Telecom compensation packages await govt approval
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.