Telkom, Indosat still need 'govt protection'

Telkom, Indosat still need 'govt protection'

JAKARTA (JP): PT Telkom Indonesia and PT Indosat still need
the government's protection in managing the country's
telecommunications sector, legislators said.

"They are 50 years behind competitors, in terms of technology
and financial capacity," Burhanuddin Napitupulu, chairman of
House Commission IV for telecommunications, tourism and
transportation, said on Tuesday.

Speaking at a hearing with suppliers of telecommunications
facilities including cellular phones, Burhanuddin said it was
unlikely for the House of Representatives to let the private
sector handle a very important sector, such as
telecommunications.

"We're afraid the private sector will only take advantage of
the freedom by, for example, setting their own terms of business
in their own interest and ignoring the development of
telecommunications in unproductive areas," he said at the
hearing, which was held by the commission to listen to the
telecommunications vendors' views on the government-proposed
telecommunications bill.

The government recently submitted a telecommunications bill to
amend the existing Telecommunications Law 3/1998, which grants
exclusive rights to Telkom in providing domestic
telecommunications services and to Indosat in providing
international telecommunications services.

Telkom has been granted the exclusive rights to provide local
fixed and fixed wireless telecommunications services nationwide
until 2010 and domestic long distance telecommunications (SLI)
services until 2004.

Indosat and its joint venture PT Satelit Palapa Indonesia were
granted exclusive rights for overseas long distance services
(SLJJ) until 2005.

The law allows participation from other parties, including
cooperatives and private local and foreign firms but they have to
run in a joint operation scheme with Telkom or Indosat.

Ais Anantama Said, a commission member from Golkar Party, said
it was not customary for the government to ask for a decrement to
its own exclusive rights.

"The government's protection in the telecommunications sector
cannot be instantly eliminated," he said.

Burhan said the government, for example, should maintain
Telkom's rights in providing the SLI service until at least 2002.

"In the meantime, we have to prepare the state-owned firms by
boosting capabilities," he said at the sidelines of a public
hearing with foreign vendors on the draft revision which included
Siemens, Ericsson, Nokia and Motorola.

President director of Ericsson Indonesia, Mats H. Olsson,
praised the House's initiative to include foreign vendors in the
discussion over the proposed revision of the telecommunications
law.

"It reflects the nation's seriousness in practicing
transparency in the telecommunications sector," he said in his
written address.

Players in telecommunications need more space and incentives
from the government to allow them to anticipate the vast
progression of global telecommunications, Siemens' executive
Soenarto said.

"In this case, it will be much better if the government
focused its role only on nonpractical issues, such as policy-
making," he said.

Motorola Indonesia's president director Andrew S. Cobham said
frequent technological innovation and rapid market changes
required a regulatory regime that was flexible enough to grant
the regulator necessary leeway to adjust the rules of the game to
the ever-changing telecommunications technology.

He added what was needed by foreign investors in practicing
business overseas was clear licensing and other rules embodied in
long-term legal documents.

"The legal documents should not be easily overturned if
political conditions change," he said.(cst)