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.