KPPU urges govt to take over Telkom's network

Rendi A. Witular, Jakarta

The Business Competition Supervisory Agency (KPPU), a monopoly watchdog, urged the government to take over the domestic telecommunications network backbone from state-owned telecom company PT Telkom to help ensure fair business practices in the sector.

KPPU member Faisal Basri said on Monday that the takeover of the facility by the government would help ensure that other telecom players get equal treatment and opportunity in using the network.

"With the network still in the hands of Telkom, it is hard to expect fair competition among the industry players. Fair competition involving more players will lead to lower telephone rates for the public," said Faisal in a press briefing.

The government has liberalized the country's telecommunications industry, with the hope that the public, especially those living in remote areas, will be able to gain easier access to telephone services at a lower rate.

However, problems linger including the control of the network backbone by Telkom, a situation that has discouraged new players from entering the domestic telecommunications industry as Telkom could easily adopt a discriminatory strategy in the use of the network.

"Telkom has failed to make a major move in expanding the country's fixed-line telephone network despite all the privileges the firm enjoys from the government," said Faisal.

The KPPU suggested the government create a non-profit firm with the task of independently managing the network backbone for all telecommunication operators.

The funding for the company's operation could be financed from interconnection fees it collected from the operators, Faisal said.

"It would be better for Telkom to deal with telecommunication services rather than the network, so that it will not be burdened by government requirements in setting up the network and fixed- line access for the entire region," he said.

Currently, the country's density for telecom fixed-line access remains low, as only about 9.5 million of the country's 215- million population have access to fixed-line telephones, including fixed-line and fixed wireless phones, with Telkom accounting for 9.3 million of the total.

The government has urged local phone operators to build 10.7 million fixed telephone lines by the end of 2008. This year alone, the operators are obliged to build at least 1.4 million lines.

Another member of the KPPU, Muhammad Iqbal, said that the low density of telephone access could be detrimental to the country's defense system in case of war.

"We cannot depend on the cellular network, it is too fragile. We need a broad fixed-line network, which is more durable, to secure our telecommunication lines in case of war," said Iqbal.

He said that the KPPU would submit its study on the unfair practices and problems in the country's telecommunications industry to the new government, as well as the new members of the House of Representatives, so that they could address the problems.