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Telecommunications reform in Indonesia: Achievements and challenges

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  • Roy Chun Lee
  • Christopher Findlay

Abstract

Telecommunications reform in Indonesia has occurred in two phases. In the first, from 1989, private participation was permitted in the fixed-line sector through public-private partnership (PPP) arrangements. In the current reform phase, which began in 1999, a duopoly structure was created in fixed-line sector operations, accompanied by a pro-competitive regulatory regime. The first reform phase was not successful. This paper explains that contract-based PPP programs provided only short-term solutions to the problem of lack of capacity. The more wide-ranging 1999 reforms acknowledge the importance of competition and a sound regulatory regime in telecommunications reform, but there are still limits on market entry, and the problems of lack of interconnection and network development disparities remain.

Suggested Citation

  • Roy Chun Lee & Christopher Findlay, 2005. "Telecommunications reform in Indonesia: Achievements and challenges," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 41(3), pages 341-365.
  • Handle: RePEc:taf:bindes:v:41:y:2005:i:3:p:341-365 DOI: 10.1080/00074910500306601
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    References listed on IDEAS

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    1. Nicholas Economides, 1997. "The Economics of Networks," Brazilian Electronic Journal of Economics, Department of Economics, Universidade Federal de Pernambuco.
    2. John Vickers & George Yarrow, 1991. "Economic Perspectives on Privatization," Journal of Economic Perspectives, American Economic Association, pages 111-132.
    3. Peha, Jon M., 1999. "Tradable universal service obligations," Telecommunications Policy, Elsevier, pages 363-374.
    4. Hank Intven, 2000. "Telecommunications Regulation Handbook," World Bank Publications, The World Bank, number 15249.
    5. Mark Armstrong & Simon Cowan & John Vickers, 1994. "Regulatory Reform: Economic Analysis and British Experience," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262510790, January.
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    Cited by:

    1. Rohman, Ibrahim Kholilul & Bohlin, Erik, 2014. "Decomposition analysis of the telecommunications sector in Indonesia: What does the cellular era shed light on?," Telecommunications Policy, Elsevier, pages 248-263.
    2. 'Ofa, Siope Vakataki, 2009. "The WTO's telecommunications commitments and the credibility of telecommunications regulatory reforms in small island developing states," MPRA Paper 66184, University Library of Munich, Germany.
    3. repec:ilo:ilowps:471767 is not listed on IDEAS
    4. Tomokazu Arita & Chie Iguchi & Philip McCann, 2011. "Foreign Direct Investment, Knowledge Assets and the Economic Geography of Growth in the Asian BRIICS Countries," Chapters,in: Endogenous Regional Development, chapter 9 Edward Elgar Publishing.

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