[i]This special page is published in observance of World
This special page is published in observance of World
Telecommunications Day, which is celebrated worldwide on May 17.
The special page reports the challenges and opportunities in the
country's telecommunications sector.
USO project: Connecting the unreachable
Hendarsyah Tarmizi
The Jakarta Post/Jakarta
In May 1844, Samuel Morse transmitted the first message by
telegraph. The message was heard 37 miles away and it changed
history, forever.
The apt message, "What has God wrought?", transmitted 160
years ago, marked the dawn of the telecommunications age. Within
a decade, telegraphy had become a routine public service.
Although World Telecommunications Day has been celebrated
every year to commemorate the signing of the first International
Telegraph Convention in Paris on May 17, 1865, the hard work of
Samuel Morse should not be forgotten.
Today, many people cannot imagine daily life without the use
of increasingly sophisticated information and communications
technologies (ICTs) -- from television and radio to mobile phones
and the Internet.
Yet, for millions of people in the world's poorest countries,
there remains a "digital divide" that excludes them from the
benefits of ICTs.
The same situation exists in Indonesia. Telecommunications
technology has become a basic need for many people living in
major cities. A mobile phone has become a must-have item even for
high school students.
In stark contrast, for millions of people living in villages,
telephone services remain a luxury, let alone for other millions
of people living on isolated islands in the vast archipelago.
The investment climate in the telecommunications sector has
become much more positive since the removal of state-owned
telecommunications carrier PT Telkom's monopoly on domestic
fixed-line telephone services.
However, Telkom and new players in fixed-line telephony such
as Indosat, which previously focused its services on
international telecommunications, are still reluctant to expand
their fixed-line services.
Low charge rates for domestic telephone services remain the
main factor in the slow development of the country's fixed
telephone lines.
Although fixed telephone rates have increased by nearly 35
percent since 1991, operators still think the existing rates are
too low to generate a reasonable return.
To develop an infrastructure of fixed lines is much more
costly than providing mobile phone services using Global System
for Mobile Communication (GSM) or the Code Division Multiple
Access (CDMA)-based fixed wireless services. That might
explain why many telephone carriers are focusing their operations
in urban areas, with either GSM or CDMA technology, rather than
providing services in rural areas, which generally lack business
potential due to their small population and the low purchasing
power of the inhabitants.
To rely on existing telecommunications operators in providing
telephone connections for these isolated areas is certainly not
fair. But their contribution to help reduce the isolation is
necessary.
Within this context, the government has adopted the Universal
Service Obligation (USO) concept to cope with the digital divide
in Indonesia. Under this concept, , existing
telecommunications operators are required to provide 0.75 percent
of their revenues to help finance the USO project.
At present, at least 43,000 villages are not reached by
fixed-line telephone services, or about 60 percent of the
country's total.
The first USO project, which was launched in November 2003
under the recommendation of the International Telecommunications
Union (ITU), covered 3,010 villages with the use of Portable
Fixed Satellite (FPS) and Very Small Aperture Terminal (VSAT)
technology. The Rp 45 billion (about US$5.3 million) project was
financed from the state budget because the operators were not yet
ready at the time to provide their contribution.
However, the government is hoping that, from the start of this
year, the USO project, which will last until 2015, will be
financed by funds to be collected from the operators.
Under the 2003 project, qualifying villages should be located
at least 20 kilometers from the closest point of the existing
fixed-line network.
"The distance will gradually be reduced in the coming projects
so that locations closer to existing facilities will also be
covered," said Bambang Dian, spokesman of the directorate general
of posts and telecommunications.
In implementing the 2003 project, the government appointed two
satellite-based operators, PT Pacific Satelit Nusantara (PSN) and
PT Citra Sari Makmur.
PSN was asked to provide satellite-based connections in 2,975
isolated locations in Sumatra, Kalimantan, Sulawesi and Papua
with its FPS technology, while Citra was appointed to install
connections in 35 locations in Kalimantan and East Nusa Tenggara
with its VSAT.
Each location or village was given one satellite-based
telephone connection, to be used as a public phone. The service
is subsidized by the government so that villagers will pay only
as high as Telkom's fixed line tariff.
"PSN has completed all the installment work and now awaits the
second project," PSN's spokesperson Chrisma A. Albanjar said. She
added that each FPS telephone connection cost Rp 13.5 million to
build, including a Rp 750,000 prepayment card.
She said that once the call units were finished, the head of
the village could buy a new card through PSN kiosks located in
the regency capital.
"With such a public phone available, farmers can now check
commodity prices in nearby towns," she said. "For them it is
important because they can now decide the best time to sell their
produce in town," she added.
Bambang said that the government was still preparing the
tender for the second phase of the USO project.
No details were yet available, but he said that the project
would continue according to the existing schedule.
With the reluctance of operators to provide telephone services
in rural areas, the USO project has become the only hope for
millions of inhabitants in remote villages to escape their
isolation from the outside world.