Tariffs are determined by the operator but remain Government controlled. Part of the new legislation allows Indosat to enter the fixed-line market designated to improve this low figure. Telkom retained responsibility for two regions. However, with the introduction of the new legislation the status of the KSO agreement remains unclear. The main issue being the compensation scheme for the KSO investors for the loss of exclusivity.
More detailed information is available separately.
Satelindo, a joint venture whose a shareholders who include Telkom, Bimagraha Telekomindo, Deutsche Telekom and Indosat, commenced international services in August 1994. The IMF Letter of Intent includes reference to further privatisation and therefore the Government are still under pressure to push privatisation of one or both of the state-owned telecommunication companies. However, the ongoing debate about a merger of the two companies still continues. Supporters of a merger insist that the Government must create a strong Indonesian telecommunications company, that can compete in the world market, before further privatisation programme is available separately. There are seven mobile cellular service providers in Indonesia.