Do we really need rates hike?<\/p>\n
By Zatni Arbi<\/p>\n
JAKARTA (JP): It was not long ago that we were complaining of
\nhow difficult, and costly, it was to get a new phone line in our
\noffice or home.<\/p>\n
We were at the mercy of the only public telephone service
\nprovider that we had, who constantly told us that it cost them
\nthousands of dollars to add just a single phone line to the
\nexisting network.<\/p>\n
That was when our telecommunications industry was under a
\nmonopolistic structure, and government policies were strongly
\ngeared toward protecting that monopoly.<\/p>\n
Ironically, at that time, which was about 10 years ago, a lot
\nhad been done in other countries to dismantle the state
\nmonopolies of the telecommunications sector.<\/p>\n
Highly positive results were demonstrated in countries such as
\nNew Zealand, Great Britain and others, where competition and
\nprivatization were introduced.<\/p>\n
Yet a lack of true commitment to our national interests seemed
\nto keep our telecommunications industry moving at a snail's pace.<\/p>\n
As a result, we are still among the countries with the lowest
\ntelephone density in Southeast Asia.<\/p>\n
According to data collected by the International
\nTelecommunications Union, the number of fixed phone lines per 100
\ninhabitants here is 2.70, and that is just above Cambodia at
\n0.25, Myanmar at 0.55, Lao PDR at 0.65 and Vietnam at 2.58.<\/p>\n
Fortunately, no one can hold us back from the information
\nrevolution.<\/p>\n
Slowly but surely, the revolution has started to make changes
\nto our telecommunications landscape.<\/p>\n
New technological breakthroughs have brought us new
\nalternatives to wired telephone services. In addition,
\ncompetition among the operators and vendors have made the
\nservices, as well as the hardware that we need to utilize them,
\nincreasingly affordable.<\/p>\n
At the same time, globalization has also demanded that
\nservices that were available elsewhere should also be made
\navailable here.<\/p>\n
The cellular phone, Internet, broadband connectivity,
\nAsymmetric Digital Subscriber Line (ADSL) services, satellite-
\nbased wireless communications systems and so on, have to be
\navailable here because people demand them.<\/p>\n
Unfortunately, the pace of change is becoming faster and
\nfaster while the old, sluggish telecommunications structure that
\nwe have been subjected to all these decades is getting left
\nfurther and further behind.<\/p>\n
Worldwide, the race for 3G wireless services is becoming more
\nheated, with none other than Japanese NTT DoCoMo and American
\ncarriers, such as Sprint, Verizon Wireless and others, competing
\nto be the first to offer the services in the United States, for
\nexample.<\/p>\n
In this country, we are still wrestling with the question of
\nhow we can increase our telephone density.<\/p>\n
At the moment, Telkom is offering a new phone line
\ninstallation at a reduced price. This, inevitably, leads us to
\nthink that there actually was an overcapacity of lines.<\/p>\n
There must have been idle lines all this time that were not
\nmarketed or made available to the public for various reasons,
\nwith the most plausible being to keep the cost of installing a
\nnew line as high as possible.<\/p>\n
If that were indeed the case, the move to market more phone
\nlines might have come too late for a number of reasons.<\/p>\n
It is too late, because if Indonesians were able to enjoy more
\nwidespread telephone service sooner, our society would have
\nbenefited sooner from it.<\/p>\n
Studies throughout developed countries, as well as the
\ndeveloping nations, have consistently indicated a strong
\ncorrelation between the availability of a public telephone
\nnetwork and the local economic development.<\/p>\n
It may be too late also because consumers and users are now
\nsmart enough to see the benefits of alternatives.<\/p>\n
Take the pager service, for example. When the cellular phone
\nbecame increasingly popular and more affordable, the pager
\nindustry was squeezed.<\/p>\n
Then as the short messaging system (SMS) became available and
\nthe price of handsets plummeted further, we hardly saw any ads
\nfrom pager companies.<\/p>\n
It may also be too late because whether we like it or not,
\npeople's lifestyles are also changing due to globalization.<\/p>\n
In Hong Kong, for example, the South China Morning Post
\nreported on April 28, 2001, that local fixed line subscribers
\nwere giving up the service, causing the number of residential and
\nbusiness fixed lines to drop beginning in November last year.<\/p>\n
It is not difficult to presume that since people from Hong
\nKong are constantly on the move, the cellular phone, for which
\nthey have been associated with since the early days of this
\nservice, better suits their lifestyle as it allows them to
\ncommunicate from wherever they happen to be: on the MTR, in the
\noffice, on the ferries or in shopping malls.<\/p>\n
Dataquest reported that at the end of 2000 there were already
\n230 million mobile phone users in all of Asia. Of those, 35
\nmillion -- mostly Japanese and Koreans -- were accessing the Web
