Big chances in telecom industry

Big chances in telecom industry

The Ministry of Communications' Post and Telecommunication's Director General Sasmito Dirdjo supports the notion that telecommunications is one of the industry survivors in Indonesia's crisis. Telecommunications, he said, were once considered a secondary need but are now a vital one. Another reason for their weathering the crisis is that most of the biggest telecommunications' companies are strong state-owned companies.

"We are finalizing regulations which consist of the law itself, presidential regulations, ministerial regulations, ministerial decrees, directorate general decrees, etc.," said Sasmito. The Directorate General of Post and Telecommunications is determined to finalize all regulations, the first changes since 1989, this year.

The changes are significant. For example, the government formerly gave monopoly rights (known as exclusivity rights) to PT Telkom and PT Indosat, which both still retain. "Recently, we heard that the government has talked about privatization," said Sasmito.

Theoretically, privatization is good as long as it is done right, Sasmito said.

Regulations are expected to bar against monopolies and be flexible through permits given based on good conditions.

"It is not easy as we have been in a monopoly era for a long time. It seems attached to our lives," said Sasmito.

In one year, he has raised tariffs twice. "The situation made me do that. We need to realize that out of 210 million people, only a small amount use telephone services. But, that does not make us care less. This is a side that we must see."

"If we raise the tariffs, the decision is made not without difficulty," Sasmito said.

Compared to tariffs abroad, domestic tariffs are relatively cheap but seem expensive due to the crisis. Sasmito has promised to continue observing this problem, adding that should the U.S. dollar reach Rp 5,000, domestic tariffs may decrease.

Telkom competes in the domestic market and Indosat in the overseas market. They have their own markets but they will have to compete in the same market in the future.