Indonesia does will in WTO telecoms pact
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)