New bill won't affect Telkom and Indosat<\/p>\n
JAKARTA (JP): The bill on telecommunications currently
\ndeliberated at the House of Representatives will not affect the
\nexclusive rights held by PT Telkom Indonesia and PT Indosat, a
\nsenior official has said.<\/p>\n
Eman S. Sumantri, head of the telecommunications and
\ninformation supervision department at the Ministry of
\nCommunications, said on Wednesday the two companies' rights to
\nrun the country's telecommunications sector would be maintained
\nuntil the existing contract terms ended.<\/p>\n
"The two companies are still allowed to exercise their rights
\neven if the bill is passed by the House of Representatives
\nwithout any changes," he said, adding that the guarantee for the
\nupholding of the exclusive rights is stipulated in article 58 of
\nthe bill.<\/p>\n
The bill, designed to further liberalize the
\ntelecommunications industry, will, among other things,
\nease restrictions imposed on newcomers entering the industry.<\/p>\n
Under the present regulation, Telkom has exclusive rights to
\nprovide local fixed and fixed wireless telecommunications
\nservices nationwide until 2010 and domestic long distance
\ntelecommunications services until 2005.<\/p>\n
Indosat and its joint venture PT Satelit Palapa Indonesia
\n(Satelindo) hold exclusive rights for overseas long distance
\nservices until 2004.<\/p>\n
Other parties, including cooperatives and private firms, may
\nenter the country's telecommunications sector only under a joint
\noperation scheme or profit-sharing scheme with Telkom or Indosat.<\/p>\n
Eman stressed the rights would be abolished only after their
\ncurrent contracts expired.<\/p>\n
The rights given to Telkom and Indosat were stated in the
\nprospectuses of the two companies published before their initial
\npublic offerings in the early 1990s.<\/p>\n
"The government is committed to fulfilling the promise as
\nstated in the prospectuses," he said.<\/p>\n
He said it would be possible to speed up the removal of the
\nmonopolistic practices in the country's telecommunications sector
\nbut it should be approved by PT Telkom and PT Indosat.<\/p>\n
"Telkom and Indosat must first seek approvals from their
\nshareholders before they make agreements to terminate their
\nrights prior to the expiry date of the existing contracts," he
\nsaid.<\/p>\n
As a consequence, a newcomer who seeks a removal of their
\nrights should pay compensation to PT Telkom and PT Indosat for
\nthe losses that might result from the early removal of the
\nrights.<\/p>\n
Eman said under the proposed new law any party could enter the
\ntelecommunications business without having to cooperate with
\nTelkom.<\/p>\n
"But, as long as Telkom, Indosat and Satelindo maintain their
\nrights, new and existing players will not be able to enter
\nspecific sectors currently handled exclusively by the three
\ncompanies," he said.<\/p>\n
Other players, however, could propose through the government
\nto enter the exclusive sector by offering a fee to the rights
\nholder to compensate for the breach of the rights, he said.<\/p>\n
"The amount of the compensation fee will be set by the rights
\nholder subject to approvals from its shareholders," Eman said.<\/p>\n
He said under the proposed new law Telkom and Indosat would
\nhave to follow the same procedures and regulations as other local
\nor foreign players if they were to open new business in the
\ntelecommunications sectors other than the ones currently granted
\nto them.<\/p>\n
He said an independent regulatory body should be established
\nimmediately after the enactment of the new law to serve as a
\nwatchdog for the future free-competition era in the
\ntelecommunications sector.<\/p>\n
"The body will consist of professional experts and
\nrepresentatives from all concerned parties. The body will be
\nideally installed by the House, and therefore responsible to it,"
\nhe added. (cst)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/new-bill-wont-affect-telkom-and-indosat-1447893297",
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"sponsor": "Okusi Associates",
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