report no. 7u2-1nd indonesia telecommunications sector...

Report No. 7U2-1ND

IndonesiaTelecommunications Sector Study(In Two Volumes) Volume 'I: The Annexes

June 25, 1990

Asia Country Department VFOR OFFICIAL USE ONLY

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CURRENCY EQUIVALENTS. 1988

-.arrency Unit = Indonesian Rupiah (Rp)

US$1 - Rp 1,700Rp 1.0 million - US$588

GOVERNMENT OF INDONESIA FISCAL YEAR

April I-March 31

PERUMTEL FISCAL YEAR

January 1-December 31

WEIGHTS AND MEASURES

setric

This study of the Indonesian telecommunications sector Is based on thefindings of a mission that visited Indonesia in November and Der-ember 1988 andin April 1989. The mission ronsisted of A. Shanmugarajah, J. C6wie.C. Ramsay, P. Smith, T. Takama, L. Backlund (consultant), P. Holm (consultant)and K, Lindquist (UNDP/ITU). The study also draws on several reports, Inparticular the 'Republic of Indonesia Study Report on Long Term Planning forDevelopment of Telecommunications System3 published in 1987 by the JapanInternational Cooperation Agency.' The aOsistance provided by PERUMTEL andMTPT Zor the preparation of this report and comments and suggestions providedby several roviewers* are gratefully acknswle4ged.

* D. Joshi, T. Nulty, S. Sathar, E. Sharon, &.\Welleuius.

FOR OMCIL USE ONLY

INDONESIA

TELECOMHUNICATIONS SECTOR STUDY

VOLUME Its ANNEXES

Table of Contents

Page No.

A. Telecomnnmications-related Legislation 1

B. PERUMTEL Institutional Strengthening 10B-It Organization and Management

Attachment 1: PERtMTEL--Ccllected Base Data on 18Organization and Management

Attachment 2t INDOSAT--Comparative Notes on 21Organization and Management

B-2s Human Resources Management 24

C. Proposed Corporate Planning Process--Interactions between 28PERUMTEL and Government Department and Agencies

D. PERUMTEL's Tariff 36

S. Statistical Annexes 41E-ls Financial Statements of Sector Entities, Performance 42

Indicators, and Existing Facilities and ServicesE-2s Long-Distance Call Analysis 553-3: Delays in System Commissioning 59E-4s Repelita V Investaent Program 60E-3s Human Resource Data 63

This docunnt ha a resicted distribution i6d may be Used by recipients onty in the pcrfonnuxeof their ftiale dutioeL Its contents may not otherwise be disclosed without World Bank authodzation.

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TELECOMMUNICATIONS SECTOR STUDY

Tolecommunications-related Legislation

1. Act No. 5 Year 1964

2. Govt. Regulation No. 9 Year 1969



5. Presidential Decree No. 44 Year 1974



8. Presidential Decree No. 15 Year 1984


10. New Law (to replace Act No. 5 Year 1964)

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1. ACT NO. 5 YEAR 1964

Enactment of the Government Regulation as replacement of Act No. 6 Year 1963.

This is the basic legislation that governs telecommunications andestablishes government authority over the sector. It is to bereplaced by proposed new legislation.

Important Provisions

Article 2:Telecommunication shall be controlled, organized and arranged(regulated) by the Government.

Article 5:Telecommunication tariffs and conditions of use by the publicshall be established by government regulatior.

Article 23:A Telecommunication Board consisting of government officials andmembers of the National Front is established.

2. GOVT. REGULATION NO. 9 YEAR 1969

Confirmation of Govt. Regulation as replacement of Law No. 1 Year 1969concerning the forms of state business.

3. GOVT. REGUIATION NO. 22 YEAR 1974

Telecommunication for the Public. (This is amended by Govt. Regulation No. 53Year 1980).

Important Provisions

Article 2:The State Telecommunication Public Corporation is appointed asthe sole undertaking body authorized to operatetelecommunication for the public.

Article 4:The tariff structure is defined: it consists of (a) Basictariff and (b) Special tariff.

Article 5:The basic tariff shall be stipulated by the Minister ofCommunications. The special tariff &hall be stipulated by theBoard of Directors of the State Telecommunication PublicCorporation.

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Article 10:Radio frequency allocation for public telecommunications shallbe conducted by the Minister.

Article 12:The State Telecommunication Public Corporation has the rightsand competencies for the importation, control and possession oftelecommunications sets to be installed, operated ar.d used inoperating telecommunication for the public.

Article 13:The basic provisions concerning the requirements/conditions andprocedure of telecommunication operations for the public shallbe stipulated by the Minister of Communications.

Article 15:Matters not yet sufficiently regulated in this GovernmentRegulation shall be further regulated by the Minister ofCommunications.


Public Enterprise Telecommunication. (Amended by Govt. Regulation No. 21Year 19&:)

Imiortant Provisions

Article 1:The existence of the State Enterprise Telecommunication iscontinued and its status is changed to Public Enterprise (PERUH)called Perusahaan Umum Telekomunikasi (Public EnterpriseTelecommunication) abbreviated to PERUNTEL.

Article 3:The company conducts telecommua.ication for the public, for homeand international communication with telegraph, telephone,telex, picture telegram and other telecommunications facilitiesby observing Government policy in this field.

Article 4:The Company domiciles and has its Head Office at Bandung. Achange in the demicile and head office of the company is decidedby the President based on a proposal from the Minister.

Article 5:The purpose of the Company is to construct, develop and operatetelecommunication for the public with the intention to smoothencommunication in the society to support the State development inrelation with the improvement of national endurance andachieving a just and prosperous society.

_4 _ANNEX -APage 4

Article 6:By observing economic principles and securing the safety ofState property, the Company will conduct the followingactivities...

Article 7:The capital of the Company is the property of the State. It isseparated from the Income and Expenditures of the Sta..e Budgetand are not divided into shares. All liquid assets that are notimmediately needed by the Company shall be kept in a state-ownedbank appointed by the Minister.

Article 8:Expenses (funds) for investments carried out by the Company cancome from: (a) Company's internal fund; (b) State participationthrough Expenditures and Income of State Budget; (c) Loan fromlocal and/or abroad; (d) other legal sources.

Article 9:The Company can acquire and use funds received from developingits business through issuance of obligations and other legalpapers.

Article 10:The composition of tariffs is based on the principle ofobtaining sufficient income to cover all costs for theoperation, calculated in accordance with Govt. Regulation No. 22Year 1974.

Article 11:The Minister decides the general policy concerning the purposeand field of operation of the Company and generally controls theoperation of the company.

Article 12:The Company is led and managed by a Management which consists ofone President Director and a maximum of SiX Directors.

