Decree on fiber optics to be issued next year

Tifa Asrianti, The Jakarta Post, Jakarta | Fri, 12/19/2008 11:02 AM

Traffic congestion caused by continuous excavations will be diminished as the city administration plans to create a master blueprint of the underground optic network.

The blueprint will be part of a gubernatorial decree regulating fiber optic development.

Governor Fauzi Bowo on Thursday said the decree would be ready by the first quarter of next year.

"We want to provide better services ... There will be no more overlapping road excavation projects," he said at City Hall.

The city administration has stopped issuing permits for all road excavation projects while the regulation is being drafted.

"We do not have a verification system for fiber optic development. For the time being, we only have permits for road excavations and another permit for short-time excavation. After the decree issuance, we will use the short-time permits for fiber optic development," Fauzi said.

He said the master plan would contain calculations on future demand for traffic lights, electronic traffic control, tax transmission data and surveillance cameras that would use fiber optics.

"We will let private companies operate the fiber optic network. There will be a city-owned company involved in the fiber optic network operation, but we will treat it like a private company," he said.

Jakarta currently has a 2,221-kilometer-long fiber optic network.

Fauzi said development was previously disorganized because operators usually set up networks at the request of consumers, usually in upscale business areas.

"We even found operators applying for cable permits for what later turned out to be fiber optic projects.

"We realized that fiber optics will be needed not only by businesses, but by households as well."

Yusuf Effendi Pohan, head of public street lights and utilities, said the administration needed to anticipate fiber optic development after seeing 50 percent growth last year.

Ardi Sudarto, sales marketing manager for corporate solutions at fiber optic-based Internet service provider CBN, said his company saw the regulation as an opportunity to expand fiber optic networks to new areas.

"Perhaps the regulation is aimed at organizing the network and excavation activities. We support the decree as long as it allows us to do business and serve customers," he said.

Yusuf said the fiber optic development would help reduce the number of base transceiver stations (BTS) in the city as it could transfer data quicker than regular cable networks.

Currently, there are 3,400 BTS towers in Jakarta. The city administration plans to limit them to 800 towers.

"With fiber optics, cellular phones will have better signals," he said.

Yusuf said the administration would make fiber optics in line with ducting projects, which aim to integrate utility networks such as electrical wiring, water pipes and sewer pipes.

The 200-meter ducting under Menteng Park, Central Jakarta, is one of the ducting projects completed by the city administration.

Telkom ready to cut its telephone tariffs by 20 percent

Jakarta (ANTARA News) - State telecommunication operator PT Telekomunikasi Indonesia Tbk (Telkom) will cut the retail tariff of all of its services by an average of 20 percent when the government-sanctioned reduced cost-based interconnection tariff takes effect on April 1, 2008 , a spokesman said.

"Our telephone tariff will be reduced by an average of 20 percent. It will apply to all our services, including cellular phone (Telkomsel) and fixed wires (Flexi)," Telkom`s Enterprises and Wholesale Services Director Arief Yahya told ANTARA on Friday.

The government on February 4 announced a new cost-based interconnection tariff which implied a reduction of 20-40 percent in cellular phone tariffs and a cut of 5-20 percent in fixed-wire tariffs.

The interconnection tariff`s reduction by 20-40 percent was one of the components in deciding the collection tariff for telecommunication services.

Interconnection is the connection among telecommunication operators or termination from different operators.

Yahya added basically tariffs would drop naturally after the government had imposed the new interconnection tariff.

"Besides due to the support of the regulation, the tariff reduction will also be influenced by competition among operators and subscribers` demand and thus operators should be competitive," he said.

He added Telkom had handed the Interconnection Offer List (DPI) that would serve as reference among operators in deciding their interconnection tariff.

"We handed the DPI to the regulators on February 27 which will be used by the government as the basis to decide the ceiling tariff and lower ceiling for all kinds of communication services," he said.

President director of state-owned cellular phone operator PT Telkomsel, Kiskenda Suriahardja, said the DPI would be part of the company`s formal offering and should be known by the government to make it transparent.

