Tue, 27 Dec 2005

A conversation took place in a modest house, one with unplastered walls and the exposed roof covered in cobwebs -- in a traditional fisherfolk's village in Labuan, Banten, some five hours drive from Jakarta.

The house belongs to a neighborhood unit (RT) chief and he was talking with his son, who had returned from working in Malaysia.

"I am an IT (information technology) engineer and worked on some projects with companies in Malaysia," said the 27-year-old son, Tubagus Ari, who helped Banten provincial administration develop its www.banten.go.id website.

"Working abroad is more challenging, particularly in Malaysia, which is very accommodative in terms of technology," Ari said. "To be honest, this country lags way behind in technological advancement."

Believe it or not, Ari explained, some of the best IT engineers working in Malaysia and Singapore are Indonesians. Yet, the country's information and communications infrastructure lags behind that of neighboring countries.

Put simply, Indonesia is all brain without a functioning body. And the brains have chosen to move to countries where the work is better.

The local information and communications technology (ICT) industry has long been without guidelines, responding late to changes in the global forum.

Bureaucracy-wise, despite fears of reemerging information censorship, the transformation of the office of the state minister of communications and information into a portfolio Ministry of Communications and Information in late January may be promising.

Among the ministry's technical posts are the wireless technology and information infrastructure directorate general, which will soon design an ICT road map with the Ministry of Transportation's post and telecommunication directorate general.

The communications ministry hopes to more appropriately allocate existing infrastructure such as frequencies.

The Ministry of Industry will support the promised development through its new transportation and ICT industry directorate general.

They should also put high on their agenda the proper utilization of ICT for the democratization of information instead of only the generation of income.

And more importantly, the government needs to speed up the development of ICT infrastructure.

While the development of countries is increasingly measured by their bandwidth per capita, only about 4 percent of Indonesia's 220 million people enjoy the privilege of connectivity, 2004 data from the International Telecommunications Union (ITU) reveals.

Currently there are 8.7 million fixed-line and around 40 million cellular subscribers here.

By and large, the nation is lagging behind its Asian peers in its telecommunications penetration index -- the ratio of telephone lines in service or cellular subscribers per 100 people -- (4.2 for fixed line and 12.43 for cellular).

In comparison, Malaysia's telephone penetration index stood at about 25 percent in 2003.

At present, urban areas, such as Greater Jakarta, have a penetration index for fixed lines of more than 30 percent, while at the same time, regions in most parts of the country have an index of less than 5 percent.

Currently, only 4.4 million of the country's population have computers and Internet connections. Other countries in the Asian region have reached at least 5 percent of their populations.

It is very unfortunate as 1 percent teledensity equals 4 percent economic growth.

Getting connected could also significantly lower the high cost economy that burdens the competitiveness of Indonesian products in the global market.

In Singapore, paperwork is completed on-line before ships actually dock, saving a lot of time and increasing the efficiency of its ports.

Indonesia, although it has talked about e-government, is yet to reach such a level of efficiency, mainly due to inadequate ICT infrastructure.

Geographical features, for one, is among Indonesia's challenges in developing telecommunications infrastructure.

Unlike continental Thailand or relatively small Singapore, Indonesia has to connect separate islands of varying terrain, requiring a good mix of both satellite and fiber optic connections, especially where traffic is high.

Earlier this year, PT Telekomunikasi Indonesia (Telkom), the country's largest telecommunication firm, and Telekom Malaysia Berhad opened a new fiber optic network worth US$11 million in investment on the Dumai Melaka Cable System (DMCS).

The project connects the two countries and -- to Indonesia's benefit -- their cities with western Europe and the U.S.

Indonesia earlier cooperated with Singapore Telecommunications (SingTel) and the Communications Authority of Thailand (CAT) in operating a similar fiber optic network connecting the three countries.

Last month, Telkom launched its second satellite, the $170 million Telkom-2, to replace outdated Palapa B4.

Aside from this additional backbone infrastructure, the only other telecommunication project on bid at January's Infrastructure Summit, which requires a $900 million investment, has yet to attract any investors.

The Palapa Ring O2R project is aimed at connecting Indonesian cities using a 36,000-kilometer-long fiber optic network with a data carrying capacity of between 320 gigabytes per second to 40 trillion bytes per second.

Among other problems hampering larger investments in telecommunications infrastructure is the lack of a tariff-and- costs-related regulation.

Former transportation minister Giri Suseno suggested that the government issue more network facilities provider licenses with incentives, such as lower licensing fees.

Given the scale of the investment required to build the infrastructure, the government also needs to promote the development of local manufacturers that support the sector, so that they can supply cheaper components for infrastructure projects.

Data from telecommunications service providers show that the telecommunications sector would need yearly hardware supplies from the supporting manufacturing industry totaling Rp 22 trillion ($2.4 billion) to Rp 30 trillion.

Domestic ICT manufacturers -- started in the mid-1970s and pioneered by state-owned PT INTI and the National Electronics Agency (LEN) and later followed by several private companies -- are estimated to meet only 2 percent or 3 percent of the demand.

Indonesia needs to jump ahead in developing ICT industry clusters to speed up the transfer of technology if it is to reduce dependency on imported hardware.

The country has to avoid the subsector from developing into mere assemblers, as happened with the automotive industry.

Thailand has stolen the show by setting up ICT development centers in several of its 70 provinces, while Indonesia might have a promising start in the Jababeka Industrial area, west of Jakarta.

With the Asia Pacific's IT market projected to grow at an annual compound rate of 8.9 percent from 2004 to 2009, outpacing the global expansion of 6.1 percent, Indonesia could actually gain a share.

At present, Indonesians are just mere consumers in the ICT market. Furthermore, ICT has mainly been used for more materialistic reasons, with people buying cellular phones for style and prestige without maximizing their functions.

What the country needs is a functioning body to accommodate powerful brains, like Ari and his restless energy, and deter those with destructive designs, like hackers and the creators of cyber wars.

If the government cannot provide the needed investment for the infrastructure, the least it could do is formulate comprehensive guidelines.