Article 15:Tasks and authorization of the management include: to lead,manage and run the Company in accordance with its purpose andalways try to improve efficiency and effectiveness of theCompany; to prepare, on time, a yearly work program for theCompany, complete with its budget.

Articles 16 and 17:Members of the Management are Indonesian citizens. They areassigned and discharged by the President on the proposal of theMinister. Members of the Management are assigned for five yearsafter which they can be reassigned. In certain circumstancesthe President, on the proposal of the Minister, can dischargemembers of the Management before the expiration of the five yearappointment.

-5 ANNEX APage 5

Articles 21 and 22:Accountancy and budget matters.

Article 23:Periodic report on the business results and the Company'sactivities shall be sent tc Minister according to theprocedure and time determiner by thb Minister.

Article 24:Annual calculation report (balance sheet, profit and loss).

Article 25:Utilization of profit.

Article 26:Personnel. It is necessary to create a good working atmospherein the company by giving proper compensation and work incentivesto all personnel in the company.

5. PRESIDENTIAL DECREE NQ. 44 YEAR 1974

Main Points in the organization of a department.

This decree provides a generic specification of governmentdepartments including the rol,s of the Minister, SecretaryGeneral, Diroctor-General and Inspector General.

6. GOVT. REGUlATION NO. 53 IEA= 1980

Amendment of Govt. Regulation No. 22/1974 on Telecommunications for thePublic.

This regulation amends Govt. Regulation No. 22/1974 byspecifying that the State Telecommunications Public Corporationis to be responsible for public domestic telecommunication andPT Indosat is to be responsible for public internationaltelecommunication.


Procedures for establishment and control (guidance and superv'sion) ofDepartmentr.l Agency (Perjan), Public Corporation (Perum) and Public/StateCompany (Persero).

Imeortant Provisions

Article 2:The PERJAN (service enterprise) provides services for the publicbenefit.

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The PERUM (public enterprise) provides services for the publicbenefit in addition to gaining profits.

The PERSERO (an enterprise with shares) has an objective inobtaining profits and has an activity in the fields that cansupport private sector and/or cooperatives and outsideactivities of PERJAN and PERUM.

The aim and purpose of the activities of PERJAN, PERUM andPERSERO include:

- Contribute to the development of the State economy andincome.

- Cultivate profits/income.- Arrange public benefits in the form of quality and adequate

goods and services.

Article 4 - PERUK:The guidance of PERUM shall be carried out by the Ministerassisted by the Director General.

Article 5 - PERSERO:The fostering of State's assets invested in the PERSERO shall becarried out by the Minister of Finance as the shareholder. In theGeneral Meeting of Shareholders, the Minister of Finance shallauthorize the Minister or an official he will appoint. Suchdelegation of authority shall not apply to the appointment anddischarge of members of the Board of Directors of PERSERO.

Article 7:To achieve harmony in the financial guidance of PERSERO, theMinister and the Minister of Finance shall coordinate and consultfor the Shareholder General Meeting and with respect to otherimportant problems concerned with guiding and managing thePERSERO.

Article 14:Appointment and discharge of President Director and Board ofDirectors shall be carried out as follows:- President Director and Directors of PERUM by the President

at the Minister's proposal after hearing the considerationof the Minister of Finance.

- President Director and Directors of PERSERO by the Ministerof Finance at the Minister's proposal.

Article 24:In each PERUM shall be formed a Supervisory Board to beresponsible to the Minister.

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Page 7

Artlele 33:The PERUN's Supervisory Board shall comprise the officials of thetechnical ministry concerned, of the Ministry of Finance and otherministries/offices whose activitie3 are related to the PERUM.

Article 34:In each PERSERO shall be formed a Board of Commissionersresponsible to the General Meeting of Shareholders/Ninister ofFinance.

Article 44:The PERSERO's Board of Commissioners shall comprise the officialsof the technical ministry concerned, of the Ministry of Financeand other ministries/offices whose activities are related to thePERSERO or other officials recommended by the Minister of Finance.

8. PRESIDENTIAL DECREE NO. 15 YEAR 1984

Department Organization Chart (replaces Presidential Decree No. 45 Year 1974)Chiapter XIX sets out the organization of the Department of Tourism, Post andTeleco aunication.


Concerning the Telecommunication State Public Company (Perum Telekomunikasi).Amends Govt. Regulation No. 36 Year 1974

Imoortant Provisions

Article 3:The Company shall be the sole undertaking body having competenceto implement domestic public telecommunication.

Article 4:r Company shall have its domicile and head office in Bandung.This may be changed if stipulated by the President on the proposalof the Minister.

Article 5: Nature, Aims and ObjectivesThe nature of the Company shall be to provide services for thepublic benefit and simultaneously gain profits based on theCompany's management principles.

The aims of the Company shall be to provide public benefits,consisting of valuable and appropriate services for thefulfillment of the needs of life of many people, as well asactively participate in executing and supporting theimplementation of the Government policy and programs in the fieldsof economy and development in general.

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The objectives of the Company are to build up, develop andendeavor in order that telecommunication can be applied for thepublic in the home country in the broadest sense of the word andto increa-.e the smoothness of community relations and to supportthe realization of the national development.

Article 6:By observing the economic principles as well as guaranteeing thesafety of the State property, the Company shall perform thefollowing undertakings...

Article 7 - Capital:The capital of the Company shall be State assets, separated fromthe State Revenues and Expenditures Budget, and shall not bedivided into shares.

The Company may increase its capital by funds formed and fosteredin the Company.

The Company shall not keep silent or secret reserves.

All liquid assets which are not directly required by the Companyshal be deposited at State-owned Banks, approved by the Minister.

Articles 8 and 9:Financing for investment.

Articles 12 and 13:Management.

10. NEW TELECOMMUNICATIONS LAW (L989M

Concerning Telecommunications (to replace Law No. 5 Year 1964)

This new legislation is the basic law governing telecommunications inIndonesia. The most significant change from Law No. 5 Year 1964 is thatPERUNTEL's all-embracing monopoly on the provision of all domestictelecommunications services is modified to permit the provision of"nonbasic" telecommunications services by other entities even withoutthe cooperation of PERUMIEL.

Imoortant Provisions

Article 4:The promotion of telecommunications is carried out by the state.

Article 5:The Government determines policy (includir.g regulation, directionand promotion) in the field of telecommunication.

-9 - 9 - ~~~~ANNEX APage 9

Article 6:The Minister will act as the managing official responsible for theadministration of Indon&sis telecommunications.

Article 7:The use of :adio frequency spectrum and geostationary orbit issubject to government regulation.

Article 12 - Telecommunications Management:The organization of telecommunications services is done by theState and carried out by the Government which can further delegateit to an organizing agency. A differont agency can be appointedto organize the basic telecommunications services on the basis ofcooperation with the organizing agency, while the organization ofnonbasic s,.vices can be carried out without cooperation with theorganizing agency.

