Phone operators to allocate 0.75% of revenue for USO
Leony Aurora, The Jakarta Post, Jakarta
The government will put into effect within a month a regulation requiring all telephone operators to allocate 0.75 percent of their yearly revenues for the state's rural telephone program, a government minister has said.
Minister of Communications and Information Sofyan Djalil told The Jakarta Post over the weekend that the non-tax income regulation would be applicable for sales throughout 2005, even though it might only be signed into law in July.
"We'll impose the levy on revenues (the companies receive) from January onwards," he said.
The regulation would be valid for a year and its application next year would be subject to the evaluation of the government's Universal Service Obligation (USO) program aimed at accelerating development of telephone services in rural areas, Sofyan added.
"The draft is now with the state secretary, waiting for the president's signature," said Sofyan. "I expect it to be signed this month or the next."
In 2004, state telephone firm PT Telkom recorded gross sales of Rp 33.95 trillion (US$3.53 billion), while the country's second largest telecommunication company PT Indosat booked revenues of Rp 10.55 trillion.
Based on last year's financial reports of these two companies alone, the thriving telecommunications sector will contribute at least Rp 334 billion -- and likely a lot more -- to the development of telephone facilities in remote areas this year.
By comparison, the government provided Rp 45 billion -- a mere 13 percent of the expected contribution from the telecom companies -- in 2003 to cover more than 3,000 villages.
Some 2,600 more villages got one telephone each last year.
The USO program uses satellite-based Very Small Aperture Terminal (VSAT) technology, as many of the islands in the archipelago cannot be reached by fixed cables
The Indonesian Association of Cellular Telephone Operators' (ATSI) secretary general Rudiantara welcomed the new regulation, saying that the industry had waited for over a year to see it come into effect.
"The 0.75 percent rate was what we agreed upon with the government," said Rudiantara.
However, the association had not been informed that the regulation would be applied retroactively.
"It will affect our previous quarterly financial reports," said Rudiantara.
Indonesia has one of the lowest telephone densities in Asia. Last year's figures showed that only about nine million of the country's 220 million people have access to fixed-line phones, which is one of the reasons for the rapid growth of cellular phone companies here.
People in about 40,000 villages spread across the archipelago have yet to enjoy the simple joy of calling their loved ones -- who may have moved elsewhere to study or work for a better life -- over the phone.
To date, the implementation of the USO program has been widely criticized for its inability to provide supporting services and maintenance to the installed facilities.
Vouchers to buy phone credits and service centers remain largely unavailable in remote areas.
The government has appointed four operators to implement the rural telephone program, namely PT Pasifik Satelit Nusantara (PSN), PT Citra Sari Makmur (CSM), PT Telkom and PT Mandara Selular Indonesia.