few are really economically viable. Even big names such as Tempo, Republika, or Jawa Pos are struggling financially.
Look at the contents. Almost 80% of their contents are all the same stories based on press releases, press statements, sports result, public hearings, court hearings, verdicts, etc. Why they publish different newspapers if the stories are all the same? If money is the problem for good journalism, why don't they merge?
Some publishers are die-hard to defend their ownerships even though they can't pay journalists well or silently approved the stories-for-money practices or simply use their media network for political or business deals.

Counter-Paid-Opinion

In recent months, more and more government institutions, including state-owned enterprises which deployed third party to counter public criticism through their paid-up articles under the title of advertorial (guess an abbreviation of advertising and editorial).
State-owned enterprises minister applied that for criticism on poor efficiency of SOEs, PLN on mark-up of power plant projects, and education minister of tuition subsidy. More and more ministers also published ads on their performances as well.
Sometimes, even in the respected publication such as Tempo, we could find a report from journalists (investigative ones) published side-by-side with such advetorials (off course in contrast to the journalist report) on the same issue. So be aware of the reminders at the end of such articles to differentiate which one is a journalism product.
Op-eds have become a huge business involving deals between analysts, experts or observers with businessmen, lawyers, or politicians or government officers in collaboration with media barons or editors. That's why we have to be careful in reading statements appeared in the media.

Tycoons into media
So far, like in other countries, media industry in Indonesia is owned by different types of investors. Kompas daily, for example, is controlled by Jakob Oetama, a highly respected journalist, through Kompas Gramedia Group. Tempo, listed at Jakarta Stock Exchange, is controlled by respected journalists like Goenawan Mohammad, Fikri Jufri, and Bambang Harymurti.
Jawa Pos Network is controlled by Dahlan Iskan, a former Tempo journalist. Media Group (Media Indonesia and MetroTV, among others) is owned by Surya Paloh, the chairman of patron board of Golkar Party. Golkar also owns Suara Karya. Former assembly speaker and minister during Soeharto years, Harmoko, controls Pos Kota Group.
Alwi Hamu, VP Jusuf Kalla's special staff, co-owns Fajar Media Group, the largest media network in eastern part of Indonesia, with Jawa Pos and Kalla family as partners.
My newspaper, Bisnis Indonesia, is owned by several businessmen (Sukamdani Sahid who owns Sahid Hotel chain, Ciputra the property tycoon, the late Eric Samola who also co-found Jawa Pos Group and Tempo, Subronto Laras who is executive at car manufacturer Suzuki, and the staffs who holds the majority shares).
Bakrie Family once owned some newspapers but have been closed down. The family, meanwhile, still controls ANTV. In the last few years, Sjamsul Nursalim acquired several newspapers including Sinar Harapan & Indonesia Shang Bao, while Lippo Group acquired Investor Indonesia (Daily and Magazine) and Suara Pembaruan.
Bimantara under Harry Tanoesoedibjo (an investment banker) also publish Seputar Indonesia and acquired Trust magazine on top of three TV stations (RCTI, TPI, and Global TV). Mahaka Group controls Republika.
We have also retail tycoon Abdul Latief with LaTV and Para Group (property and banking business) at TransTV.

Internationalization
We knew already that Mr Rupert Murdoch acquired 20% shares of ANTV, a network owned by Bakrie Family. Murdoch might also acquire 20% shares in TV7, a network owned by Kompas Gramedia Group. Malaysia's TV3 might soon become the new owner of the ailing LaTV.
We heard also the possible cooperation between Kompas and Murdoch in transforming economic tabloid Kontan into an economic daily that hit the newsstands next month. Lippo Group is reportedly had invited South China Morning Post as partner in Investor Daily and Suara Pembaruan. Mahaka Group, the majority owner of Republika, had also signed alliances with The New York Times and The Strait Times (Singapore).
Beyond The Media
Other critical issue is the influx of media barons into non-media business and use their media network to maneuver. Surya Paloh, the owner of Media Group (Media Indonesia and MetroTV), for example, is venturing in Cepu oil business with Bojonegoro Admnistration. Dahlan Iskan from Jawa Pos Group is also involved in Cepu dispute with his venture with East Java Administration.
Kompas Gramedia Group has been invited by Jakarta Governor to invest in toll road projects.

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Sinar Mas to acquire Mobile-8 from Bimantara

Sinar Mas Group, a company owned by Indonesian Wijaya Family, is in negotiation with PT Bimantara Citra Tbk to acquire cellular operator Mobile-8.
Sinar Mas plans to merge Mobile-8 with its own cellular company PT Wireless Indonesia (Win). The recent development would scrap Bimantara's plan to offer Mobile-8 shares to public investors. Bimantara owned 76% shares of Mobile-8.

