Fri, 30 Jun 2000

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)