Govt to lower telecoms construction target

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.