Telecommunications companies welcome new law<\/p>\n
JAKARTA (JP): The new telecommunications law gives players in
\nthe country's telecommunications industry the long-awaited chance
\nto compete more openly and fairly, operators in the industry
\nsaid.<\/p>\n
The business development manager of multinational satellite
\ntelecommunications firm PT Asia Cellular Satellite (ACeS), Gema
\nSuria, said the antimonopolistic characteristics of the law was a
\ngood and solid basis for telecommunications players to create
\nopen competition in the industry.<\/p>\n
"Open competition is good for business. The law provides a
\nwider opportunity for open and fair competition in the market,"
\nhe told The Jakarta Post on Friday.<\/p>\n
The House of Representatives passed the new telecommunications
\nlaw on Aug. 25. The law, designed to eliminate the government's
\nmonopoly of the telecommunications sector, will become effective
\none year after it is ratified by President B.J. Habibie.<\/p>\n
Under the law, local and foreign companies will be free to
\nenter the country's telecommunications industry without having to
\ncollaborate with state-owned telecommunications firms PT Telkom
\nor PT Indosat.<\/p>\n
In order to respect an earlier commitment given by the
\ngovernment to foreign investors prior to the initial public
\noffering of the two state-owned companies, however, the law will
\nmaintain the exclusive rights held by Telkom and Indosat for a
\ncertain period of time.<\/p>\n
Telkom will be allowed to maintain its control of local fixed
\nline nationwide until 2010 and domestic long-distance
\ntelecommunications services until 2005. Indosat and its
\nsubsidiary PT Satelindo will maintain their monopoly of
\ninternational call services until 2004.<\/p>\n
Gema said ACeS was optimistic it could take advantage of the
\nopportunities afforded by the law to further expand its business.<\/p>\n
"We are not thinking of entering the Telkom-dominated local
\ntelecommunications sector. In terms of fixed-line telephones,
\nwe're only aiming to provide an alternative telecommunications
\nsystem for users of domestic long-distance and international
\ncalls.<\/p>\n
"But we are sure about competing head-to-head with foreign
\nplayers in satellite-based telecommunications for cellular phones
\nby focusing on existing cellular phone users," he said.<\/p>\n
ACeS' satellite telecommunications system is based on the
\nGlobal System for Mobile Communications (GSM), and will employ
\nthe dual-mode handsets GSM900\/1800 and AMPS.<\/p>\n
Gema said ACeS would not compete with existing cellular
\noperators. ACeS' system will be an alternative for cellular phone
\nusers while they are roaming outside the country's traditional
\nGSM900 network, he said.<\/p>\n
The head of the industry policy division at the Indonesian
\nAssociation of Cellular Telecommunication, Rudiantara, also
\nwelcomed the new law because it gave operators more freedom to
\nrun their businesses.<\/p>\n
"The most important benefit of the law is the improved and
\nfairer arrangement of interconnections. With the new arrangement,
\ncellular operators can work efficiently and will be able to
\ncreate a level playing field with other operators," he said.<\/p>\n
The new law allows all operators to provide a network or
\nutilize other providers' networks by paying an interconnection
\nfee to network owners.<\/p>\n
Rudi said that although the law gave new players a greater
\nopportunity to enter the business, the cellular industry would
\ncontinue to be dominated by the existing players, particularly
\nthe GSM providers.<\/p>\n
"We know some firms have been licensed to operate as cellular
\noperators, but they will not be able to begin operations soon due
\nto the economic crisis," he said.<\/p>\n
He added that new cellular players would face tough
\ncompetition because they would be offering a system which was not
\ncommon in Indonesia.<\/p>\n
There are currently seven cellular operators providing GSM,
\nAdvanced Mobile Phone System and Nordic Mobile Telephone System
\nto 1.6 million users. (cst)<\/p>",
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"sponsor": "Okusi Associates",
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