Telkom's poor services, marketing criticized

Telkom's poor services, marketing criticized

JAKARTA (JP): Minister of Tourism, Post and Telecommunications
Joop Ave warned the state domestic telecommunications operator,
PT Telekomunikasi Indonesia (Telkom), to improve its marketing
strategy and service or lose out as competition gets rougher.

"Competition in the telecommunications industry has just
begun," Joop warned at the opening of a conference on improving
the quality of telecommunications services yesterday.

"The government recently licensed a number of private firms,
such as PT Satelindo, to operate Global System for Mobile
Communications telephones," he said, emphasizing his point.

He added that even though the successful call ratio has been
increased this year, lots of telephone lines have yet to be
marketed.

"This year the rate of the successful call ratio for local
calls has increased by 11 percentage points to 50 percent and
long distance calls by 14 points to 40 percent," he said.

In addition, the firm reduced the rate of out-of-order lines
to 1.9 per 100 customers from 2.7 in 1993, he said.

Joop expressed concern, however, that only 2.5 million of the
3.7 million telephone lines Telekom will have installed by the
end of the year have been sold.

"The main problem lies in the marketing strategy. Telkom is
capable of constructing infrastructure and installing telephone
lines, but incapable of marketing the lines," he said.

He also complained that the fiber optic telecommunications
system linking Jakarta and Surabaya in East Java is poorly
utilized.

"Of the total 11,940 channels provided, only 5,700, or 47
percent, have been utilized," he said. "The successful call ratio
depends on their optimal utilization."

Cellular phones

Joop warned Telkom to wake up to the fact that five million
telephone lines are to be installed in the next five years, of
which two million lines will be prepared by private companies.

Telkom will have to market at least 80 percent of the lines to
be installed every year, he said.

He said one million Global System for Mobile Communication
telephone lines also will be installed in the coming five years.

The government recently licensed Telkom to set up a joint
venture, called PT Telkomsel, to operate the mobile system
telephones for nationwide coverage. The venture will be 55
percent owned by Telkom and 45 percent by PT Indosat, the state-
owned international telecommunications operator.

Telkom operates the mobile telephone system on Batam Island
and surrounding isles in Riau. Satelindo, partly controlled by
Telkom, runs the mobile telephone system in the greater Jakarta
area.

Telkom, which employs 43,000 people throughout Indonesia, is
expected to float its shares domestically and internationally
next year following the success of Indosat in selling its shares
domestically and in New York.

Telkom, with total assets of Rp 6.87 trillion as of the end of
last year, is projected to make a before-tax profit of Rp 500
billion this year. (icn)