Article 14:International telecommunications agreements need the Minister'sapproval.

Article 17:Tariffs for telecommmuniations tariffs are stipulated byGovernmental Regulation.

Article 25:The organizing agency shall be the holder of authority over thearrangement of telecommunications services.

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B

PERMTE INSTITUTIONA STRENGTHNING

Table of Contents

B-1: Organization and Management

Attachment 1: PERUMTEL--Collected Base Data on Organization andManagement

Attachment 2: INDOSAT--Comparative Notes an Organization andManagement

B-2: Human Resources Management

- 11 - ANNKX B-Page 1

INDONESIA

TELECOMMUNICATIONS SEGTOR S

Organization ancLanayement

A. Decentraligati-n and Reorganization. Background material

1. In order to gain a reasonable understanding of the current sharingof responsibilities and scope of delegation between PERUM¢EL headquarters andthe regions, visits were made to the regional headquarters in Jakarta (WitelIV) and in Denpasar (Witel VIII). The remarks given below summarize theanalysis and conclusions drawn from these discussions. The presentorganization structure of PERUNTEL is shown in Figure B-1.

Susmmar of Discussions-with Witels IV and VIII gon Decentralization

2. In practice, all development projects are planned and managed by theDevelopment Directorate at Headquarters. Management and decision makingprocedures are very detailed and extend even into daily routine matters. Theplanning process is slow and controlled by pointlessly cumbersome regulations.Network planning, for example, is based only on actual applications fortelecommunications services and does not anticipate upcoming demands even whenthey are known. Once the process has begun, it is inflexible and does notallow for changes in the environment, i.e. new hotels and other buildings,commercial centers, etc. Elapsed time from start of planning to start ofproject implementation can be as long as three years, and the time to projectconclusion can be as long as five years. Minor works that presently have anoverall cycle of up to five years could be completed under local authority inone year.

3. Regional staff are responsible for operations, but development workand certain kinds of maintenance are carried out by local contractors. Evenin emergency situations (e.g., when buried cables are cut during roadbuilding), regulations require that repair be put up for competitive biddingif the estimated cost is more than approximately US$500 equivalent. Thiscauses major delays.

4. For local procurement, the official limit for contracts signed bythe regional offices is US$30,000 equivalent beginning January 1, 1989. Inpractice, all contracts have to be approved by headquarters before signature.

6. The President Director of PERUMTEL has made decentralization one ofthe top priorities for the coming years. During meetings with regional staff,the following issues were highlighted as key elements in decentralization.

(a) Reorganization of the Directorate of Development. The presentheadquarters staff responsible for regional development projectsshould be moved to the regions. The regional offices must have

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Page 2

planning experts in telecommunications, network engineering, civilworks, outside plant, and power/electricity. The regions must alsohave the capabilities necessary for procurement and implementationof new development projects.

Headquarters should change from being the implementing body to beinga central network planning and coordinating body. The formulationof necessary common standards will also be performed centrally.

(b) Reorganization of the Human Resources Directorate. Decentralizationof HR management would foc'ssbheadquarters activities on strategicplanning, and distribute operational, administrative tasks outcloser to the job locations.

(c) TrainJin of Personnel. Personnel must be trained in adequatenumbers and to adequate levels for both technical and managerialtasks, and regional training facilities should be better utilizedfor this purpose.

(d) CgmpSerization. Computerization is urgently needed in the regionsfor maintaining subscriber information data bases, marketing,general information services and outside-plant documentation. Muchof this is now done manually.

(e) Delegation °f Authority. The anticipated rapid growth of thetelephone network will require delegation of authority to lowerlevels. The current, centralized system will inflict extremeworkloads on a few individuals.

(f) ateer, Planning. There is a perceived concern by local staff thattheir career opportunities will be seriously restricted whenadditional qualified personnel are brought into the regionaloffices. Restructuring must be accomplished in a way that allowspeople to retain an acceptable career path.

B. Possible Reorganization of the DeveloDment Directorate

6. The present Development Directorate organization is shown inFigure B-2. Figure B-3 shows a possible intermediate step towards a fullydecentralized organization. The regions have been grouped together into 5zones, as compared with a 12-region solution, which puts fewer demands on thelimited supply of skilled personnel, who have to be trained, recruited ormoved from headquarters. In this example, each zone carries responsibilityfor its own development programs, and a central coordinating unit supports thezones. Nationwide planning and certain nationwide services (i.e., satellitecommunications) are also centralized.

C. Possible Reorganization of the Human Resource MSnaMement Function.

7. The human resource management (HRM) function would be adecentralized operation, and the corporate headquarter's Directorate for HumanResources would provide direction and strategy throagh documented policies and

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PERUMTEL: Possible Reorganization of the Development Directorate

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ANNE B-1Page 3

procedures. An integrated approach to HRH is emphasized in which regional andcentral HRM efforts contribute interactively to organizational objectives.

8. A major part of the HRM structure is the training function. Mosttechnical and operational training would be decentralized to regional trainingunits. Management training would be done in a dedicated managementdevelopment center. Training development and quality assurance, includinginstructor development, would be done in a training resource center.Initially, all three central training institutions would be kept together andrun by PUSDIKLATTEL (the present training center in Bandung); later they couldbe separated into discrete organizational units. Overall coordination oftraining activities would be the responsibility of the training manager in theHRH Directorate. Most administrative processing and information flow betweenthe central and regional units would be carried via the HRM information systemand its associated computer network. An outline of the proposed organizationis shown in Figure B-4.

D. Infrastructure SuDDort for Decentralization

9. It is also recommended that an information center be establishedwithin PERUMTEL to provide end-user svpport and training in the use ofinformation technology, and to assist in software and hardware acquisition andstandardization. The information center would include user-support centers atPERUMTEL headquarters and in the regions. The information center would beresponsible for the corporate network and electronic mail system forcommunication between line management and regional and central management.

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PERUMTEL: Possible Reorganization of the Human Resources Directorate

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-18- ANNEX -1Attacbment 1Page 1

TELEONNWMCATIONS SECTOR STUDY

PERUMTEL: Collection of Base Data on Organization and Manazement

1. Genegal. PERUMTEL is the major domestic telecommunications serviceprovider in Indonesia with a monopoly in the provision of "basic" domestictelecommunications services. It is a "PERUM," i.e., a state-owned civilservice enterprise providing public utilities for profit, and it employs about40,000 persons. At the end of 1988 it had about 800,000 main telephone lines,for an employee-to-line ratio of approximately 50 per 1,000 lines.

2. Organizational Structure. PERUMTEL, together with PT IndoSat and PTInti, is under the direction of the Ministry of Tourism, Posts and Telecom-munications (MTPT) (see Figure B-5). The present internal organization ofPERUMTEL is shown in Figure B-1. Three different groups comprising 22directors report directly to the President Director.

