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.