INDONESIAN TELECOMMUNICATIONS REGULATORY BODY BRTI

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INDONESIAN TELECOMMUNICATIONS REGULATORY BODY
BRTI

Denpasar, 1 - 2 March 2004 APT- Sub Regional
Seminar on Trade and Telecommunications
Koesmarihati, Telecommunications Regulatory
Committee Member
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Background (1)

• There has been paradigm shift in
  telecommunications
• Old Paradigm New Paradigm
• As public Utility As commodity
• Monopolistic Market Competitive Market
• Basic and non-Basic Network and Services
• Separate Network Convergence
• Analog/Digital Digital
• Circuit Switched Towards IP
• Dominated Wire line Wireless Line
• Distance Sensitive Distance Incensitive

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Background (2)

• Lowest telecommunications density in the region
• Telephone density of fixed line is about 4 and
  mobile is 8,5 , while in Apectel 28 stated that
  total telephone density in developed countries is
  more than 100 and in developing countries is
  less than 50
• 39 districts capital and 64 villages has not
  got telecommunications facilities
• Internet users is still under 8

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Background (3)

• Since 1996, telecommunications development is no
  longer receive state budget
• Indonesian commitment in International agreement
• WTO Agreement on Basic Telecommunications 1997
• Tokyo Declaration 2000
• APEC- Bogor declaration 1994
• WSIS Geneva , Dec 2003

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Background (4)

• SIGNIFICANT EVENT IN INDONESIAN TELECOMMUNICATION
  REGULATION AND INDUSTRY
• Introduction of Law No 36 year 1999 in
  telecommunications giving signal that
  telecommunications in Indonesia is entering the
  full multi-operator market
• Cellular mobile business has started to be
  competitive market since early 90s and shows
  remarkable growth The same with internet
  business which started in late 90s
• Early termination of exclusivity right for PT
  TELKOM for fixed local and long distance and
  exclusivity right for PT INDOSAT for
  international and both becoming Full Network and
  Services Providers for fixed local, long distance
  and international
• Local exclusivity right from originally Dec.
  2010 to August 2002
• Long distance exclusivity right from Dec. 2005 to
  August 2003
• International exclusivity right from Dec 2004 to
  August 2003
• Note In actual not yet implemented, schedule
  soon.

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Background (4)

• Consumers require choice of operators with
  variety of services with good quality and
  reasonable price
• NEED REGULATORY BODY WHICH IS TRANSPARANT,
  INDEPENDENT AND IMPARTIAL TO ALL OPERATORS to
  GIVE HEALTHY COMPETITION.

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REGULATORY BODY

• Stated in the Law No. 36/1999, article 4
  (explanation)
• The Telecommunications Minister could delegate
  regulation function to a Regulatory Body
• Ministerial decree no 31 year of 2003
• Establishment of Badan Regulasi Telekomunikasi
  Indonesia
• (BRTI) Indonesian Telecommunications
  Regulatory Body
• To secure transparency, independency and
  fairness in telecommunication Network and
  Service operations
• Effective from 5 January 2004
• As the transitional Body toward full Independent
  Regulatory Body .

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Organization Structure (1)

• BRTI consists of Telecommunications Regulatory
  Committee Members (of five) and Directorate
  General Posts and Telecommunications
• The Committee members consists of a chairman
  which is Director General of Posts and
  Telecommunications and 4 experts in technical
  (telecommunications IT) , legal, economics and
  social.

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Organization Structure (2)

• The 4 experts members were selected through
  independent selection team
• The Committee Members are elected for two years
  term, which can be extended one more term if
  necessary

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Indonesian Telecommunications Regulatory Structure
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Decisions

• The decision of BRTI is implemented by the
  Committee members collegially. In case no
  consensus reached, voting is taken by the
  Committee members with equal voting right
• In carrying out its task, Committee members is
  independent from power/influence of other
  interest.
• Each Committee decision has to
• go through process considering input in the form
  of opinion and thought which developed within the
  community
• To secure transparancy, independency and
  fairness.
• The BRTIs decisions are in the form of
  Ministerial or DG decree.
• BRTI reports to Minister of Transportations and
  Economies.

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Regulatory functions (1)

• Regulatory functions consists of Regulation,
  Supervision and Control of Telecommunications
  Network and services Operation
• Regulation, consists of
• Licensing
• Standard operation performance
• Standard quality of service (QoS)
• Interconnection tariff
• Standard telecommunications tools and equipment

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Regulatory functions (2)

• Supervision of
• Operational Performance
• Competition safeguard
• Utilization of telecommunications tools and
  equipment
• Control of operation of network and service
  operators
• Settlement of dispute between operators
• Utilization of telecommunications tools and
  equipment
• Utilization of tools and eguipment

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Working Mechanism

• Problems listing
• Rebalancing Tariff
• Competition Safeguard
• Operation Performance Standard
• Quality Service Standard
• Interconnection
• Tools Standardization
• Spectrum allocation
• USO
• International Standardization
• Etc.

Method - Data collection - Dialog FEEDBACK BENCH
MARKING SOCIALIZATION

• Product
• Regulation
• Rules of The Game
• Signed by Ministry/
• Director General of Post
• Telecommunication

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BRTI Stakeholders
Government
Industry
Community
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Ideal Independent Regulatory Body

• IRB will be most effective if not only
  independent , transparent, but very importantly
  to be legitimate and have the law enforcement
  toward its decisions
• The followings are the weakness and strength of
  the current Indonesian Regulatory Body, as
  compare with the international best practices.

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Weakness Strength of Indonesian Regulatory Body
(1)

• Weakness
• The existing BRTI do not have strong legal based
• BRTI is funded from State Budget which is part of
  DGPTs budget, caused bureaucracy and less
  independency
• The Chairman of BRTI is the Director General of
  Posts and Telecommunications, and BRTI consists
  of DGPT and Committees. Giving confusion on when
  as part of the Regulator (BRTI) or when is part
  of the Ministry.
• Often decisions is still waiting for signature
  from the Minister.

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Weakness and Strength of Indonesian Regulatory
Body (2)

• Strength
• Four of five Committee Members were selected from
  various field of expertise and sources (public,
  private, academics and practitioners)
• Decision is made collegially among the five
  members
• Do not have to work from a scratch, BRTI can
  collect the work already initiated by DG POSTEL
• A start for ideal Independent Regulatory Body
  (IRB).
• Even in Asia Pacific, there are only 37
  countries have an IRB. There is no rules how is
  IRB should be structured

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The Growth Born For Regulators
Source ITU World Telecommunication Regulatory
Database
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Conclusions

• Indonesian telecommunications is leaving the
  monopolys market to become multi-operator
  market
• In the recent years , the growth of Cellular
  mobile and internet, which are competitive from
  the start, give an excellent growth
• However, the total penetration of fixed telephone
  lines and wireless mobiles is still the lowest in
  the region
• In his effort to create healthy competition for
  industry to grow, with the most participation of
  public and the privates the Indonesian
  Telecommunications Regulatory Body (BRTI) is
  established
• Even though this BRTI is still have many weakness
  , hoping as an embryo to become ideal Regulatory
  Body which can support the industry to grow and
  increase the welfare of the nations,

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Thank you
BADAN REGULASI TELEKOMUNIKASI (BRTI) Jiwasraya
Building, Jl. R.P Soeroso No. 41, Menteng Jakarta
10350 Tel. [phone] Fax. 6221
3908020 Email koesmarihati_at_cbn.net.id
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Growth Cellular vs. Fixed