(a) Under the President Director there are five directorates atheadquarters: Operations, Personnel and Administration, Finance,and Supply and Development.

(b) In addition to the directorates, there are: a Corporate PlanningCenter, an Education and Training Center, a Research and DevelopmentCenter, and an Inspectorate for Internal Audit. The centers areeach supervised and represented at board meetings by one of thedirectors. The centers also report in parallel directly to thePresident Director.

(c) In addition, PERUNTEL has 12 regions called Witels. A 13th"region" is responsible for the domestic satellite communicationssystem, Palapa. Each region formally reports directly to thePresident Director.

3. Management and Senior-level Recruitment. With Indonesiannomenclature and legislation, PERUMTEL's "Board of Directors" is themanagement group of the company. The board members are the five directorsheading the respective directorates and the President Director. The Ministerappoints the President Director for a period of five years. Prior to thecurrent appointment, the post was held by the same person for 15 years.Assignments and corresponding terminations of other senior posts arerecommended by the Minister and, in principle, are controlled by theGovernment after consultation wiih the President Director. Seniority,political factors and personal reiations play an important role in theselection process. The present President Director and the Board of Directorswere appointed after the elections and government reorganization in mid-1988.The President Director, Mr. C. Sudarijanto, was previously with INDOSAT. The

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- 20 -ANNEX -Attachmen$ 1Page 2

present Directors for Operations and for Personnel and Supply were recruitedfrom the military sector. The Director of Finance came from the FinanceMinistry, and the Director of Development is the former head of Witel IV, thelargest regional unit (Jakarta).

4. Senior Management Oualifications and Training. Information onqualifications, experience and training of the present Board of Directors wasnot provided during the World Bank mission in December 1988. Following themission, full curricula vitae for the directors were published in the PERUMTELpersonnel newsletter. Some Directors have limited experience in their areasof responsibility. However, with the new Board of Directors PERUNTEL hascreated the platform for restructuring the organization. To be successful, asubstantial and reinforced management development program must includedirector levels as appropriate.

5. Job Descriptions. Job descriptions exist for all personnel at alllevels. However, most were issued around 1984-85 in printed and boundvolumes. Existing job descriptions are not used as a managem.ent tool and arenot regularly updated to reflect current job content, changing technology andorganizational objectives.

6. Delegation of Powers. The management culture that has developedwithin PERUXTEL is centralized. All decisions of significance, both atheadquarters and in the regions, require approval at the director level.Preparatory work at lower levels for decision making and implementation ofassigned tasks is usually regarded as assistance to the immediate superior,but there is no actual responsibility at the lower level.

7. taf-f Unions. No unions (in the traditional sense) exist atPERUMTEL. However, two other entities have significant influence ..n theorganization. The Civil Servants Community (KORPI) oversees PERUITEL'scompliance with the values and goals of the Indonesiar Stcte (PANCA:ILA). TheCivil Servants Spouse Association (WANAWAKI) exercises social contrl and mayin some instances be influential in assignments and transfers of per.sonnelwithin the organization.

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Attachment 2Page 1

INDONRSIA

TELEC RICATI UD SECTOR SX

IEDOSAT. Copaarative Notes on Organization and Mana&ement

1. INDOSAT is the international telecommunications carrier inIndonesia providing cable and satellite service. It is a state-ownedenterprise with OPT" status, similar to a private, profit-making company. Itemploys approximately 1,500 persons (end-1988). INDOSAT is the Indonesiansignatory to Intelsat.

2. The organization of INDOSAT is shown in Figure B-6. Thedirectorate has four members: the President Director, the Director ofOperations, the Director of Planning and Development, and the Director ofFinance and Administration. Operations is the largest department with about700 employees.

3. INDOSAT has implemented a modern planning, remuneration andmanagement system. The following summary was provided by the PresidentDirector in November 1988. The annual planning cycle begins in June.Managers throughout the organization are invited to propose projects andactivities for the next fiscal (calendar) year. Proposals are processed in abudgeting and programming cycle before presentation to the President Directorin August. Selected proposals are circulated internally for comment andreview and, by early September, there is a fairly clear view of the comingyear's activities. During the second week in September, proposals arefinalized and sent to the board of commissioners for their review beforesubmission to the ministry by September 30. The final plan for the comingyear's activities is then presented for approval at the shareholders' meetingnot later than the end of December. After the overall plan is approved by theshareholders, the President Director meets with all employees to explain whatis to be achieved. All units are required to finalize detailed projectimplementation plans during the first weeks of January. The detailed plansform the basis for monthly progress reviews.

4. INDOSAT has also established a system for individual performanceassessment based on individual performance objectives defined yearly.Evaluation is made on a three-grade scale: good, more than expected, muchmore than expected.

5. Starting -n 1968, international services in Indonesia wereoperated as a joint venture between the Government and ITT. When INDOSAT wascreated in 1980, it took over about 140 employees and recruited another 650(mostly operators) from PERUNTEL. From the outset, INDOSAT's remunerationsystem differed from that of PERUMTEL. The system at PERUNTEL is, inIndonesian usage, "wet" (i.e., the take-home pay consists of a base salaryplus numerous additional allowances, bonuses, etc.) but INDOSAT decided on a

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AttachmenPage 2

'dry' system with a preset, well-defined, all-inclusive take-home pay. The"wet" system is difficult to manage, administratively cumbersome andunsuitable as a management tool. The possible advantage is that the basesalaries nominally comply well with the "publlc service culture." However,the base salary at PERUMTEL often represents only about 30% of an employee'sactual total take-home pay. In order to Introduce the "dry" system atINDOSAT, guarantees had to be provided that employees' salawies would not bereduced, or else the organization would have faced an internal revolution. Inthe first years this system may have been more expensive because salaries hadto be rounded off generously, but the system is preferred by INDOSAT and itsemployees.

6. INDOSAT gives all managers a training program including governmentadministration, general management, supervision and office automation.

7. With the tools available and the culture that has been created,INDOSAT, as an organization, is able to measure its progress against well-defined targets which provide early warning when something is about to gowrong. It also has the basic inseruments to reward people for goodperformance and make people accountable for their actions. PERUNTEL has notadopted this kind of management system. In our discussions with PERUNTELofficials, it seemed they are considering the INDOSAT model and intendeventually to adopt something similar.

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Page 1

TELCOMMUICATION SECTOR SEIM

fluman Resources Management: UNDP/IMU Consultant's Recommendations

1. PERUMTEL's present human resource management (HRMI) configurationis inadequate to meet the major new challenges posed by the plannedtechnical development, expansion and upgrading of Indonesia'stelecommunications system. In connection with the sectoral study missicnto Indonesia a UNDP/ITU consultant outlined a number of human resourcemanagement issues currently affecting PERUMTEL. This annex presents thefindings of the UNDP/ITU consultant.

