Government to open up telecom sector by 2002
Government to open up telecom sector by 2002
JAKARTA (JP): The government is considering lifting the
exclusive rights held by state-owned telecommunications monopoly
PT Telkom and PT Indosat by 2002 as part of the liberalization
program of the country's telecommunication sector, a senior
official said on Tuesday.
The official, who spoke under condition of anonymity, said the
early termination of the monopoly was meant as a response to the
new telecommunication law, effective in September.
"The new law clearly states that we have to end all the
monopolistic practices in the telecommunications sector... We are
thinking of lifting the exclusive rights now held by Telkom and
Indosat by 2002," the official told The Jakarta Post.
Telkom currently has an exclusive right to provide local fixed
line service nationwide until 2010 and domestic long-distance
telecommunications services until 2005, while Indosat and its
subsidiary PT Satelindo control over the international long-
distance service until 2004.
Under the new Telecoms Law No. 36/1999, Indonesia will
eliminate all monopolistic practices in the country's
telecommunications sector. The law will allow any local and
foreign firms to enter the country's telecommunication sector
without having to collaborate with Telkom or Indosat.
Director General of Post and Telecommunications Sasmito Dirdjo
said the liberalization in the telecommunication industry would
be in line with the liberalization program set under the ASEAN
free trade area (AFTA).
"However, Telkom and Indosat may have their own time frame. We
are now conducting intensive talks with them on the matter. I
expect we will reach agreement on the date of termination in
August," he told journalists on the sidelines of a
telecommunications seminar.
He said the ongoing talks also will determine the compensation
the government must give to Telkom and Indosat in return for the
latter's acceptance to the early termination of their rights.
Sasmito said international independent consultants would be
hired to assess the liability to the government for potential
losses the two companies could incur following the termination of
their monopolies.
He said compensation would also be given in the form of new
licenses, which for Telkom will be the license to operate
international telephone calls and for Indosat to operate local
fixed line service.
He said Telkom would likely be given the principle license to
start building infrastructure for the new international call
business in August when the government reached agreement with
Telkom and Indosat on the lifting of the companies monopoly.
He reiterated the government's intention to keep Telkom and
Indosat as separate business entities after both lose their
monopolies.
"Telkom and Indosat will stay as separate entities. But, each
will be allowed to operate not only fixed line local and
international calls, but also mobile telecoms and multimedia," he
said. (cst)