Govt to lower telecoms construction target TANTRI YULIANDINI The Jakarta Post Jakarta
The government will lower the target for the country's telecommunications development to a more realistic level keeping in mind that the country has yet to overcome its economic crisis, a senior official said.
Minister of Communications Agum Gumelar said on Thursday that the government was in the process of reviewing the target of building 4 million fixed telephone lines across Indonesia according to the people's purchasing power and the rupiah exchange rate.
"We are experiencing difficulties in reaching the target due to the weakness of the rupiah exchange rate, finalization of joint operation scheme (KSO), and the delays in the tariff hike plan," he said in a hearing with the House of Representatives' Commission IV for infrastructure and transportation affairs.
Agum said that the 4 million target was set based on predictions of demand, the people's buying power, and cost of construction prior to the economic crisis.
"Because the crisis is not over yet, it would be reasonable to lower the development target," he said.
The government had set development targets for 4 million fixed telephone lines until 2004, of which state-owned telecommunication companies PT Telkom and PT Indosat were expected to contribute 1.9 million and 1.5 million fixed telephone lines respectively.
The remaining 600,000 fixed telephone lines were to be constructed by satellite-based telco PT Pasifik Satelit Nusantara (PSN) and various local operators such as Ratelindo.
Director-general of Posts and Telecommunications Djamhari Sirat said that Telkom and Indosat are no longer a wholly state company but a public company.
"Investors would be angry if we insist on a high target and put the companies' financial position in danger," he told reporters on the sidelines of the hearing.
Djamhari said that a target could be set, but how well it is achieved still largely depend on external conditions like market demand, political and economical conditions.
Separately, Telkom's director of operations and marketing Komarudin Sastrakoesoemah said that a target should be flexible and constantly reviewed along with the changes of market condition.
"A target should be a minimal figure, so that if it is over fulfilled it would be an achievement," he told reporters, adding that it should be a realistic figure.
Komarudin said that Telkom's shareholders are always keeping a close watch on how many phone lines are targeted by the government and how many Telkom are expected to build.
Telkom was capable of building between 1.5 million to 1.9 million phone lines in three years provided that in those three years the government also increases telephone tariff by at least 45 percent, Komarudin said.
"Without the tariff increase we could only build 160,000 phone lines a year," he added.