Huge telecom project offered at Summit

Leony Aurora, The Jakarta Post, Jakarta

Lack of communication is often blamed as the culprit behind the dysfunction between partners -- spouses, coworkers or governments and their people.

If lack of communication is bad, no communication is often worse. It means a loss of opportunities, stagnated development and ultimately lagging behind the world community.

Currently there are 9.1 million fixed telephone lines connecting people across the archipelago -- 17,508 islands spanning 5,150 kilometers -- meaning only four out of 100 Indonesians have readily available access to telephones.

Growth in this sector, controlled by the duopoly of state- owned enterprises (SOEs), PT Telkom and PT Indosat, has been hampered by the high cost of investment as well as the slow and low rate of return, since fixed-line rates are determined by the government.

Fixed line services are losing their attractiveness to the more lucrative cellular services, whose subscribers have multiplied by more than 13 times in the last five years to around 30 million at the end of 2004.

However, cellular services tend to be more focused on middle- class urbanites, ironically, the very same people who have access to fixed-line services.

In a bid to boost people's access to telecommunications technology -- even the most basic, a home telephone -- in remote areas, and thus boost the economy, the government is planning a mega-telecommunications project to build submarine fiber-optic backbone rings circling and connecting all the major islands -- to be offered officially in today's Infrastructure Summit.

The Palapa Ring project, spanning some 30,000 kilometers, is estimated to cost US$1.6 billion and is targeted to be finished by 2020.

Approximately $240 million will be provided from state funds, while SOEs are expected to cover another $300 million and the private sector, the bulk of it, at over $1 billion.

"I think this is one of the best options," said vice chairman of the Indonesia Infocom Society (Mastel) Richard Kartawijaya. "Satellite coverage, despite being good, has delays," he told The Jakarta Post over the weekend.

Fiber-optics can accommodate broadband data transfer while most of the existing telephone lines are only viable for voice and small data transfer. Spectrum technology -- used by cellular operators and satellite phones -- is also limited by the availability of frequency and prone to weather disturbances.

The government set the next three years to be used to draw a road map and master plans. The construction of the Eastern ring, comprising of Papua, Maluku, and East Nusa Tenggara, will start in 2008 and finish in 2012. The Middle ring, comprising Sulawesi, Indonesian Borneo and West Nusa Tenggara will be built between 2013 and 2016 while the existing network covering Java and Sumatra will be rejuvenated in the period of 2017 to 2020.

Despite concerns on the challenges in developing networks in the eastern part of Indonesia, with its difficult terrain and lack of prospective customers, Richard remains positive that investors can be lured.

"The government should give a guarantee on the amount of usage over a period of time," he said. "They have to if they want the project to sell."

Aside from that, specific contents of data that may be more useful and attractive like e-government, tele-education and the like, needed to be designed, he added.

With fiber-optics, Indonesia is preparing itself for a future when communication is not restricted as an audio activity, but a real-time, audio-visual capable nation, for all families, students, and the business community.