Still long way to go to bridge digital divide

Hendarsyah Tarmizi, The Jakarta Post, Jakarta

The theme of this year's observance of World Telecommunications Day is empowering people to cross the digital divide.

The topic underlines the importance of access to information and communication technologies (ICTs) to catapult small and medium-sized companies in developing countries into the heart of regional, national and global networks.

The concept, which is aimed at promoting the use of internet and e-commerce in the developing countries, is not new at all. The topic, in fact, was used as the theme of the Asia-Pacific Economic Cooperation (APEC) forum in Brunei late in 2000. The subject was also taken as the main topic when leaders of the G-8 industrialized nations met in Okinawa, Japan in the middle of the year.

Japan, as one of the major players in the world's economy, pledged about US$15 billion to bridge the digital divide between rich and poor countries.

Japan's representatives visited Indonesia following the summit meeting to discuss a number of programs which could benefit from the Japanese assistance. However, there was not much progress in the program. It is understandable if the program did not run smoothly. Indonesia and developed countries like Japan are not only "divided" in digital aspects but also in priorities in developing their ICTs.

The people in the United States or in Tokyo have a different interpretation about the digital divide with those in the developing world such as Indonesia.

Internet as the main backbone of the current information and communications technology has become a basic need for most of the people in developed nations, while in Indonesia, even in big cities, the Internet is still a luxury.

For Indonesia, crossing the "telephone divide" between developed and least developed areas might be the most appropriate theme in celebrating this year's World Telecommunications Day.

The divide in the use of telephones in the country is vast. On Java island, telephone penetration has reached many rural areas and villagers can at least use a public phone in nearby markets when they need to talk to their relatives in other parts of the country.

Outside of Java, the situation quite different. Many people have never used a telephone in their entire life, let alone owned one. In an emergency, most would have to travel very far to find a public telephone.

The number of fixed telephone lines in Indonesia is about 6.7 million lines. The ratio between the number of telephone lines with the country's total population (density) is about three percent. It means that for every group of 100 people there are three telephones available. Compared to other members of the Association of South East Asian Nations (ASEAN), Indonesia lags far behind. In Malaysia, the density rate is about 30 percent and in Singapore it is about 58 percent, according to International Telecommunication Union (ITO).

The government had projected an increase in the number of telephone lines to 11 million lines by the year 2000 but the target could not be achieved following the suspension of several telecommunications projects following the onset of the economic crisis in 1997.

The government has engaged in a number of massive programs to boost the density of the fixed telephone lines in the country such as by inviting private companies to jointly develop telecommunications infrastructure under a joint operation scheme (KSO).

With such cooperation, private companies are allowed to build and operate new telephone lines under a revenue sharing scheme. The partnership, which was introduced in 1999, lasts for 15 years. It has been hailed as the most feasible approach to help cross the telephone divide in the country. Without the help of private investors, it will be difficult to meet the telephone installation target.

Five companies have joined the joint operation scheme. They include PT Pramindo Ikat Nusantara for the whole of Sumatra, PT AriaWest International for West Java, PT Mitra Global Telekomunikasi Indonesia for Central Java and Yogyakarta, PT Dayamitra Telekomunikasi for all of Kalimantan and PT Bukaka SingTel International for all of eastern Indonesia, including Sulawesi, Maluku and Irian Jaya.

However, the financial crisis which jeopardized most of the country's business activities, also affected the KSO operations. Many of them failed to meet the installation target, which was then revised downward to ensure the continuation of the partnership.

But Telkom was not really happy with the revision. This has partly incited conflicts with some of the KSO partners. The government's decision to speed up the termination of the exclusive rights given to Telkom has also worsened their relations.

According to the new policy, the government will lift Telkom's monopoly in local and domestic long distance call services in 2002 and 2003 respectively, ahead of the original schedules of 2010 and 2005 respectively.

While Indosat's monopoly in the international telephone call service, which it shared with subsidiary PT Satelindo until 2004, will be nullified one year earlier in 2003.

With the new policy, many KSO operators see the joint operation scheme no longer relevant. This is why many operators have decided to pull out of the partnership.

According to unconfirmed newspaper reports, Telkom has agreed to buy out all the assets of the five KSO partners except that of PT Bukaka Singtel.

The buyout of the KSO operators' assets obviously indicates the failure of Telkom's network expansion program. It means that it should bear all the financial burden to carry out the development of new telephone lines in the future. The big question here "Is this company capable of doing the job alone?". The answer is, of course, no. Telkom should seek other investors or let other companies enter the market, which is quite possible when the new policy is fully implemented between 2002 and 2003.

Inviting strategic partners? This will also be difficult for Telkom. Any sales of Telkom's shares to strategic investors will receive strong resistance from workers, who recently launched a nationwide protest against the sale of the company's assets in Central Java to Indosat.

With such a gloomy picture, it will certainly be a long while before Indonesia can manage to bridge its telephone divide, let alone the digital divide, as the United Nations and the developed countries refer to it.