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Soeharto's Favorite: Who Wants to Be A Millionaire

This is not a joke. Former president Soeharto's favorite TV show is Who Wants to Be A Millionaire hosted by Tantowi Yahya every Saturday night in RCTI, the TV station owned by his son Bambang Trihatmodjo through PT Bimantara Citra Tbk

As reported by Detik.com few hours ago, it was his grandaughter Gendis Siti Hatmanti (23), daughter of Bambang, who disclosed Soeharto's relaxing habit. Gendis said she often accompanied Soeharto to watch the show. Asked whether she ever discussed with grandfather about people's misseries and difficulties following the step increase in fuel price, Gendis said no political discussion. "We're just watching TV," she said.

As wrote by Detik.com, the fact about Soeharto's daily activities would raise the question on court's reluctance to move on with Soeharto's trial on the basis of his frailing health. Early this month, Soeharto paid a homage to his wife's grave in Solo, Central Java.

In opposite with Soeharto who enjoy the quiz not for the money (a billionaire already), our incumbent president Susilo Bambang Yudhoyono's favorite is watching TV drama series titled Kiamat Sudah Dekat meaning The End of The World is Near.

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Indonesia cut Hutchison’s 3G

Indonesia government had asked PT Cyber Access Communications, a subsidiary of Hong Kong based Hutchison Communications Limited, to return 5 Mega Hertz out of its 15 MHz 3G license.
Basuki Yusuf Iskandar, director general for telecommunication at the ministry of information and communication, said he expects Cyber Access to return the 5 MHz this week saying the 15 MHz license is just too big for the company and would only put the company in trouble as it should pay bigger bandwith usage cost.
Cyber Access is one of two operator awarded 3G license last year with PT Natrindo Telepon Seluler (NTS).
Cyber Access has two licenses. One on 2G with 10 MHz and one on 3G with 15 MHz. This company was controlled by Charoen Pokphand Group Indonesia. In March 2005, Hutchison Telecom entered into an agreement to acquire 60% stake in Cyber Acess with cash consideration of US$120 million. CP Group Indonesia owns the remaining 40% shares. Both companies claimed to invest US$300 million to develop 3G services in Indonesia scheduled for commercial operation early next year.
Last year, government warned Cyber Access that it could lose its 3G mobille license if it failes to deploy the infrastructure immediately.
The company is required to develop 939 base stations by 2005, 1,557 base stations by 2006 and 2,018 base stations by 2007. But CAC shows no signs that it would fulfil the 939 base station obligation in 2005.
Last month legislator Ade Daud Nasution from Reform Crescent Party asked Communication and Information Minister Sofyan Djalil to review the 3G license awarded to Cyber Access and Natrindo Telepon Seluler (subsidiary of Lippo Group).
Ade Nasution said high-level lobbies were behind the license for Cyber and Natrindo. Nasution mentioned Taufik Kiemas (husband of former president Megawati Soekarnoputri) and Prayogo Pangestu (owner of Barito Group) were behind Cyber, while Akbar Tanjung (former house speaker) and Theo Sambuaga (commissioner at Lippo and member of House Commission I) were behind Natrindo.
Malaysia’s Maxis Communication had acquired 51% of Natrindo for US$100 million and agreed to lend US$150 million for four years. People criticized both Cyber Access and Natrindo for selling their shares before they managed to deliver 3G services saying they’re acting only as license brokers.

In May, government said it would withdraw all 3G licenses and reopen the bidding but failed to do so afraid of possible legal battle in international courts.

So, now government is asking Hutchison to give back the 5 MHz. Just like when Mobile-8 Telecom (a subsidiary of Bimantara) was asked to give back the bandwith.

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Murdoch acquired ANTV & TV7

Press barons have always been feared, even hated, for the power they can wield over us. But until recently they have been the creatures of the neighborhood. Rupert Murdoch is the first press baron to be a monster of the entire world. That's globalization for you.
And monster is how many people do see Murdoch. He is subjected to far more criticism, if not abuse, than any other contemporary media mogul (except perhaps Bill Gates, and in both cases, mythomania plays a part). Throughout his life he has been attacked for his right-wing politics and for allegedly lowering the standards of everything he touches.

That was the article in Time magazine in November 1999.

An the monster is preparing something big in Indonesia. As reported by Prospektif.com late last month, Murdoch through its Star TV has signed agreement to acquire 20% of ANTV from Bakrie Group (a company controlled by Aburizal Bakrie, Indonesia’s chief economic minister).

