Infrastructure is still not supportive

Infrastructure is still not supportive

Unlike those in Europe, people in Asia, including -- if not,
especially -- Indonesia like to have the most advanced cellular
phone available, even if it is quite expensive.

A visit to several shops in Paris showed the latest-model
handsets being offered were being sold in Jakarta several months
ago. Many people in Paris still use handsets that are no longer
popular in Jakarta.

Last year, there were 28 million cellular telephone
subscribers in Indonesia, and the total is expected to increase
to 40 million this year.

Meanwhile, only about 8.5 million of our total population of
220 million have fixed-line telephones; for operators, investment
in this sector is less attractive compared to mobile telephony
because the former requires much more funding and the return
takes much longer to realize.

This all adds up to meaning a very strong cellphone market
here. People often buy handsets with very advanced technology,
which means they are more costly, even though in their daily
lives they rarely make use of many of these functions, either
because they are worried about high phone bills, or because the
telecommunications infrastructure is still unable to match the
latest technology. Furthermore, many Indonesian users perhaps
don't know how to use many of these advanced features.

The geographical extent of Indonesia is another problem,
comprising more than 17,000 islands. For the time being,
telecommunications are not a priority for the government; only
one of the 91 infrastructure projects -- the Palapa O2 Ring
(Backbone Network Development) -- was offered to foreign
investors in January.

Taking advantage of the large potential cellular market
available, state-owned PT Telkom has provided new services like
Code Division Multiple Access (CDMA) through Telkom Flexi,
although it is still very limited. In April, the company is also
scheduled to launch its new satellite service Telkom-2.

Last July, according to Alcatel's official website, PT Telkom
and the French company held a partnership to launch Speedy
Broadband Access. In November, Ericsson also won a contract to
provide broadband technology in Surabaya, East Java. Telkom plans
to have 2 million broadband users within the next three years.

Other foreign companies are also working to implement 3G
technology. Much-criticized Law No.36 on Telecommunications,
issued in 1999, has too many loopholes.

So far the government is only allowing PT Telkom and its
partly-owned PT Indosat to provide fixed-line local phone
services, long distance, and international services. Only a few
companies are allowed to provide Voice over Internet Protocol
(VoIP).

"We need legal certainly before we commit ourselves," said a
foreign investor.

However, sooner or later, consumers will be able to enjoy a
greater variety of services for their cell phone, despite all the
current problems. -- Kornelius Purba