Human Resources Planning

2. For evaluation of overall telecommunication staff performance,the usual indicator is the ratio of total staff per 1,000 main lines.In Indonesia, the ratio is about 50, a high figure compared to similarsystems in other couniries. Among the reasons citect for this are thehigh proportion of unskilled staff, Indonesia's archipelagic geography,and the Government's desire to expand employment opportunities for thegrowing labor force. In assessinag PERUNTEL's staffing ratio, it shouldalso be noted that project preparation and implementation are normallycarried out by contractors and consultants.

3. During Repelita V (1989-94), network capacity is to be increasedby 120% from 800,000 lines to at least 1,700,000. PERUNTEL could achievea reduction of the staff/main line ratio of 8-10% p.a. during the projectperiod through increasing productivity and limiting new employment tofewer persons with higher skills. While the total number of staff wouldincrease to meet the requirements in new network capacity, the ratio ofstaff per 1,000 lines would decrease to fewer than 30 at the end of theperiod and could decrease to 20 during Repelita VI.

4. Human resources planning, recruitment and training should givespecial emphasis to PERU4TEL's skills-mix needs. The organization willrequire more educated employees vho have potential for development dueto: (a) rapid introduction of modern technologies, (b) greater emphasison marketing and customer service, (c) increasing needs for formanagerial expertise, (d) decentralization, and (e) the supervision oflarge outside plant projects undertaken by private contractors. PERUMTELwill need fewer employees, but more of those employees should beengineers and technicians, and also managers qualified in administration,operations, finance, marketing and other commercial activities.

- 25 -

ANNEX B-2Page 2

5. A thorough evaluation of standards and parameters for staffperformance, including productivity data and performance indicators,should be undertaken. The present human resources planning system andprocedures should be revised to eliminate present overstaffing andimprove the low ratio of engineers and qualified technicians toadministrative and operational personnel.

Career Development and Promotion

6. The present system of defining an employee's career, includingpromotion policy, does not easily lend itself to systematic developmentof employee career paths and skills development and the identification oftraining needs. In order to provide job satisfaction and motivation,increase efficiency and productivity, and improve recruitment ofqualified staff, it is important to implement a staff career developmentsystem. This should include a revised system of job requirements andclassification, definition of posts and skill levels. All promotionshould be based on suitability for positions determined on the basis of aperformance appraisal which measures past performance against goals andtargets and, thereby, assess potential for placement and promotion, andtraining and development needs.

Salary Structure

7. Present pay scales are acceptable compared with other governmentagencies, but the salary system and its application are strict andinflexitle. It is proposed t;hat the salary structure be revised and mademore adaptable. The structure should include a reward system based onjob performance. The application of the salary structure should alsoadmit adjustments of salaries to market situations in order to attractand retain the high-caliber staff for which PERUNTEL faces competition.The salary structure should be arranged so that each position or group ofidentical positions is compensated at a certain grade or level based on ajob evaluation system. The grade structure should reflect the relationbetween different pisitions within the same career stream as well as therelation between different career streams, and it should also take intoaccount supply and demand in the labor market. For placement of anindividual on the salary scale (level and step), rules should relate bothto job qualificaLions and education required as well as to an employee'sperformance.

Recruitment,

8. PERUMTEL does not normally encounter difficulties in recruitingstaff. Favorable pay scales and other benefits, particularly thegenerous pension, coupled with high unemployment in Indonesia, haveproduced an extremely low turnover rate in PERUNTEL. Nevertheless, thereis a shortage of qualified candidates for the higher technical andfinance categories requiring undergraduate and graduate degrees, andrecruitment for the higher levels should be intensified. In order tocompete with other corporations, PERUNTEL should direct recruitment

-26 -

ANNEX B-2Page 3

efforts toward specific telecommunications and telecommunications-relatedfaculties of universities and academies. Activities should include notonly steps to attract suitable candidates but also measures to encourageeducational institutions to irclude telecommunications-related fields intheir curricula. Recruituent and the responsibility for recruitment andselection should be delegated and decentralized to the regions to theextenu possible.

Personnel InforAtion System

9. Much information already exists regarding personnel statistics ingeneral and information needed for training purposes. Nost iscomputerized, but it is neither systematically arranged nor properlyanalyzed. It is recommended that the management information systemwithin the personnel department be reorganized and restructured to enablemanagement to make timely and correct personnel decisions.

Personnel Rules and Regulations

10. A personnel policy for PERUNTEL staff appropriate toPERUMTEL's status--one of the largest enterprises in Indonesia--andfunctions should be developed, and personnel rules and regulations shouldbe revised and brought in conformity with PERUMTEL's evolving role andstructure. Allowances and fringe benefits should be made fair andreasonable.

Training

11. In light of proposed changes in PERUMTEL's staffconfiguration, training offered to staff will have to be improved.Increased attention to management training, technology, productivity andquality of service will require significant changes in the way trainingis provided in the following areas:

(a) Training Organization. A clearer distinction between corporatetraining management and management of respective traininginstitutions is recommended. The corporate training managenent'sresponsibities should include (i) policy and strategy,(ii) planning and overall administration, (iii) standards,(iv) course design and standards, (v) course evaluation, and(vi) control and follow-up.

(b) Training Facilities. PUSDIKIATTEL should be responsible formanagement training snd higher-level and special training, butbasic training up to assistant engineer level should betransferred to the regional training units (RTUs) (70-80% of alltraining). As the RTUs will play a significant role inPERUMTEL's training, their capacity in all respects has to bestrengthened. PERUMTEL's training facilities at PUSDIKIATTEL aresatisfactory, but within the regions the RTU facilities are

- 27 -

ANNEX B-2Pape 4

deficient in most respects. Upgrading of the RTU capabilitiesand facilities is therefore needed.

(c) w;ining Institution Staff. It will be necessary to recruitqualified teachers and instructors who have both the technicalcompetence and the training skills necessary to teach others. Tomake the trainer's job more attractive, a system for jobrotation, career development, support, recognition andaccountability should be established.

r

-28- c

INNESIA

TELECOMMNICATIONS SECTOR STUDY

PROPOSED CORPORATE EPANNING PROCESS:INTERACTIONS BETWEEN IEMUMTEL AND GOVERNMENT DEPARTMENTS AND AGENCIES

1. This document was prepared by a consultant to assist in thedevelopment of an interactive government-to-PERUNTEL corporate planningprocess. The following pages will present successively:

(a) the benefits for each participant;

(b) the responsibilities and areas of interest for each participant; and

(c) a flow chart for the corporate planning process and relatedactivities.

