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)