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)