Foreign operators question Indonesia's telecoms policy

Foreign operators question Indonesia's telecoms policy

JAKARTA (JP): Foreign giant telephone firms France Telecom and
Singapore Telecom questioned on Thursday the Indonesian
government's planned reform of the country's telecommunications
sector, calling it "ambiguous".

Executive director of France Telecom Indonesia Philippe Eurin
said the government must translate its reform plan into a much
more definite, detailed format in order to give foreign investors
a clearer picture of what Indonesia's telecommunications sector
has to offer for the future.

"It's very important for us to know the rules of the game," he
told The Jakarta Post at the Indonesian International
Telecommunications, Media & Information Technology (IITELMIT)
2000's showgrounds at the Jakarta Convention Center.

Separately, chief executive officer of Singapore Telecom Ltd.
Brig. Gen Lee Hsien Yang voiced a similar view.

Lee said his company was interested in expanding its existing
investment in Indonesia's telecommunications sector in PT
Telkom's KSO partner, PT Bukaka SingTel International, but would
not make any moves until it got a clearer picture of the
government's plan for the future of the country's
telecommunications sector.

"I'm sure if there's an opportunity for us to make more of an
investment here, we'll be open to looking into it. But I think
we'll wait to see the actual policy and decision of the
government before we decide what to do," he said on the sidelines
of an IITELMIT conference.

Eurin said foreign investors wanted to know how, when and what
the government would do exactly in its reformation of the
country's telecommunications sector so that they could develop a
suitable business strategy for their future involvement here.

He said investors, however, had no idea about many issues --
such as the possibility of more licenses in the fixed or wireless
telephone sector for new operators, the telephone rate policy,
privatization of Telkom and Indosat and the settlement of the
dispute between Telkom and its KSO partners -- all of which are
very critical for business calculations.

Minister of Communications Agum Gumelar told participants at
IITELMIT on Thursday that the government was committed to
reforming its policy in the telecommunications sector by
eliminating the monopoly currently exercised by state-owned
operators Telkom and Indosat, and by allowing local private and
foreign companies to have a much greater access to the
telecommunications business.

He said the government would immediately lift Telkom and
Indosat's monopoly and allow both companies to operate not only
in the fixed line but also the wireless, Internet and multimedia
sectors.

Telkom currently holds the monopoly to provide domestic fixed
line telecommunications services nationwide until 2010 and
domestic long distance services until 2005, while Indosat and its
subsidiary PT Satelindo hold the exclusive rights to provide
international direct dialing services until 2004.

The government earlier said it considered lifting the monopoly
by 2002 or 2003 to speed up the liberalization of the country's
telecommunications sector.

Agum, however, made it clear that the government intended to
give first priority to Telkom and Indosat and to make the two the
largest telecommunications operators in the country.

"Clearly, we're heading to a duopoly, not free market," he
said.

He said private local and foreign companies would be free to
do business in the country's telecommunications sector, but not
as fixed line telephone operators. (cst)