Indonesia does will in WTO telecoms pact

JAKARTA (JP): Local businesspeople can now enter world telecoms projects but foreign firms are still limited to a 35 percent stake in Indonesian projects after the world telecommunications pact was agreed on last weekend.

Ministry of Tourism, Post and Telecommunications Secretary- General Jonathan L. Parapak said yesterday Indonesia was one of 68 nations involved in the World Trade Organization (WTO) talks in Geneva, Feb. 15, on opening up world telecommunications markets.

"Indonesia, as a developing country, has insisted on the stance that basic telecommunications business in Indonesia is open based on three schemes. The joint operation plans, management contracts and joint ventures, in which a foreign investor is allowed to buy or to have a maximum 35 percent share," he said.

He said the limit was essential because there was a big difference between developed nations' and developing nations' telecommunications industries.

Parapak said it was possible there would be case-by-case arrangements allowing an overseas party to have a stake bigger than 35 percent in a joint venture.

He said telecommunications joint ventures would be permitted to hire 20 expatriates, including board directors and expert staff.

As part of the deregulation program to attract overseas investors, Indonesia will allow foreign investors to set up wholly-owned businesses in Indonesia.

There are seven cellular operators in Indonesia, three of which are partly foreign owned: PT Satelindo is 25 percent owned by Germany's DeTeMobil, PT Telkomsel 17.28 percent owned by the Netherlands' PTT Telecom and PT Excelcomindo (GSM-XL) 40 percent owned by three foreign firms. Nynex of the U.S. is the biggest foreign shareholder with a 35 percent stake.

Several foreign firms are involved in Indonesia's beeper and radio trunking operations, private fixed-telephone line business and as Internet providers.

Indonesia will not open long distance telecommunications services and international call services to foreign firms until 2006.

This is because state-owned PT Telkom holds the exclusive rights to operate long distance calls and state-owned PT Indosat and privately-owned Satelindo the exclusive rights for international telecommunication services until 2005.

"The most important thing is that Indonesian businesspeople are now able to participate in overseas telecommunication projects, particularly in Europe, the United States, Papua New Guinea, Malaysia and India," Parapak said.

It was good that several other developing countries were involved in the WTO telecommunications agreement, he said.

The global telecommunications pact will take effect on Jan. 1, 1998. The WTO estimates the world telecommunications market is worth more than US$600 billion a year.

Parapak said telecommunication investment in Indonesia would be worth $15 billion between 1997 and 2000, while the value of telecommunications service might reach $4.16 billion a year. (icn)