TEMPO.CO, Jakarta - Communications and Information Minister Rudiantara is back dealing with telecommunications operators, a world he was involved in before he joined the government. This time around, he has to straighten out the issue of lower interconnection rates, or tariffs on linkups among operators.
Rudiantara's ministry recently proposed setting the interconnection reference rate at Rp204 per minute of telephone calls, down from the previous rate of Rp250. Rudiantara said he proposed these cuts to the cellphone operators back at the start of last year.
Most cellphone operators welcomed the tariff reduction, but others objected, reasoning that they still had to build the infrastructure in many places and that the technology they used were new.
In the end, the government postponed the plan to lower the rates, which was initially to become effective on September 1. "I am not the minister to only operator A or B, but to all operators," said Rudiantara defensively.
Two weeks ago, he met with Tempo reporters Raymundus Rikang, Ayu Prima Sandi, Efri Ritonga and Sapto Yunus at his office in Central Jakarta for a lengthy interview. Rudiantara was enthusiastic about all the new developments in the world of telecommunications, like the 1,000 Digital Startup Program, which managed to get Alibaba boss Jack Ma as an advisor to e-commerce Indonesia, and other issues, like extending the broadcast licenses of misbehaving television stations.
How did you deal with operators that object to the government's plan to lower the interconnection rates?
Interconnection is the customers' right. The business is now in the competitive arena, where operators compete with each other. Interconnection happens only in the old technology context, known as the circuit switch. We have now entered a new era of technology, based on data, known as the IP switch. So actually, there is no longer an interconnection problem, especially given that the Palapa Ring (satellite) has become almost perfect.
How many operators called for rates lower than Rp204 per minute, compared to those demanding an increase?
The tariffs are routinely reviewed. Data shows that since 2008, they have been relatively flat, decreasing only by Rp1. On the other hand, the technology used to calculate interconnection tariffs has been around since 1995 and they are sure decrease drastically. Hence, the need to consider the new technology. If there are operators asking for higher rates, where's the logic in it?
Their excuse is that they are still building the infrastructure in many areas and that the technology they use is new.
The same thing. Do they think the government is not building infrastructure? Logically, if they were building new networks, should their estimates include interconnection? No. The calculations should consider using data.
So it's time to revise those rates?
It's done every two years. It falls on this year. Since early 2015, I warned the operators that interconnection rates would be lowered significantly. Interconnection is actually a cost component for operators. If the rates go down, the industry will become more efficient.
Some operators claim the lower rates will cause losses in the trillions of rupiah?
Each year, interconnection revenues keep going down, as the data come in. According to my calculations, based on those numbers, they have been losing for about 25 years anyway. Where was the technology in all that time?
Some people say you favor certain operators.
That means I need to communicate more and better. But I was once director at Telkomsel and XL, as well as commissioner at Telkom and Indosat. I once asked all the operators to engage in public discussions. I noted down everything they said and documented them.
When you were on the side of the operators, the telecommunication business was still developing, while today, it seem to be going down with the sunset.
No, no. You're welcome to check it out. Our economy is growing at 5 percent. The growth of the communication sector has always been above economic growth. Last quarter, it was about 8 percent. We only lag behind banking and finance (sectors). Who says it's going out with the sunset?
What will be the impact of lower tariffs on the consumers?
Some rates will be lowered fast, others will be slower. Some will play around with it first. In the future, the rates will favor the consumers. But I don't want too cheap tariffs either because operators would get no funding to maintain their infrastructure. I would never ask operators to build them in remote areas.
Recently, there was a petition on change.org pressuring you not to extend the broadcast licenses of some television stations.
There are nine television stations whose licenses will expire on October 16, while others will run out in December. As for their content, please ask the Indonesian Broadcasting Commission (KPI). Under the broadcast law, it is clearly regulated that the KPI is responsible for content oversight. So far, however, there's been no negative reports on private television stations.
What will happen to the owners of television stations that clearly use public frequencies for political interests?
They just need to submit a document promising not to do it again. We must look forward, never look back. We don't want to be a nation of 'rearview' mirrors. (*)
Read the full interview in this week's edition of Tempo English Magazine