Govt to get extra funds for rural phone coverage

Govt to get extra funds for rural phone coverage

Leony Aurora, The Jakarta Post, Jakarta

President Susilo Bambang Yudhoyono has signed a regulation
obliging telephone operators to contribute 0.75 percent of annual
gross revenues for the state's rural telephone program, as agreed
upon by all stakeholders.

The non-tax regulation is expected to raise more than Rp 400
billion (US$41.23 million) this year, a nine-fold increase above
the government's annual allocation for the Universal Service
Obligation (USO) over the past two years, to make sure that more
villagers in remote areas have access to telephones.

Bloomberg news agency reported on Thursday quoting Minister of
Communications and Information Sofyan Djalil as saying that the
decree had been signed by the President, and his ministry would
send invoices to phone companies within weeks.

"The invoices will be for the January-July 2005 period, then
we will issue another invoice in September and December," Sofyan
said.

The Indonesian Association of Cellular Telephone Operators'
(ATSI) secretary general Rudiantara said that the contribution
had been agreed upon with the government.

"We will wait for the minister's decree to resolve the
technicalities regarding the payment," he told The Jakarta Post.

It was still unclear, for example, if the fee would be
calculated based on audited or preliminary figures, he said.

Funds to be gathered by the implementation of the new
regulation will be quite significant. ATSI has estimated that
combined revenues of cellular operators this year were expected
to reach Rp 30 trillion, 25 percent higher than some Rp 24
trillion booked last year.

In 2004, state telephone firm PT Telkom recorded gross sales
of Rp 33.95 trillion while the country's second largest
telecommunications company PT Indosat booked revenues of Rp 10.55
trillion. Both companies have cellular units in addition to their
fixed line and international phone call services.

Indosat's president director Hasnul Suhaimi said that his firm
might be interested in partaking in tenders to supply telephone
facilities in remote areas.

"We hope to be able to take part in the USO program," said
Hasnul, adding that Indosat had not yet considered which
technology to use for the program.

As many islands cannot be reached by fixed cables, the USO
program uses satellite-based and very small aperture terminal
(VSAT) technology. The government provided Rp 45 billion in 2003
to cover more than 3,000 villages, while last year, 2,600 more
villages got one telephone each.

The implementation of the program has been widely criticized
for its inability to provide supporting services and maintain the
installed facilities. Vouchers to buy phone credits and service
centers are largely unavailable in the remote areas.

Indonesia has one of the lowest telephone coverage rates in
Asia. Last year's figures showed that only about nine million of
the country's 238 million people have access to fixed-line phones
-- one reason for the booming cellular businesses -- and more
than 40,000 villages do not yet benefit from telephone services.