PT Telkom agrees with plan to open up telecom sector
PT Telkom agrees with plan to open up telecom sector
JAKARTA (JP): State-owned listed telecommunications company PT Telkom will not oppose the government's plan to remove its monopoly much earlier than the existing schedule, the company's senior executive said on Tuesday.
Company operation and marketing director Komarudin Sastrakoesoemah said Telkom had no objection to the government's plan to speed up liberalization in the telecommunications sector as long as the exclusive rights currently awarded to state-owned international telephone call operator PT Indosat was also removed.
"The favorable time to lift the monopoly is in 2002 or 2003. It must not be later than that because Indosat's exclusive rights will naturally expire in 2004," he told The Jakarta Post on the sidelines of a hearing with House Commission IV for infrastructure and transportation affairs.
He was commenting on the government's recent plan to speed up the liberalization of the country's telecommunications sector by lifting the exclusive rights given to Telkom and Indosat.
Director General of Post and Telecommunications Sasmito Dirdjo recently said the government would lift the monopoly held by Telkom and Indosat by 2002 to comply with the new telecommunications law, effective in September.
Under Telecommunications Law No. 36/1999, Indonesia will eliminate all monopolistic practices in the country's telecommunications sector. The law will allow local and foreign firms to enter the country's telecommunications sector without having to collaborate with Telkom or Indosat. At present there are five local and foreign companies providing fixed-line telephone services under a joint operation scheme with Telkom.
Telkom currently holds a monopoly to provide domestic fixed- line telecommunications services nationwide until 2010 and domestic long distance services until 2005, while Indosat and its subsidiary PT Satelindo hold the exclusive rights to provide international direct dialing services until 2004.
Sasmito said with the new law, Telkom would also be allowed to operate international telephone calls and Indosat local fixed line service.
Komarudin said he was upbeat that the removal of the exclusive rights would not really pose a problem to Telkom's business prospects.
"The real competition will not emerge exactly at the time when the monopoly is lifted. New operators will need around two years to develop their business before they can really compete with Telkom," he said.
Komarudin said in order to develop its future mobile telephone business, Telkom was in the process of acquiring a major mobile telecommunications operator, in which Telkom already has a significant share.
Telkom currently has stakes in six of the seven mobile telephone operators, including Telkomsel, which Telkom has put its biggest investment in the mobile telecommunications sector, controlling 42.7 percent of the company's stakes.
He said to prepare for the impending competition Telkom would divest its stakes in some of its subsidiary and affiliated companies to make its business portfolio more efficient. (cst)