\nthrough their cell phones.<\/p>\n
The experience in Hong Kong, as well as in the Nordic
\ncountries where cellular phone density is high, should make us
\npause and wonder: What would happen if we in Jakarta surrendered
\nour wired phone service and relied on our cellular phones
\ninstead?<\/p>\n
Is Telkom prepared for this? Could it move fast enough and
\ncompete with other players?<\/p>\n
The scenario is undoubtedly too farfetched, as there are still
\nso many of us here who cannot afford the currently more expensive
\ncell phone services.<\/p>\n
Yet long-term planners would be able to foresee the trend,
\nonce again, as the cost of cell phone service and handsets keeps
\nfalling.<\/p>\n
Recent reports have been highlighting the fact that industry
\nstalwarts Nokia, Motorola and Ericsson are experiencing a
\nslowdown in their handset sales.<\/p>\n
This means that competition will become even tighter, and as a
\nresult, costs to the users will come down even further.<\/p>\n
And now, as reported by The Jakarta Post last Saturday,
\ntelephone subscribers here are faced with a rate increase of
\n21.67 percent, which may start next month.<\/p>\n
Life will go on as usual, because we cannot get by without the
\ntelephone. The operators and the government have successfully
\nconvinced our legislators that the hike was inevitable due to
\nincreasing operating costs, capital investments and the need to
\nattract foreign investors.<\/p>\n
What they are unaware of, or have simply turned a blind eye
\nto, is the fact that our operator could actually increase its
\nprofitability by becoming a true business-oriented enterprise.<\/p>\n
This would be a tremendous challenge, but with goodwill and
\nthe willingness to take action on the consumers' part, it can
\ncertainly be done.<\/p>\n
A friend's story<\/p>\n
More than a year ago, I had a casual conversation with a
\nbusinessman who owned a private telecommunications company that
\nprovided telecommunications infrastructure.<\/p>\n
He disclosed that at times he would get a lead on a business
\nin a remote location which needed a leased line to its
\nheadquarters for data communication.<\/p>\n
He would then follow up the lead and approach the business.
\nWhen the deal was completed he would give a kickback to the
\nperson who provided the information.<\/p>\n
This person, he said with a smile, was an employee of our
\noperator.<\/p>\n
Whether his story is true or not, I certainly have no interest
\nin investigating. Such practices are far too common in the
\nbusiness scene here, especially in the public sector.<\/p>\n
However, if it is true, it would demonstrate one reason why
\nour state-owned phone operator has not been able to make the move
\nto world-class professionalism and increase its profitability
\nwithout having to raise the rates it charges to the public.<\/p>\n
The service should have been provided by the operator and the
\nrevenue from the rent of the leased line should have helped
\nincrease the company's revenue. But if the story is true, only
\none person in the telephone company had enjoyed an increased
\nrevenue.<\/p>\n
What is so sad is that as individuals in the
\ntelecommunications operator kingdom continue to reap such
\npersonal financial benefits, we as consumers have to pay more and
\nmore for the service.<\/p>\n
Worse, a lack of consumer protection leads to practices of
\nadding features and services that can potentially increase the
\nconsumers' expenses without their knowledge.<\/p>\n
One of them is call waiting, which I have discussed before at
\ngreat length in this paper.<\/p>\n
A reader also reported a problem recently in the Post's Your
\nLetters column. When she asked Telkom to disable her call-waiting
\nfeature, she ended up losing her IDD facility as well. Even
\nworse, the burden of the error was placed on the consumer rather
\nthan the company who made it in the first place.<\/p>\n
The decision to raise the phone rates may be irrevocable. All
\nwe can do is hope that the operators and policymakers in charge
\nof our telecommunications will soon realize that the industry
\nshould move faster and adopt transparency and professionalism to
\nboost efficiency and increase its profitability.<\/p>\n
Policymakers should understand that telecommunications has
\nlong become a basic need and therefore, for the interest of the
\npeople and the nation, the telecommunications industry should no
\nlonger be treated as a cash cow.<\/p>\n
Low and affordable phone rates will mean, among other things,
\na lower-priced Internet for the public. And we all know what the
\nInternet can do, despite all of its dark side, and that is to
\neducate the public and open their minds.<\/p>\n
It is also the reason why the International Telecommunications
\nUnion has chosen the theme "The Internet: Challenges,
\nOpportunities and Prospects" for this year's World
\nTelecommunications Day.<\/p>\n
Our question remains, however: How can we leverage the
\nInternet for the development of our society if basic telephone
\nservice is still limited in coverage but is becoming increasingly
\ncostly?<\/p>",
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