Opportunity for private sector in telecom

Opportunity for private sector in telecom

The economic crisis has seriously impacted the business of
members of the Indonesian Telecommunications Association
(Apnatel). The depreciation of the rupiah against the U.S. dollar
caused this because most components used in the
telecommunications industry are imported and paid for in dollars.

Many contracts Apnatel members have with state-owned PT Telkom
and private company Telkomsel are not being renewed, causing the
companies lost business. According to Apnatel chairman Rahardjo
Tjakraningrat, approximately 70 percent of 1,400 companies are
facing bankruptcy and are changing their line of business.

To overcome the problem, especially in regard to employees
specializing in telecommunications who are facing retrenchment,
Apnatel is providing training through a non-governmental
organization, so that they can become operators of Warung telefon
(Wartel) as this is a promising line of business. Members are
also developing a more complete concept, in which they can work
either in Indonesia or abroad.

The telecommunications sector needs to be prepared to face
globalization. "We should start with improving the human
resources sector as there are big challenges in this sector,"
Rahardjo said.

As for government policy governing the industry, Rahardjo said
it was quite good but some changes, such as abolishing collusion,
corruption, nepotism, were needed.

Apnatel, through its Telecommunications Society, has also
formed a team to work in cooperation with the Ministry of
Communications on recommending amendments to Regulation No. 3.

With regard to PT Telkom and PT Indosat, Apnatel disapproves
of plans to sell their shares in order to find a strategic
partner to raise about US$1.5 trillion. It claims the timing is
not good because at the moment the price is very low, while PT
Telkom, PT Indosat and other telecommunications companies have
good prospects, provided that Indonesia's economy recovers soon.

Apnatel said it would be better if this field was given to
local professional people appointed by the government, from
outside both companies, to recharge the business culture in
facing competition.

"If we don't give our professionals a chance, they will never
be world-class operators," Rahardjo said.

On telephone tariff increases, Rahardjo approved as long as
they were proportional and did not burden society. The increases
are needed because lines are paid for in dollars, he said.

As for Apnatel members, Rahardjo suggested that they find a
wise solution to deal with current problems and that they
maintain their present ability in order to be prepared for any
positive changes that may happen in future telecommunications
developments.

He said telecommunications technology always advanced, not
only for telephones but also for multimedia as well as data
transfer and computerization systems.