Govt urged to pursue communications liberalization plan
Govt urged to pursue communications liberalization plan
Moch. N. Kurniawan The Jakarta Post Jakarta
Noted analysts and telecommunications businessmen urged the government on Thursday to pursue its plan to open up the telecommunications sector by removing the monopoly of state-owned telecommunications firm PT Telkom.
The monopoly's removal would boost the public's access to telephone lines and other telecommunications services, they said at a seminar.
The seminar featured, among others, analysts Faisal Basri and Lin Che Wei and PT Pasifik Satelit Nusantara senior official Adi Adiwoso as speakers.
"We must voice that for the sake of the people as we are seeing indications that the government is contemplating protecting Telkom too much," Faisal said.
He cited the recent regulation which granted Voice over Internet Protocol (VoIP) licenses to only five players: Telkom, state-owned company PT Indosat, Indosat's cellular arm Satelindo, private firms PT Gaharu Sejahtera and PT Atlasat Solusindo.
The government has planned to liberalize the telecommunications sector in 2004 by lifting Telkom's monopoly, but Faisal and other speakers at the seminar said the government looked hesitant to realize the plan in view of the fact that it continued to issue regulations protecting Telkom.
This is in contrast with the oil and gas sector, in which the government seems determined to liberalize the sector and remove the monopoly of state-owned oil and gas firm Pertamina.
"Telkom would not collapse due to liberalization, as it has a traditional market and long history in the industry.
"Instead, it would adapt to the new situation by improving its performance, like, for example, national flag carrier Garuda Indonesia, which became better off after the introduction of the open sky policy," Faisal said.
Meanwhile, Adi said free competition in the telecommunications industry was a vital factor in ensuring foreign investors come into the sector.
"The telecommunications industry is actually still attractive because of its high return on investment, which is at about 20 percent. Investors just need more competition and law enforcement," he said, noting Telkom's failure to provide sufficient telephone lines to people.
He painted a bleak picture of the sector should the government fail to issue a pro-liberalization regulation in the sector.
"Our telecommunications, Internet and supporting services infrastructure will not be better off. We are now in the lowest position in these sectors in comparison to other countries, such as China, Malaysia and the Philippines," Adi said.
Lin also agreed with the adoption of the liberalization plan, saying that a monopoly was acceptable in a special situation where the market was small and investors must invest a huge amount of funds.
But, he said, Indonesia was such a big market that Telkom alone was not able to cover it. Thus, there is no reason to maintain its monopoly, he said.
"I agree that Telkom should possess a strong enough basis to compete with other firms in an open market era," he said.
To cope with the problem, Faisal and Lin suggested that the government be professional in supervising the sector and prevent former Telkom officials from becoming regulators.
Faisal further said that the government should establish an independent regulatory board to formulate a strong foundation for free competition.