Boon year for telecommunications

Boon year for telecommunications

By I. Christianto

JAKARTA (JP): The country's telecommunications industry has shown significant growth in 1994 with the development of various facilities, including networks and satellites.

In telephone facility development, for instance, the government has invited the participation of private firms in telephone line establishment.

During the current Five Year Development Plan (Repelita VI) period, the government has targeted five million new telephone lines, of which three million lines will be installed by the state-owned domestic telecommunications company, PT Telekomunikasi Indonesia (Telkom), while the other two million lines will be offered to private companies.

A total of 12 consortia, comprising of both foreign and domestic companies and cooperatives, have been selected by the government to install the two million lines, which will be done in various parts of the country other than Jakarta and East Java.

After the abolition of monopoly in telephone line establishment under Telecommunications Law No. 3/1989, it will be the first time in the country that consortia of private firms are invited to construct basic telecommunications facilities. Previously, Telkom just offered a join operation scheme and profit sharing cooperation.

Questions, however, have been raised by various parties, asking about the openness of the government in conducting the pre-qualification system in selecting the 12 consortia.

The parties said that the government actually chose 15 consortia in September to take part in the tenders for the installation of two million telephone lines but then dropped three of them for unrevealed reasons.

Secretary General of Tourism, Post and Telecommunications Jonathan Parapak, who chaired the selection team, has been unwilling to explain such an issue, saying that reporters should not have been involved in their tricks.

Mobile phones

In a cellular mobile telephone project, Telkom has developed a Global System for Mobile Communications (GSM) cellular telecommunications system on Batam Island of Riau, which was inaugurated by State Minister of Research and Technology B.J. Habibie in early September.

Habibie said the rapid development of digital cellular telecommunications in Indonesia is likely to edge out the increasingly out-dated analog system.

The quality of GSM, one of the main leaders in digital cellular mobile telephone systems in the world, is better than the analog system and the European digital system and therefore will be applied nationally, Habibie said.

Such a statement, however, has not caused a rush for the purchase of GSM telephones. Telkom has so far sold only some 40,000 lines in Riau, while PT Satelit Palapa Indonesia (Satelindo), a private join venture between Telkom, Indosat and Bimantara Group, which also operates a GSM system in Jakarta, even failed to achieve its own target of selling 30,000 lines by the end of this year.

Minister of Tourism, Post and Telecommunications Joop Ave, in the meantime, has announced the establishment of a new joint telecommunication venture which will operate GSM nationally in the next few years. The operator will be jointly controlled by Telkom and the state's international telephone operator PT Indosat, which has successfully sold its shares both on the domestic and international stock exchanges.

On the other hand, existing analog cellular mobile telecommunications operators said that both the analog and digital systems will be complementary to subscribers, meaning that analog system businesses are secure in Indonesia.

There are currently three analog modes operating in Indonesia, including the advanced mobile phone system (AMPS-800) run by PT Elektrindo Nusantara in Jakarta, West Java and North Sumatra; by PT Centralindo Pancasakti in Central and East Java; and by PT Telekomindo Prima Bhakti in Bali, South Sulawesi and Kalimantan. PT Rajasa Hasanah Perkasa runs Nordic mobile telephones (NMT-450) in Jakarta and Bandung of West Java, while the other mode is Telkom's total access communications system, whose utilization is decreasing.

Joop also said that subscribers still have to pay a big amount of money to get either analog or GSM telephone lines, whose prices are set in Jakarta at a minimum of Rp 4 million each, due to a number of government levies.

Satellite

Indonesia will also have the Asian Mobile Satellite System, another sophisticated mobile telecommunications project using four satellites called Garuda, to be prepared by PT Pasifik Satelit Nusantara (PSN). The company has finalized the feasibility study for the system, which will make Indonesia the world's second user of a mobile geo-stationary satellite telecommunication system after the United States.

The feasibility study of the US$900 million project has been completed by PSN, Hughes Communications Inc. of the United States and two Singaporean firms.

Satellites apparently play a major role in the development of the telecommunications industry, which will in turn accelerate the growth of the country's economy and improve the well-being of the population.

Satelindo, which manages the country's Palapa-C satellites, will launch Palapa-C 1 in late 1995. A total of 21 firms from nine countries have already reserved the satellite's 34 transponders.

Indosat has also agreed to participate in an advanced satellite-base personal mobile communications system arranged by the International Maritime Satellite Organization (Inmarsat).

The organization is a leading global mobile satellite communications operator, owned by 76 signatories -- telecommunications firms -- all over the world. Indosat, becoming a member in 1986, controls a 0.26 stake in Inmarsat, which is based in London. The long-term $2.6 billion mobile satellite project will use 12 satellites in the intermediate circular orbit system for its space segment.

Services

The government said that telecommunication services will be improved in 1995 as charges for line installation will be lowered.

In a hearing at the House of Representatives, Parapak said recently that the government will adjust fees for telephone line installations and long distance calls.

Minister Joop has also warned Telkom to improve its marketing strategy and service or lose out as the competition gets tougher.

According to Joop, only 2.5 million out of Telkom's 3.7 million telephone lines will have been sold by the end of this year.

Joop also complained that the fiber optic telecommunications system linking Jakarta and Surabaya in East Java is poorly utilized. Out of the 11,940 channels provided, only 5,700, or 47 percent, have been utilized.

In the meantime, Indosat also faces tight competition with Satelindo in international calls as the latter began offering international telephone services three months ago.

Several star-rated hotels in Jakarta provide only Satelindo's international dialing code of 008, instead of the international direct dialing codes of 001 and 0010 of Indosat.

Indosat, which does not operate a satellite, will loose the competition if such competition continues nationally.

Indosat has filed a special chapter in the country's history by becoming the first successful state-owned firm offering shares both in domestic and international stock exchanges. The government will use the $799 million in funds raised from the recent sales of Indosat's shares through the New York Stock Exchange to speed up the repayment of its high-interest loans from the World Bank and the Asian Development Bank. The company raised around Rp 650 billion from the sales of another 10 percent of its shares on the local capital market.

Telkom, meanwhile, has already been chosen by the government as one of the next state-owned firms which will offer shares internationally.