This document resulted from discussions with many indiv'duals within PERUMTELand in various government departments and agencies: their cooperation wasessential in preparing this report.

II. THE BENEFITS OF A FOREMLIZED CORPOr.TE PLANNING PROCESS

2. Relations between PERUMTEL and government departments and agenciesmay be improved if they are formalized and documented for the PERUMTELRepelita and corporate planning process; furthermore this corporate planningprocess needs to be strongly linked with the annual budgeting process and thepreparation of the "Blue Book" for foreign-financed projects.

3. The advantages and benefits for each participant are as follows:

Par,ticioant B;e,fi,(a) Department of Tourism, Posts - Will ensure that government priorities

and Telecommunications; are incorporated in the corporate planDepartment of Finance and in the budget.

- Will be equivalent to a "contract"between PERUNTEL management and theshareholders.

- Will allow for monitoring andmeasurement of performance.

(b) PERUMTEL - - Will stabilize and formalize relationswith the Government.

-29 -CPage 2

- Will reduce risks of unnAcessaryInteractions with Government.

- Will specify required assistance fromGovernment for achieving objectives(ex: local and foreign financing,local approvals).

(c) Other goverruental depart- - Will keep them informed long enoughmonts in advance of PERUSL plans and

projects.

- Will ensure that their own views andobjectives are understood by PERIMTEL.

III. THE RESPONSIBILITIES OF OUTSIDE PARTICIPANTS

4. Telecommunications plays a key role in the development of Indonesia.The Government, the business community md all individuals want PERUMTEL tofulfill its mandate and to prosper. The strategic importance of PERUMTEL, itslarge size, its required investments and its need for foreign technologynecessitate many interactions with government departments and agencies. Thekey outside participants in the PERUNTEL corporate planning process are listedbelow, along with their present responsibilities regarding PERUMIEL.

Participan Responsibility

(a) Department of Tourism, - Regulation of PERUMTELPosts and Telecommunications(XPT

- Supervision as shareholder. Under a PTstatus, the shareholders would alsospecify the dividend pay-out.

- Approval of PERUMTEL Repelita.

- Approval of annual budget.

- Approval/review of corporate plan.

(b) -Department of Finance - Approval of foreign loans.

- Approval of annual budget, atshareholders meeting.

- Approval of PERUNTEL Repelita.

. Approval/review of corporate plan.

(c) BAPPENAS - Preparation of government Repelita:umbrella and focus for NTPT andPERUNTEL.

-30 AN--CPage 3

- Approval of PERUMTEL Repelita.

- Approval of foreign loans.

- Approval of export credit facilities.

- Informed of PERUMTEL corporate plan.

(d) Coordinating Minister for - Approval of all foreign contracts.Industry, Trade, and Finance(ERUIN) - Allocation and approval of export

credit facilities.

- Approval of big tenders (Rp 3 billionplus)

- Coordination of macroeconomic aspects.

- Informed of PERUNTEL corporate plan.

(e) Cabinet Secretariat - Approval of foreign tecbnicalassistance.

(f) Bank of Indonesia - Implementati,n of foreign loans.

(g) Technology and Development - Informed of and approves new(BPPT) technology and development initiatives.

(h) Department of Foreign Affairs - Approval of extension for expiredloans.

- Formal signature for bilateral foreignloans.

- Formal relations for technicalasssistance.

IV. COORDIpATION WITH THE GOVERNMENT REPELITAS

5. The corporate planning process should consist of both plandevelopment and performance evaluation activities. The process complementsthe annual budgeting exercise and the preparation of the 'Blue Book" onforeign financed projects; these three elements follow the framework set bythe Government in Repelita V. Some of the basic information and many of theparticipants are the same. The corporate plan covers many years and specifiesthe priorities and guidelines; the annual budget specifies and quantifies theaction plan for the year.

6. The corporate plan uses a five-year horizon; it will be a rollingplan updated yearly. However, major annual revisions are unnecessary unlessdrastic changes occur in the environment or the operations of PERUMIEL.

7. A monitoring process would rejuire PERUHTEL to submit periodicreports on its performance that would be reviewed and assessed by KMPT staff

-31- AM CPage 4

and reported to the minister. While important matters that need to beresolved between the ministry and PERUNTEL will arise outside of thisframework, the corporate plan will provide a consistent reference point forassessing its performance, and the corporate planning cycle will provide amechanism to adjust targets and priorities each year.

8. Two options are presented for the corporate planning process: theydiffer regarding, first, the timing of the planning and budgeting cycles andsecond, the degree of involvement by outside parties. In the first eption,labelled 'stand-alone," outside participation is "lighter" and the two cycles(planning and budgeting) are independent and not in phase (see Table 1 andFigure 1). In this option, the corporate plan would serve primarily as acommunication tool. The downside risks, however, are that the plan may notcommit the shareholders; that it may be too disconnected from the budget; thatit creates a long lag between the end of the planning cycle (March) a-id thestart of the operational period (January of the following year); aito that itdoes not provide easily for a performance monitoring activity.

9. In the second option, labelled 'Interactive," outside participationis more active and the two cycles (planning and budgeting) are concurrent,with a three month lead by the planning cycle (see Table 2 and Figure 2).There is more active participation by the shareholders and other agencies, anda tighter linkage with the budget. The downside risk, however, is that moretime and effort will be required to coordinate all elements with outsideparticipants and with the budgeting process.

10. The two options should be considered and discussed before a finaldecision is made. The choice should aim to bring benefits to allparticipants, formalize the various relationships, and assure that allspecific responsibilities are addressed properly. A consensus should bereached among the participants on this matter.

Ir -32- ANNE CPage 5

sle 1: CORPORATE PLANNING PROCESS--KEY ANNUAL ACTIVITIESOption 1: "Stand-Alone"

ScheduLe Key Act tie_su

September 1989 Start up of corporate planning process forperiod 1991-95: internal analyses,external discussions.

December-1989 Shareholders meeting for budget approvalfor year 1990.

