The major problem faced in Repelita VI is the financing aspects. The Government has very limited fund to finance the telecommunications infrastructure. The challenge is to accomplish this without diverting the resources of the Indonesian Government from its other development needs.



Because of this, various scenarios have been developed in order to involve the private sector in Pelita VI telecommunications operators. The deregulations mentioned above are:

-Development of 2 million new Telephone Lines through Joint Operation Scheme (JOS)

-Full private sector participation in the operation of public telephones.



The Joint Operation Scheme is a mode of cooperation between Telkom and private sector in which the partner will be required to undertake full financing of the project, as well as supplying and constructing all the facilities needed.



Private participation will increase capacity to meet demand and induce competition, which will in turn raise efficiency in the telecommunication sector. The competition has come to telecommunications markets, price restructuring per line unit has followed immediately.

The company Siemens was involved in the development of telecommunications in Indonesia right from the beginning with the supply of the morse key apparatus in 1855 and has continued to be a major player in this field.





In 1989, Siemens became the market leader with more than 60%, market share of Public Communication Network in Indonesien Telecommunication Market.



Deregulation in Telecommunication Market has an impact to Siemens, especially in its marketing and also Financing Aspects. Before deregulation, Telkom was the only one Buyer of Public Communication Network Equipment. Now, after deregulation, Siemens has to market its equipment to the five winner of the Joint Operation Scheme (JOS) tender and to compete with other player (AT & T and NEC).



The objective of this case is to give Siemens recommendations and to strengthen Siemens position as a market leader of the Public Communication Network Products. Siemens together with their Indonesian partners must be ready to accept the challenge in all fields of telecommunications by being able to provide the required goods and services.



Research Locations: Siemens

Supervisor: [Wagiono Ismangil]

Accepted: 1996