Telecom compensation packages await govt approval
The Jakarta Post, Jakarta
The government said that an independent appraisal team had finished calculating compensation packages and terms of payment for state-owned local call operator PT Telkom and state-owned international call operator PT Indosat for losing their exclusive rights following the liberalization of the telecommunications sector.
However, the compensation packages would still need the approval of the relevant ministries, which was expected to come in early January at the latest.
"Principally, we have settled the amount of compensation and terms of payment for both operators. But we need to wait for approval from the government," Gatot S. Dewa Broto, spokesman for the Directorate General for Posts and Telecommunications at the Ministry of Telecommunications and Transportation, told The Jakarta Post.
Gatot, however, declined to reveal the value of the compensation.
The payment of compensation packages were part of the deal to liberalize the telecommunications sector where Telkom would lose its exclusive rights in the local fixed line market, while Indosat would lose its exclusive rights as the only international call operator.
Indosat has officially entered the fixed line market and is allowed to provide local and long-distance call services, which for decades had been the exclusive preserve of Telkom.
Meanwhile, Telkom will be allowed to enter the international call services market next year.
The compensation was supposed to have been announced at the end of November. However, the process eventually dragged on until the end of the year.
Gatot said that the delay was because the appraisal team had to do its job very careful to avoid objections from one side while trying to determine a value that would satisfied both.
"The team knows that whatever the decision, there will be one side that is less satisfied with it. So, we want to minimize any resistance to it," Gatot said.
In the meantime, Indosat hoped the compensation packages could be settled as soon as possible as it had hampered the operator's plans for entering the fixed-line business.
"We have asked the government to speed up the process of settling the compensation packages," Indosat spokesman Radjamin Nasution told the Post.
Although officially Indosat entered the fixed-line business this year, it is not allowed to expand in this sector until the compensation packages have been settled.
This is in contrast to Indosat's original plan to install 20,000 lines by the end of this year.
So far, Indosat has only received permission to instal 8,000 lines in Jakarta and 5,000 lines in Surabaya. The remaining 4,000 lines in Medan and 3,000 lines in Batam will have to wait until the compensation packages have been officially approved by the government.