KPPU urges govt to take over Telkom's network

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.