Murdoch also in the process to acquire 20% shares of TV-7 (owned by Kompas Group, the largest print media business in Indonesia with its flagship Kompas newspaper). On top of that, Star TV through ANTV will control another 30% shares of TV-7.

Previously cable TV giant Astro also acquired shares of Indonesian Kabelvision, a company controlled by Lippo Group.

Star TV is not a new name for Indonesia. The network has entered the market since 1990s under a cooperation with PT Matahari Lintas Cakrawala (Malicak) which operates Indovision. Malicak is owned by Peter F. Gontha, a former executive at Bimantara and close friend of Bambang Trihatmodjo (son of former president Soeharto).

What drives Murdoch to acquire ANTV & TV-7?

Well, the media magnate once said Indonesia with its thousands of islands and a population that could rivaling that of the US, is made for digital transmissions. Statistics shown us the TV penetration among Indonesian households is low even in Java island average TV ownership is 59.28% while in Sumatra island well below 52%.

TV commercials also a promising business. According to data from Nielsen Media Research, total advertising spending in Indonesia last year was US$2.2 billion of which almost 70% absorbed by TV.

But business is not the only motive for Murdoch. Politic is his concern. Rupert Murdoch has given his full backing to Iraq war, praising George Bush as acting "morally" and "correctly" and describing Tony Blair as "full of guts" for going out on a limb in his support for an attack on Iraq. That’s why his Fox News is called Bush TV.

James Fallows of the Atlantic Monthly points out that most of Murdoch's actions "are consistent with the use of political influence for corporate advantage." In other words, he uses his publications to advance a political agenda that will make him money.

The New York Times reports that in 2001, for example, The Sun, Britain's most widely read newspaper, followed Murdoch's lead in dropping its traditional conservative affiliation to endorse Tony Blair, the New Labor candidate. News Corp.'s other British papers, The Times of London, The Sunday Times and the tabloid News of the World, all concurred. The papers account for about 35% of the newspaper market in Britain. Blair backed "a communications bill in the British Parliament that would loosen restrictions on foreign media ownership and allow a major newspaper publisher to own a broadcast television station as well a provision its critics call the 'Murdoch clause' because it seems to apply mainly to News Corp." [Atlantic Monthly, 9/03; New York Times, 4/9/03]

What is Murdoch’s political agenda in Indonesia? War on Terror? Polishing US and The West image? Support moderate Islam? Let's just wait!

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Harvard alumni as President’s economic advisor

Harvard-educated economist Dr Sjahrir has been appointed as economic advisor for president Susilo Bambang Yudhoyono.

The chairman of New Indonesia United Party, summoned yesterday by the president, will give advise on economic implementation strategy for the cabinet including poverty eradication, employment, and investment.

Dr Sjahrir, owner and CEO of Sjahrir Securities, admitted his tasks will be, among others, settlement of disputes with Cemex Asia Holding (regarding PT Semen Gresik Tbk) and Karaha Bodas Company (US-affiliated company).

There were speculations that Sjahrir’s junior like Dr Muhammad Chatib Basri, noted economist from University of Indonesia, will also be appointed as president’s advisor on economic policy.

Sjahrir is known for his friendship with some noted businessmen like Peter F Gontha (former key figure in Bimantara Group led by Soeharto’s son Bambang Trihatmodjo) or Aburizal Bakrie (chairman and owner of Bakrie Group), now the chief economy minister.

Yudhoyono’s cabinet is heavily filled with US-graduated ministers. At least 10 ministers are US-graduated. They are Andung Nitimihardja (minister for industry, University of Pittsburgh), Sri Mulyani (national planning, Illinois), Sofyan Djalil (IT & multimedia, Tufts), Purnomo Yusgiantoro (mining & energy, Colorado School of Mines), Alwi Shihab (coordinating minister for social affairs, Temple and Harvard), Mari Elka Pangestu (trade, UC Davis), Bambang Sudibyo (education, Kentucky), Jusuf Anwar (finance, Vanderbilt), Hassan Wirayudha (foreign affairs, Harvard and Virginia).

It is not clear whether the president will establish National Economic Council, one of his presidential campaign plans. Some economists argued against such council since it would overlap with cabinet portfolios. Abdurrahman Wahid established such council in 1999 led by senior economist Prof Emil Salim (UC Berkeley-graduated) where Sri Mulyani was the secretary of the council. But Wahid’s successor, Megawati, preferred to had informal economic advisors such as senior economist Frans Seda.

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