Thu, 03 Aug 2000

Telkom, Indosat welcome move to remove monopoly

JAKARTA (JP): Publicly listed state-owned telecommunications companies PT Telkom and PT Indosat welcomed on Wednesday the government's decision to terminate their monopoly over the sector in 2002 and 2003, ahead of the original schedules of 2010 and 2004 respectively.

Both companies said they were upbeat about their future prospects despite the removal of their exclusive rights in the country's telecommunications sector.

According to the two companies, the measures which would allow them to serve both international and local call services would give them much wider business opportunities.

Indosat president Hari Kartana said his company was ready to expand into the local and domestic long distance telephone services to compete with Telkom, which currently dominated the sector.

"We are now on the process of preparing ourselves by building our competency and restructuring the company's organization so that by the time the new industry structure is adopted, Indosat will be ready to become a Full Network and Service Provider", he said.

He said Indosat would in the initial stage use cellular technology to compete with Telkom in the domestic telecommunication services.

He said Indosat had also set up the basis for a high quality worldwide network with its submarine cables linked to more than 35 countries in the world which will be used as supporting infrastructure for the new businesses.

On Tuesday, the office of Directorate General of Post and Telecommunications announced in a press conference the government's plan on Tuesday to speed up the termination of the monopoly awarded to Telkom and Indosat.

Telkom's director of operations and marketing Komarudin Sastrakoesoemah said the early termination of its monopoly would unnecessarily damage its business.

However, he corrected the period of termination in the directorate general's written statement. He said the statement was misleading and contradictory to the commitment mentioned earlier by the government.

He said the government had earlier affirmed that it would not terminate Telkom's monopoly on local and domestic long distance calls at the same time, but would terminate local calls in 2002 and domesticlong distance calls in 2003.

"We have sent an official letter to complain about the matter. We've talked to the director general and he admitted that the office's statement contained false information," he said.

According to the press statement, the government will lift Telkom's monopoly in local and domestic long distance call services at the same time in 2002, ahead of the original schedules of 2010 and 2005 respectively.

While Indosat's monopoly in the international telephone call service, which it shared with subsidiary PT Satelindo until 2004, will be nullified one year earlier in 2003.

In return, the government will award Telkom with a provisional license to operate international telephone call services this month and later will provide it with the permanent license in August 2003.

The government will also award Indosat with a provisional license for local and domestic call services this month, while the permanent licenses will follow in August 2002.

Komarudin said he was optimistic that Telkom would be able to maintain its position as the dominant operator for the fixed line-based local telephone service while at the same time developing new businesses in the wireless and international telephone services.

Telkom, which now serves more than 6.18 million customers, will transform itself into a giant telecommunications operator with various services including Internet and multimedia, he said. (cst)