March 1990 Presentation of final corporate plan(1991-95) to shareholders and other

- ~~~ participants.

April 1090 Submission of "Blue Book" to Government.

June 1990 Meeting of the Intergovernmental Group onIndonesia: review of foreign exchangerequirements.

33 -

FIGURE 1

PERUMTEL PLANNINGAND BUDGETING CYCLE

Option 1: STAND-ALONE

1989 March FI lCotpora Plan |l

April

MayJune I Sta Budgdeg Prooe

for year 1990

AugutSeptember Stait Planning Press Draft 8udgetOcober orpeod 1991-1995 IWPT & Rnae

November ReioDecember Shareholders Approval

of 1990 Budg

1990 January Febuary ial Coporate Plan:

March 9195 Draft Blue Book

April Review &NUY 100 ~~~~~~~~~~~~~~~ApproaMay IGI.GI3 Approva

June

July

August

SeptemberOdober

November .

1l991 Janu

-34 _ 1U.Page 7

Table 2: CORPORATE PLANNING PROCESS--KEY ANNUAL ACTIVITIESOption 2: -Interactive-

Schedule e Activiteg

March 1989 Sbareholders' meeting: Review of 1988performance.

April 1989 MTPT and Department of Finance Issue a*call letter asking PEROMNEL to prepareits corporate plan. The *call letter"includes statements of guidelines,priorities and concerns fro MTPT afterconsultation with the Department ofFinance and WAPPENAS.

may 1989 A draft corporate plan is sent by PERUNTELto staff personnel at HTPT, fordiscussions and comments.

June 1989 Senior management of PERUETEL makes apreliminary presentation to the MTPTMinister and the Secretary General.PERUNTEL starts the budgeting process foryear 1990.

July-August 1989 PERUNTEL makes revisions and modificationsto the plan; discussions are held withBAPPENAS and the Department of Finance toobtain their approval in principle for thefive-year capital budget on a rollingbasis.

September 1989 PEWUMTEL senior management discusses theplan with the Board of Supervisors.

Decemiber 1989 Shareholders' meeting: approval of theplan for 1990-95 and the budget for 1990.

March 1990 Evaluation of performance regardingquantitative and qualitative corporateobjectives for PERUMTEL. Discussion atshareholders' meeting at the same time aspresentation of audited financialstatements.

- 35 -

FIGURE 2

PER UMTEL PLANNINGAND BUDGETING CYCLE

Option 2: INTERACTIVE

1989 March Sarehol evw of

April MW Fnd S

May 0r&P IS.uitto M June PrfiiaYPWlUO~ Star Budgeting ProesJune ~~~~MTPT Mkdet and _ute

July f~uad or yea 1990

August

September Ioard of Supuwviara Draft Budget

Odctober MTPT & Finance

November RwIs

December Shaeholders ApproalOf 1990 Buget

1990 JanuaXy

FebruaryMarch Drift Blue BookApril ------ P &

June IGGI U APPrvAJuly

August

September

Octber

November

December

February

- 36 -ANUEX DPage 1-

TEICOSUICATION SEQ SUD,.aA

'IRUMEL #s Presnt Tariff

A. Telephone Installation Charges 1

1. Category I of Tel gphone EXccabng(a) Main connection 500,000(b) Branch connection 63,000

2. Categnry II of Telenhone Exchange(a) Wain connection 350,000(b) Branch connection 32,000

3. Category III of Telenhone hAhange(a) Main connection 200,000(b) Branch connection 19,000

4. Categorv IV of Telenhone ExZhang(a) main connection 175,000(b) Branch connection 13,000

5. Category V of Telephone Exchange(a) Main connection 125,000(b) Branch connection 10,000

6. ,Categor VI of Telephone Exchang(a) Main connection 90,000(b) Branch connection 7,000

7. Category VII of TelegoM h SCMhanSe(a) Main connection 75,000(b) Branch connection 3,750

B. Monthly Rent of Teleuhone Connection

1. Automatic Telgbhone Exchaige(a) Category I and II

(i) Main connection 3,500(ii) Branch connection 1,750

(b) Other category(i) Main connection 2,000(ii) Branch connection 1,000

i See Note 1, Animx D, p. 4.

- 37 - ANNEX DPage 2

2. Automatic Telephone Exchantp up to 500 Nfmbers(a) main connection 1,000(b) Branch connection 500

3. Auomatilc Telephone ExchaWge Over SQO !umbera(a) Main connection 2,000(b) Branch connection 1,000

C. Telephone Conversation Ratg

1. Automatic Tele2houe(a) Local pulse of 3 minutes 75(b) Local call of 3 minutes from PCO SO(c) Internal region per pulse 75(d) Interregion per pulse with duration 75

up to 100 km, 6 seconds100-200 km, 5 seconds200-300 km, 4 seconds300-1,000 km, 3 secondsover 1,000 km, 2 seconds.

2. Nonautcjmatic T2lephg(a) Local Included in monthly

subscription(b) Local from PCO per call 50(c) Internal region per minute 75(d) Long-distance (normal service):

up to 100 km 375100-200 km 450200-300 km 560300-1,000 km 750over 1,000 km 1,125

(e) Long-distance urgent service(twice the rates shown in (d) above)

D. TeletArpb Rate

1. Presentation rate per telegram 1002. Domestic rate per word, normal service (minimum 10 words) 10

E. Telex Jate

1. Installation fee Same as telephonemain exchange

2. Monthly subscription 7,5003. Pulse rate with duration:

up to 50 km, 12 seconds50-300 km, 8 seconds300-750 km, 6 secondsover 750 km, 3 seconds

38- ~ANNEX D

Page 3

F. Private Leased Circuits

1. lnstlationfe,e ggr giair(inside service border area)Category I 250,000Category II 175,000Category III 100,000Cagetory IV 87,000Category V 62,000Category VI 45,000Category VII 37,500

2. ltnthly Charmes

(a) Telephone circuit (analog)(i) Local (per pair within one local area inside 75,000

service border area)(ii) Long distance and trunk

Zone Distance Government Business and(km) private

0 up to 25 180,000 100,000I 25-100 900,000 2,520,000II 100-200 1,080,000 3,150,000III 200-300 1,350,000 3,150,000IV 300-1,000 1,800,000 4,200,000V over 1,000 2,700,000 6,300,000

(b) Telegraph and Data CircuitsLeased telegraph circuits are available up to a maximumtransmission rate of 50, 100 and 200 baud.Leased data circuits are available for transmission ratefrom 300 bps.

