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.