Chances slimmer to get fixed line service

Chances slimmer to get fixed line service

Tony Hotland, The Jakarta Post, Jakarta

Chances are getting slimmer for more members of the public to
gain access to fixed-line telephone services as the existing
operators remain reluctant to invest in the sector, a senior
official of the Indonesian Chamber of Commerce and Industry
(Kadin) said on Wednesday.

Kadin's telecommunications committee head Anindya N. Bakrie
said the existing telecom operators would rather invest in the
cellular sector than in the fixed-line sector because the latter
cost them less, while promising higher returns.

"The cost of building fixed wireline infrastructure is eight
to 10 times more than that of cellular or fixed wireless service.
Meanwhile, the return on investment (from the fixed-line
business) is not guaranteed," he said.

At present, only around 8.5 million people out of 220 million
(about 3.9 percent) in Indonesia have access to fixed-line
phones, mostly in urban areas.

Therefore, Anindya said one of the recommendations proposed in
the road map to be submitted by Kadin to the new government was
that the government should allow as many qualified operators to
compete in the sector as was practical.

"The government must pave the way for all qualified and
determined operators to enter the sector. Such a situation is
better as consumers will eventually have more choices," said
Anindya, who is also the president of PT Bakrie Telecom.

However, he was unable to specify the ideal number of
telephone operators, saying that it should be left to the market
forces.

"After opening the sector, the government must assure a 'level
playing field' in order to attract new investors," he added.

Currently, only PT Telkom and PT Indosat are allowed to offer
local, long-distance and international call services.

The government is trying to install new fixed lines in the
rural areas under the Universal Service Obligations (USO) scheme,
where one line is expected to serve one village.

However, the project's progress remains sluggish and its
maintenance is questionable due to the very limited fund
allocated in the state budget.

In order to boost funds for the project, the government has
asked telecom operators to contribute to the USO project. The
existing operators have agreed to allocate 0.75 percent of their
annual revenue to help finance the project.

Despite the rapid growth of the cellular industry, analysts
say Indonesia should continue developing its fixed-line network
as it is much more reliable than cellular services. Cellular
services are more prone to trouble or sabotage, compared to fixed
lines.

Elsewhere, Anindya said that in its road map to be presented
to the next government, Kadin also recommended the creation of a
"one-stop shop" to ease coordination among regulators in the
telecommunication sector.

"It'd be more convenient for operators and other stakeholders
if the Ministry of Information and Communications, the BRTI (the
Indonesian Telecommunications Regulatory Body), and the
Directorate General of Post and Telecommunications at the
Ministry of Communications were under one roof," he said.