Telecommunications companies welcome new law
JAKARTA (JP): The new telecommunications law gives players in the country's telecommunications industry the long-awaited chance to compete more openly and fairly, operators in the industry said.
The business development manager of multinational satellite telecommunications firm PT Asia Cellular Satellite (ACeS), Gema Suria, said the antimonopolistic characteristics of the law was a good and solid basis for telecommunications players to create open competition in the industry.
"Open competition is good for business. The law provides a wider opportunity for open and fair competition in the market," he told The Jakarta Post on Friday.
The House of Representatives passed the new telecommunications law on Aug. 25. The law, designed to eliminate the government's monopoly of the telecommunications sector, will become effective one year after it is ratified by President B.J. Habibie.
Under the law, local and foreign companies will be free to enter the country's telecommunications industry without having to collaborate with state-owned telecommunications firms PT Telkom or PT Indosat.
In order to respect an earlier commitment given by the government to foreign investors prior to the initial public offering of the two state-owned companies, however, the law will maintain the exclusive rights held by Telkom and Indosat for a certain period of time.
Telkom will be allowed to maintain its control of local fixed line nationwide until 2010 and domestic long-distance telecommunications services until 2005. Indosat and its subsidiary PT Satelindo will maintain their monopoly of international call services until 2004.
Gema said ACeS was optimistic it could take advantage of the opportunities afforded by the law to further expand its business.
"We are not thinking of entering the Telkom-dominated local telecommunications sector. In terms of fixed-line telephones, we're only aiming to provide an alternative telecommunications system for users of domestic long-distance and international calls.
"But we are sure about competing head-to-head with foreign players in satellite-based telecommunications for cellular phones by focusing on existing cellular phone users," he said.
ACeS' satellite telecommunications system is based on the Global System for Mobile Communications (GSM), and will employ the dual-mode handsets GSM900/1800 and AMPS.
Gema said ACeS would not compete with existing cellular operators. ACeS' system will be an alternative for cellular phone users while they are roaming outside the country's traditional GSM900 network, he said.
The head of the industry policy division at the Indonesian Association of Cellular Telecommunication, Rudiantara, also welcomed the new law because it gave operators more freedom to run their businesses.
"The most important benefit of the law is the improved and fairer arrangement of interconnections. With the new arrangement, cellular operators can work efficiently and will be able to create a level playing field with other operators," he said.
The new law allows all operators to provide a network or utilize other providers' networks by paying an interconnection fee to network owners.
Rudi said that although the law gave new players a greater opportunity to enter the business, the cellular industry would continue to be dominated by the existing players, particularly the GSM providers.
"We know some firms have been licensed to operate as cellular operators, but they will not be able to begin operations soon due to the economic crisis," he said.
He added that new cellular players would face tough competition because they would be offering a system which was not common in Indonesia.
There are currently seven cellular operators providing GSM, Advanced Mobile Phone System and Nordic Mobile Telephone System to 1.6 million users. (cst)