STRATEGIC PARTNERS
March 29, 2000
LEAWOOD, Kan. -- Euronet Services Inc. will begin providing transaction switching services for a shared network of ATMs owned by three Indonesian banks. The network, called Cakra, currently includes about 400 ATMs. Euronet will provide these services through a joint venture with PT Sigma Cipta Caraka, an Indonesian banking information technology firmand the local distributor of Euronet's Arksys brand software. The joint venture company, PT Euronet Sigma Nusantara, marks the first expansion of Euronet's network services division into Asia, and will be the company's third base of network services operations after Budapest, Hungary and Little Rock, Ark. The joint venture will generate revenues from network membership fees paid by the banks as well as a small fee per transaction switched. The joint venture company has also begun marketing its ATM outsourcing services to Indonesian banks and local subsidiaries of multinational banks, with the intention of providing ATM monitoring and other network services in addition to transaction switching. Michael Brown, chairman and CEO of Euronet Services, said, "This joint venture with a valued business partner enables Euronet to deepen our presence in Indonesia without undue burden on our financial or management resources. It also provides us a springboard to a huge market for our other electronic financial transaction and payment services." Djarot Subiantoro, PT Sigma's President, said, "We look forward to expanding our service offerings and working with Euronet Services to provide a high degree of ATM reliability and customer service in this market. With our independent, non-bank company operating the Cakra network, we believe that other Indonesian banks and local subsidiaries of multinational banks will be encouraged to become members." The transaction processing services of the joint venture will be provided by PT Sigma Cipta Caraka's existing data center facilities in Jakarta, and will run on the Arksys Gold Net network software. Euronet will also provide its experience in ATM network operations to the venture. The joint venture company is 80 percent owned by Euronet Services Inc. and 20 percent owned by PT Sigma Cipta Caraka, and will commence transaction switching operations in the second quarter of 2000. Euronet's partner in the joint venture has been the distributor of the company's Arksys software for over 10 years in Indonesia. As a result of this relationship, 18 banks in Indonesia are currently using Arksys software to operate their ATM and debit card systems. With approximately 215 million people, Indonesia is the fourth most populous country in the world. However, with only about 5,000 ATMs in operation, the country's ATM density is only about one ATM for every 43,000 people. By comparison, Poland has an estimated ATM density of one ATM for every 10,000 people, and the U.S. has one for about every 1,250 people.
