Huge telecom project offered at Summit

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.