Policy and Regulation Indonesian experiences

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Policy and Regulation Indonesian experiences

• Director General of Posts and Telecommunications,
• The Republic of Indonesia
• May 2002

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VISION

• Accelerating telecom infrastructures
• Encouraging a competitive environment
• Regulatory consistency
• Enhancing private sector investments

3
History of Telecom Regulator
Today
PTT
D.G. Postel
D.G. Postel

• Regulator
• PTT Posts, Telephone and Telegraph
• Functions
• Policy maker
• Regulator
• including operational function

• Policy maker
• Ministry of Tourism, Posts and
  Telecommunications
• Regulator
• Directorate General of Posts and
  Telecommunications
• Telecomm Services
• Basic services
• Non-Basic Services

• Policy maker
• Ministry of Communications
• Regulator
• Directorate General of Posts and
  Telecommunications
• Telecommunications
• Network
• Services
• Close-user Network

Law 5 / 1964
Law 3 / 1989
Law 36 / 1999
1989
1999
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Telecommunications Industry Structure
Services
Network
Close user
Basic Telephony
Fixed-local

• Specific use
• Individual group
• (amateur radio, KRAP)
• Government Office
• Special service
• Legal entity

• Value added services
• Intelligent network
• Calling Card
• Premium call
• Call center

Fixed-Long Distance
Fixed-International
Leased Circuits
Defense use

• Mobile-Terrestrial
• Paging
• Trunking

• Multimedia
• ISP
• NAP
• PayTV
• Internet Telephony

Broadcasting use
Mobile Cellular
Mobile Satellite
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Regulatory Issues

• Issue on Digital Divide
• Restructuring of Telecom Industry PT. Telkom
  and PT. Indosat.
• Interconnection
• Internet Telephony (VoIP)

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Issue on Digital Divide
Teledensity

• National teledensity 3
• Major cities have good teledensity
• Metropolitan Jakarta gt 40
• Other major cities (Medan, Surabaya, Bandung,
  Semarang) gt 11
• Other regions very low
• Rural areas 0.2 (66.000 villages have no
  access)

Low Resources

• Lacking domestic investment
• Lacking local telecom manufacturers
• Poor information culture

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Telecommunications Development Targets
Telecom Targets

• The Government targeted 4 million new telephone
  lines by 2004, developed respectively by
• Telkom 1.9 million lines
• Indosat 1.6 million lines
• Others 600,000 lines.
• According to the Tokyo declaration, people should
  have the opportunity to acquire access to
  information network (internet), prior to 2005.
• 20 million internet users are targeted prior to
  2004.

Information access
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Strategy for telecom development
Target for Development the adequateness of
telecom and information access

• Supported and encouraged by
• Investments Law
• Consistent and conducive regulation
• Interconnection implementation Tariff
• Regional government)

Non-commercial regions (USO)
Commercial regions (Competitive / non-USO)
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Strategy for telecom development (continue )

• Differentiate treatment between commercial
  regions and non-commercial regions (universal
  service obligations)
• In competitive/commercial regions
• The government to provide full opportunity for
  investors to participate and compete in these
  regions.
• The government is currently repositioning itself
  as a facilitator, providing the necessary
  policies and regulations to develop a dynamic and
  fair competitive environment.
• In non-commercial regions (USO)
• The government will be actively setting up
  funding strategies and the implementation of
  telecommunications development in USO areas.

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Issue on Restructuring of Telecommunications
Industry

• Current status
• Fixed Local Network Provider PT. Telkom
  (national and including local distance) and PT.
  Ratelindo (regional)
• International Network Access PT. Indosat and
  PT. Satelindo
• Simplification of telecommunication organization
  and its stake holders
• Under Law 36/1999 multi operators are allowed

• PT. Telkom and PT. Indosat respectively have
  exclusivity right issued when those made IPO.
• Restructure PT. Telkom and PT. Indosat as FNSP
  (Full Network Service Provider)
• The restructuring is prepared to face future
  competition telecom market in Indonesia.

Industry Restructuring
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Issue on Restructuring of Telecommunications
Industry
Continue

• Agenda of
• restructuring

• Telkom and Indosat as FNSPs
• Interconnection regime
• Clearing house
• Task force on Competition watch
• Universal service obligation
• Repositioning incumbent operators
• In transition to a fully competitive environment
• Early termination of voice exclusivity right
• Privatization of state-owned telecom companies
• Simplifying investment procedures
• Adjusting the Blue Print
• Repositioning of Joint Operation Scheme (KSO)

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Issue on Interconnection
Interconnection regime

• Multi networks from multi operators (are allowed
  under new Telecomm. Law No. 36/1999)
• Interconnection tariff
• cost-based
• USO contribution

Clearing House

• Interconnection among operators
• is a must
• potential to dispute
• Clearing house for interconnection traffic
• Clearing house is a regulator function
• Clearing house body
• Creating common CDR (Call Data Record)
• Independent (no operator influences)

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Issue on VoIP

• VoIP operator must be licensed (5 operators have
  been awarded)
• Many illegal operators
• Strong pressure from ISP Providers to be the VoIP
  operators
• Regulations aspect should be developed
• VoIP implementation concept
• Monitoring and evaluation the on going VoIP
  operation

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Conclusion

• Telecommunications reform in Indonesia has been
  carried out and will continue to progress.
• The key point of reform regulations should be
  implemented, consistent, credible and transparent
• D.G. Postel as a regulator should create priority
  programs periodically for the development of the
  telecommunications sector, break down barriers
  and resolve problems.
• Programs must be accompanied by proper policies
  and regulations for public services.
• National development in increasing teledensity is
  prioritized in rural areas as the key point of
  concern

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• THANK YOU

For further information, please visit our web
site http//www.postel.go.id