Telkom, Indosat break monopolies
Telkom, Indosat break monopolies
The Jakarta Post, Jakarta
State-owned telephone companies PT Telkom and Indosat signed
on Monday an interconnection agreement for the Jakarta area,
allowing the latter to start its local call service in the city.
"With the signing of the agreement, Indosat can start
operating its local call business in Jakarta," Telkom's president
Kristiono told The Jakarta Post.
Indosat was officially allowed by the government to enter the
local call market in August this year as part of the deregulation
of the country's telecommunications sector. But, the company
could only start operations after it signed agreements with
Telkom on various aspects, including the interconnection fees and
compensation packages.
Under the restructuring plan, Telkom, which has for decades
monopolized local and long-distance calling, will be allowed next
year to enter the international call business, which has been for
decades an exclusive right of Indosat.
Radjamin Nasution, Indosat's spokesperson, said under the
interconnection agreement, the interconnection fee for local
phones has been set at Rp 57 per minute. This means Indosat will
pay Telkom for any phone call made by the former's customer to
the latter customer, and vice versa.
Indosat has installed facilities for 8,000 local telephone
lines in Jakarta and another 5,000 local lines in Surabaya.
Telkom now has 6.5 million subscribers.
In order to start its service in Jakarta and Surabaya, Indosat
has invested some Rp 170 billion (US$18.8 million) to develop the
infrastructure, including receiver and transmitter stations
Indosat has also planned to provide local call service in
4,000 lines in Batam and 3,000 lines in Medan.
"By the end of this year, we will have 20,000 local fixed
telephone lines," he said.
The government has set a target for Indosat of installing 1.4
million fixed access telephones by 2005.
Radjamin said that Telkom and Indosat were still working out
compensation packages for both parties for losing their exclusive
rights. Details of the compensation packages were expected to be
released in November.
"We are still discussing the issue. Hopefully, it can be
released soon," Radjamin remarked.
Kristiono said thus far Indosat's local call service was
limited in Jakarta, but it could operate the service nationwide
once Telkom and Indosat sign the agreement on compensation
packages.
The government reasoned that, in theory, by lifting the
monopoly on telecommunications the public could enjoy better
services at lower prices.
However, many analysts doubted the plan would do either,
saying Indosat would only fulfill demand which cannot be met by
Telkom.