He, however claimed that the tariff reduction had been implemented,reflected by features provided by the cellular operators.

President of a private cellular phone operator, PT Excelcomindo Pratama (XL) Hasnul Suhaimi said the company has reduced its service tariff since 2004.

RI`s cellular phone subscribers grow 51 pct

Jakarta (ANTARA News) - The number of cellular phone subscribers in Indonesia in 2007 rose 51 percent to 96.41 million from a year earlier, a minister said.

"The increase in the number of cellular phone and FWA (fixed wireless access) subscribers indicates that Indonesia has made remarkable achievement in catching up with other countries in the field of information and communication technology (ICT)," Communication and Information Minister Muhammad Nuh said at the launching of Indonesia ICT Outlook 2008 here Thursday.

The number of fixed wireless access and fixed phone subscribers increased to 11 million and 8.7 million respectively, he said.

The number of computer owners also rose to 2.5 million in 2007 from 1.8 million the year before, he said.

He said the number of registered Internet service users rose to 25 million in late last year from 20 million in 2006.

"It is for the first time the government officially launched the Indonesia ICT Outlook to know exactly the extent to which ICT has contributed to the country`s economic growth. The Indonesia ICT Outlook also serves as guidance for stakeholders to determine the direction of their business policies in the future," he said.

The ability to master ICT was a prerequisite to create an Indonesian community capable of boosting the economy and improving the people`s welfare, he said.

Hopefully, the Indonesia ICT Outlook would serve as an input for the global ICT rating agency to rank Indonesia, he said.

"For the umpteenth time Indonesia has been put in the lowest rank. Where did they obtain the data to do that?" he asked.

But more importantly, the Indonesia ICT Outlook 2008 was part of the government`s efforts to boost economic growth which would in the end improve the people`s welfare and reduce the number of jobless people, he said.

Telco regulators need to keep up with changes

Andi Haswidi, The Jakarta Post, Jakarta

With its high population but low telephone penetration rate, Indonesia remains among the most lucrative telecommunications markets in the world.

However, the lack of clear regulations has created confusion among operators and the public. The controversial anti-monopoly ruling recently issued by the Business Competition Supervisory Commission (KPPU) indicated that there are some things wrong in the business.

The KPPU found Singapore investment firm Temasek Holdings guilty of violating the anti-trust law by having ownership in two mobile phone operators, Telkomsel and Indosat, which jointly controlled more than 50 percent of the market.

The ruling also found the largest mobile phone operator, Telkomsel, guilty of abusing its dominant market position through a price-leadership arrangement involving Indosat that led to the excessive pricing of mobile communication services. The high prices cost consumers between Rp 14.7 trillion (about US$1.56 billion) and Rp 30.8 trillion between 2003 and 2006. The court told the company to lower tariffs by a minimum of 15 percent.

The ruling has yet to be tested in the courts, but appeals are on their way. The KPPU blamed the government in part, saying that the abuse of power would never have happened if the government had exercised its authority to safeguard competition.

The government's power in the telecommunications industry is two-sided. First, it is a market player through state-owned PT Telkom, which holds 65 percent of Telkomsel's shares, and through a golden share ownership in Indosat, which entitles it to veto power over all major decisions by the company. Second, it is a market regulator through the Communication and Information Ministry, the Directorate General for Post and Telecommunication and the Indonesian Telecommunication Regulatory Body (BRTI).

As a player, the government has been blamed for its inability to act in the interest of the public, generally by turning a blind eye to possible abuses of dominant power.

On the other hand, as a regulator, it has been known for adapting slowly to changes in the market, and often being trapped by its interest in the industry when implementing regulations.

Speaking as an analyst, Telkom's independent commissioner Arif Arryman recently raised his voice, urging the government to act faster so as to put the right policies and rules in place to prevent abuse of dominant market positions.

"The available policies and regulations have failed to keep pace with the development of services and equipment," Arif said.

For him, there is nothing wrong with companies such as Telkom having a dominant position as long as the government exercises tight control so as to avoid abuses. He said such control was currently lacking.

