World-class operators<\/p>\n
PT Telkom, which for the past 25 years has been mired in
\nnearly every possible excess inherent in a state monopoly, is
\nbeing transformed not only into an efficient, competitive
\nnational company but also into what the company's president,
\nSetyanto P. Santosa, calls a world-class telecommunications
\noperator.<\/p>\n
The state monopoly of domestic telecommunications services has
\nsuccessfully passed the most comprehensive, rigorous health
\nchecks for initial public offerings of shares in Jakarta, New
\nYork and London. Next month it will launch its triple listings to
\nraise about US$2.5 billion in fresh funds. Its offering through
\nthe Jakarta stock exchange will total 1.16 billion shares -- the
\nlargest-ever single issue.<\/p>\n
Telkom also concluded a major deal on Friday to help speed up
\nthe process of its transformation into a world-class
\ntelecommunications carrier.<\/p>\n
For the next 15 years, starting in January, telecommunications
\nusers outside the greater Jakarta area and East Java will be
\nserved by major foreign companies. These Indonesian-foreign joint
\nventures will also install more than two million new phone lines
\nover the next two to three years. The additional capacity will
\nremove the supply-side constraints which are still quite severe
\nin many areas, notably in the eastern provinces. Telkom can now
\nconcentrate its resources on accelerating the installation of
\naround three million lines in Jakarta and East Java.<\/p>\n
The biggest benefit, though, is the entry of the foreign
\noperators, which will speed up the development of the
\ntelecommunications industry -- one of the vital services needed
\nto make the country competitive in an increasingly globalized
\neconomy. Now with a telephone density of only about 1.5 lines per
\n100 inhabitants, inadequate telecommunications is an obstacle to
\neconomic development.<\/p>\n
However, it is the low telephone density that makes the
\ncountry attractive to giant telecommunications companies. With a
\npopulation of almost 200 million and an economic growth projected
\nat more than seven percent a year, the potential demand for
\nphones and other telecommunications services is huge indeed.
\nFurthermore, the demand will continue to grow under the
\ngovernment's export-led strategy of economic development.<\/p>\n
The foreign technology and expertise in network installation,
\nmarketing, customer service and other aspects of
\ntelecommunications management and operations will surely bolster
\nthe development of Telkom.<\/p>\n
We think the transfer of technology and skills was one of the
\ngovernment's primary objectives when it decided to allow Telkom
\nto conclude the joint-operation contracts with the joint venture
\ncompanies. Obviously, the US$15.3 billion in revenues Telkom will
\nget from the contractors will be an extra bonus.<\/p>\n
The contracts, for example, require the contractors\/operators
\nto devote a minimum of 1.5 percent of their gross revenues to
\ntraining Telkom employees in their respective concession areas.
\nIn order to ensure that the aspect of equity is not ignored by
\ncommercial considerations, the contractors are obliged to
\nallocate 20 percent of their respective network installations to
\nthe rural areas.<\/p>\n
At the end of the contract in the year 2010, Telkom will
\ninherit from the contractors well-managed networks with an
\naddition of at least two million phone lines and better-trained
\nstaff. That will greatly help improve the overall capability of
\nTelkom to compete with other international telecommunications
\ncarriers when the services sector opens up to free trade under
\nthe World Trade Organization.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/world-class-operators-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}