Indonesian telecommunications need a paradigm shift
Indonesian telecommunications need a paradigm shift
By Zatni Arbi
If the world were a perfect place, W.W. Rostow's theory of
development stages might not have looked so ridiculous after all.
The fruit of development would have trickled down to the masses,
and our social and economic pictures would be far different from
the reality that we have now.
If we were living in a perfect society, our friend Immanuel
Wallerstein would not have come up with his theory of the world's
economic system, because we would not find any instance of his
center-periphery dichotomy among ourselves.
Unfortunately, our world is not perfect and, to a large
extent, Wallerstein had it right.
Take this beloved country, for example. While the masses (the
periphery) still have to worry about whether they will have
something to eat tomorrow, some Indonesians (the center) are
indulging themselves with Porsches and Ferraris with prices to
the tune of billions of rupiah apiece.
Another area where the center-periphery gap is obvious is, of
course, access to the basic telecommunication facility, the old
telephone network.
Not only are we, Indonesians, starkly divided into the haves
and the have-nots, we have also been subjected to a fast growing
"Digital Divide" that separates those with access to
telecommunication and information technology from those who have
no access, those who are information rich from the information
poor.
Deprived of information, people in the latter group find
themselves trapped in the cycle of poverty and thus will remain
in the periphery, generation after generation.
The irony is that, more than 15 years ago, Sir Donald Maitland
and an independent commission concluded their study on world
telecommunications with a set of recommendations.
The Maitland report, titled The Missing Link, contained, among
other things, a call for all of humankind to have easy access to
the most basic telecommunications service by the beginning of the
21st century.
Needless to say, we are far short in Indonesia of achieving
that goal. For a population of 209 million people, there are only
six million main telephone lines available.
Wrong paradigm
Looking back, the failure to provide even basic telephone
services to a larger portion of our population was caused by the
fact that the development of telecommunications in the past was
based on a misguided paradigm.
For many years, our telecom operators were regarded, and
therefore were also forced to behave, as profit centers, as
moneymaking machines for the government. They were forced to
concentrate on maximum profitability, as their performance was
measured by how high they would rank on the list of the country's
corporate taxpayers.
While inefficiency stole some of their profits, not enough of
what was left found their way into further investment in
infrastructure.
It was sad, because even back in 1970s communications scholars
were already stressing the strong correlation between investment
in telecommunications and economic growth in a given region.
Paper after paper have been presented in thousands of seminars
to make the point clear. Had our policymakers early on heeded
these recommendations, we would not have ended up with only 5.7
million fixed telephone lines and we would not have the lowest
teledensity among the founding countries of ASEAN.
According to the latest data from the International
Telecommunication Union (ITU), our teledensity is 2.91 telephone
lines per 100 people, while the entire world's teledensity is
14.9.
It was also strange, as the Listrik Masuk Desa (electricity
for rural areas) program was not accompanied by an equally
intense effort to distribute access to telecommunications to the
masses.
It was curious why, at that time, no one spoke of a Telepon
Masuk Desa initiative? Much as electricity is important to
productivity, the telephone, as experiences in many other parts
of the world have shown, would bring about a tremendous increase
in income and improvement in quality of life for the local and
rural people.
A lot of related questions have been nagging us for many
years. However, rather than dwell in the past that no one could
change, we should perhaps look forward.
What should we do with the duopolistic telecommunication
structure? Should we continue to protect it from open competition
or follow Singapore's recent bold move and totally liberalize our
telecom sector?
One of the arguments for it is that, as technology advances at
an increasing pace, we keep witnessing the arrival of new
solutions for telecommunications.
A report in the May 22, 2000, issue of Fortune, for example,
describes a new technology being developed by AirFiber and
TeraBeam. Using laser beams without any fiber cable-which makes
it cheaper to implement, the new technology, capable of up to a
one gigabit per second (Gbps) transfer rate, seems to be ideally
suited to residential areas.
Dialogic, an Intel subsidiary, is working on open-standard
computer telephony (CT) technology that will finally enable us to
place telephone devices on the computer network. The list of
fresh innovations and promising technology goes on and on.
Besides, there are also various trends that we must not
ignore.
First, data traffic is quickly catching up with and will soon
surpass voice traffic, while the old telephone infrastructure
designed to handle short conversational calls is not the ideal
conduit for data traffic.
Second, the number of cell phone users is expected to surpass
the number of fixed telephone lines in 2010. Within the first
three years of its development, according to Yoshio Utsumi,
current secretary-general of the ITU, 276 million people became
mobile telephone subscribers all over the world.
What is the number of fixed telephone subscribers in the first
100 years of its existence? Only 243 million. In Indonesia alone,
according to ITU's data, the number of mobile phone subscribers
jumped from around 1 million in 1998 to 2.2 million in 1999, when
they accounted for 26.8 percent of total telephone subscribers.
Third, the cost of the cell phone devices will continue to
drop while their capabilities will continue to increase. Fourth,
Voice over IP -- the technology that allows voice communications
to ride on the Internet -- has been taking over an increasing
slice of the conventional telephone business.
Just think of it: How much have you saved on telephone bills
since you started using e-mail?
Fifth, the industry, with its mighty power, will continue to
bring technological breakthroughs to the market, whether we need
it or not. WAP is a prime example.
So, what should we do? Perhaps we should just forget about
waiting until PT Telkom, together with its KSO partners, manage
to put a copper telephone line into every home.
As the projection made by ITU suggests, revenues from the
domestic telephone and fax services will continue to decline.
With dwindling revenues, it will be difficult for us to expect
them to have the capability to expand the infrastructure.
Perhaps it is time for a completely radical measure. The
Telecommunications Act, known as Law No. 39 of 1999, will take
effect in September, but perhaps the changes that it will bring
will not be radical enough to really vitalize this sector.
Perhaps we can just open the door as wide as possible to our
telecommunications sector, and let all players -- local, regional
and global -- compete with their technological offerings and
services. Give the consumers the freedom to decide which one they
will use.
Why? Because telecommunications should play the role of an
engine of growth. It should not continue to be treated as a cash
cow for the government, the "center" in Wallerstein's world
system theory. Instead, it should be a means to help bring well-
being and prosperity to the periphery as well.