Also echoing Arif's concern, Indonesian Telecommunications Society (Mastel) chairman Mas Wigrantoro said that the government had made a mistake by failing to introduce a floor price for mobile phone services.

"A new player entering the industry usually seeks to grow its subscriber base by setting the lowest price possible, while ignoring the question of profitability. If minimum prices are not set, this could destabilize the industry," he said.

On the implementation front, the government has issued various warning letters to industry players this year, including to Telkom for the delay in opening its exclusive rights over long-distance calling to other players, especially Indosat, which has also entered into fixed telephone services.

Indosat received a warning for the late development of its fixed telephone network, but the government could not impose any sanctions due to a loose network development contract.

The government's weakness as a regulating body also shows in the fact that operators get away with misleading TV commercials, which, in some cases, offer cheap rates without making the terms and conditions clear.

The one piece of good news for the public this year was when the BRTI said last month that it would introduce a new set of rate formulas to cut the average cost of mobile telecommunication services by 20 to 30 percent as soon as Jan 1.

BRTI member Heru Sutadi explained that call rates here were the second highest in the Asia-Pacific region due to the variable interconnection cost for calls between operators. After considering the performance of the operators, he said, it was time to adjust rates.

Another noteworthy move by the government this year was the launch of a consortium for the ambitious Palapa Ring project in November that consists of seven companies: Telkom, Indosat, Excelcomindo Pratama, Bakrie Telecom, PT Powertek Utama Internusa, PT Infokom Elektrindo and PT Macca System Infocom.

The project, estimated to involve $300 million for the first of two implementation phases, aims to link the entire archipelago through a fiber optic network in order to bridge the digital divide in 40,000 villages that are yet connected to the country's telecommunication networks.

One setback in the effort to bridge the digital gap came when the Directorate General of Post and Telecommunication announced earlier this month that none of the tender participants for a Universal Service Obligation (USO) project surpassed the required criterion.

The USO projects, which mostly include the development of telephone networks in remote areas, are financed by funds raised from existing telecommunications operators' contributions.

The program was introduced at the World Summit on the Information Society (WSIS), held by the United Nations in 2003, which aimed to increase Information and Communication Technology (ICT) penetration by 50 percent globally by 2015.

The country's telecommunication sector has rapidly developed during the past several years with the entry of new operators in the highly competitive mobile phone market.

The government therefore needs to review existing policies keep up with the rapid changes in the industry.

Mobile-8 moves to net more customers

The Jakarta Post, Jakarta

Cellular company PT Mobile-8 Telecom, the operator of CDMA-based mobile phone service Fren, launched a wireless application system for mobile phone handsets Tuesday in another effort to meet the company's target to raise its subscriber base by 66 percent next year.

Director and chief of corporate affairs Merza Fachys said the system, called b-live, allowed subscribers to access applications such as ring tones, English dictionary, and games and information provided by a number of news portals, from Fren-ZTE C300 and Fren-ZTE C330 mobile telephone handsets.

Further development of the system in the future will allow subscribers to access such applications from other types of handsets, he said.

"With the introduction of the new system, we expect to net five million customers by the end of 2008," Merza said after the launching, adding that by the end of this year, the company expected to have around 3 million subscribers, up from 1.8 million last year.

Merza said that in addition to the new system, the company would also increase its customer base next year through the expansion of its CDMA service into fixed wireless access (FWA) networks.

"Early next year, we will launch FWA in six cities in Java and Kalimantan," he said.

At present, through 1,200 relay towers, Fren services are available in nine provinces: Jakarta, West Java, Central Java, East Java, Bali, South Sulawesi, South Kalimantan, North Sumatra and South Sumatra.

Merza said his company was also constructing 1,000 new relay masts in West Sumatra, Lampung, Jambi, East Kalimantan and Riau Islands.

During the first three quarters of this year, Mobile-8 booked a profit of Rp 55 billion, a 513 percent increase from the Rp 9 billion recorded in the same period last year. The company's gross revenue reached Rp 803.8 billion during the January-September period, indicating a 53.8 percent increase over the same period in 2006.(ndr)