(i) WIthin one local area:Printer, per pair per connection 75,000Data communication, per pair 100,000

-39 ~ ANN DPage 4

(Ui) Long distance and trunk leased circuits

Tras-oission Zone Distance Government Business andrate private

50 baud I up to 100 180,000 420,000(full II 100-200 216,000 504,000speed) III 200-300 270,000 630,000

IV 300-1,000 360,000 840,000V over 1,000 540,000 1,260,000

75 baud I 198,000 462,000II 237,000 554,000III 297,000 693,000IV 396,000 924,000V 594,000 1,386,000

100 baud I 216,000 504,000II 259,000 604.000III 324,000 756,000IV 432,000 1,008,000v 648,000 1,512,000

200 baud I 288,000 672,000U1 345,000 806,000III 432,000 1,008,000IV 576,000 1,344,000V 864,000 2,016,000

300 bps I 900,000 2,100,000II 1,080,000 2,520,000III 1,350,000 3,150,000rv 1,800,000 4,200,000V 2,700,000 6,300,000

NOTES

1. Location CategoriesCategory I Jakarta areaCategory II Aedan, SurabayaCategory IXI Bandung, Denpasar, Palembang, etc.Category IV Yogyakarta, Bogur, Ambon, etc.Cagetory V Madiun, Sabang, Cianjur, etc.

-40 AM= D

page

Category VI Kendal, Soingaraja, etc.Category VII CSamis, Banjar, etc.

*2. Telegraph circuits are for the following operating modes:

Half-duplexFull-duplex (4-wire connection)

- 41-

TECOMCATIONS SECTQR STR

ANNEI E. STATISTICAL ANNEX

Table of Contents

E-1 Financial Statements of Sector Entities, Existing Service and PerformanceData

E-1.1 Financial StatementsE-1.1.1 PERUMTEL's Historical Income StatementsE-1.1.2 PERUNIEL's Historical Balance SheetsE-1.1.3 PERRJTEL's Historical Funds Flow StatementsE-1.1.4 PT Indosat's Historical Income StatementE-1.1.5 PT Indosat's Historical Balance SheetE-1.1.6 PT Intiis Historical Income StatementE-1.1.7 PT Inti's Historical Balance Sheet

E-1.2 Historical Data of Existing ServicesE-1.2.1 Historical Data for Existing Facilities and

ServicesE-1.2.3 Traffic per DEL and Growth Rates

1-1.3 PT Inti: Current Product Range and Production Capacity1-1.4 Telephone Switching Systems in Operation

1-2 Long-distance Call Analysis

E-3 Delays in System Commissioning

1-4 Repelita V Investment Program

E-5 Human Resource Data

E-5.1 PERUMITELs Employees by Category, 1983-88E-5.2 PERUMTEL's Employees by Unit and CategoryE-5.3 PERUMTEL's Employees by Level and CategoryE-5.4 PERUMTEL's Employees by Level and UnitE-5.5 PERUMTEL's Employees in Headquarters and Category1-5.6 PERUMTEL's Employees in Headquarters by Level and Unit1-5.7 PERUMTEL's Employees by Birth YearE-5.8 PERUMTEL's Employees by EducationE-5.9 PERUNTEL's Staff to Mainline RatioE-5.10 PERUMTEL's Manpower Efficiency by Region

V

- 42 - ,NNEX E-Page 1

INDONESIA

TzWA0N9MN=I0AINS SECTO STUDY

PRRUMTELs Historical Income Stateme_ts(Current Rp billions)

Fiscal Ye,ar &ndig December 311981 1982 1983 1984 1985 1986 19871A

Onerating RevenUeTelephone 203.47 285.80 354.86 379.51 463.27 527.23 617.28Telex 24.47 20.21 29.25 34.61 44.69 47.04 52.19Telegraph 6.09 5.21 5.95 6.55 8.03 8.81 9.74Others 14.39 13.25 18.66 23.38 26.38 31.11 37.80

Total Revnu 248.42 324.47 408.72 444.05 S42.37 614.19 717.01

Ooeratin Expen,sesPersonnel 53.41 70.89 79.26 105.31 133.17 152.02 167.00Material and Transport 31.08 40.34 51.27 73.31 91.5 113.22 110.18Repair & Maintenance 40.35 43.06 76.38 89.31 73.43 84.65 84.32Depreciation 72.51 104.67 125.93 123.30 130.42 142.32 319.03Others 2.16 4.74 l1'7 2.21 1.57 3.02 5.32

Total Riwenses 192.51 263.70 334.01 393.4A4 430.02 49,23 685.85

Operating Income 48.91 60.77 74.71 50.61 112.28 118.96 31.16

Interest 17.91 20.52 30.95 30.47 25.47 34.39 33.45Nonoperating Income 5.38 11.30 18.28 50.94 74.15 103.40 99.51

Pretax Incone 36.38 51.55 62.04 71.08 160.96 187.97 97.22Income Tax 16.37 23.14 26.12 1.27 40.13 53.79 16.45

Neh nq=m ZQ01 28.41 35.92 628iL 12Q.83 134.18 80.77

Ratios:

Operating Ratio (%) 80 81 82 89 79 81 96Rate of Return on BookValu6 Assets (%) 11.1% 11.5% 14.1% 10.0% 24.5% 26.9% 3.8%

Jg Unaudited statement.

43 ANNEX E-1Page 2

ZNDlEIAIEIECVMWSCATIONS MMTO ATD

Table E-1.1.2

PRMM=L's Hjiseorical Bala)ne ftets(CUr-rent Rp billions)

Fingal Year londtn Dacembe 31-_1981 198 1983 195;4 i985 1986 1987/a

!Srrinn AssetsCash - 183.84 194.01 140.94 162.84 52.74 116.51 64.01Short-term Investments 50.00 167.02 433.66 445.72 464.52Accounts Receivables 80.07 112.58 156.07 149.48 115.77 129.88 123.1Inventories 34.03 70.08 72.71 70.50 87.59 83.08 67.41Others 34.56 57.26 86.17 68.15 66.44 97.93 178.53

Assets 132.50 433.93 505.89 617.92 756.20 873.12 8L7.57

Gross Fixed Assets 579.23 733.19 820.33 894.63 938.15 1028.79 1917.49Less: Acc. Depreciation 139.02 205.73 292.31 387.99 478.95 586.56 1100.1

Net Fixed Assets 440.21 527.46 528.02 506.64 459.20 442.23 817.39Work in Progress 111.13 81.69 66.80 108.78 196.25 316.69 502.33Other Assets 10.57 13.02 0.55 0.05 0.03 0.00 0Investments 2.72 2.58 5.75 7.13 0.00 0.00 0Deferred Charges 145.28 132.68 102.90 79.46 54.91 48.04 122.98

Total OtherAnnetta 158.57 148.28 109.20 86.64 5494 48-0A 122.98

Total Assea 1.042.41 1219L.36 1,209,91 1L320.05 1.466.59 1.f6S080 2.34Q27

Liabilities

Current LlabilitiesAccounts Payable 16.51 38.43 39.33 54.35 61.64 75.71 86.88Other Payables 85.20 125.90 140.97 121.87 121.41 130.01 141.27Current Portion of L-T-D 11.02 54.18 55.33 56.46 60.14 65.67 73.49

T ties 112.73 218.51 235.63 232.68 243.19 271.32 3Q1.64

Other Liabilities 61.61 127.87 147.99 79.69 99.36 171.28 176.44I.on Tenm Debt 516.95 467.79 421.12 476.81 510.83 563.85 730.31

Capital 86.00 86.00 86.00 350.00 350.00 350.00 350Reserves & Retained

Earning 265.12 282.19 319.17 180.87 263.21 323.56 781.88

To-tal_Equitr 351.12 368.19 405.17 530.87 613.21 673.56 1131.88

L-alities 1.042.41 1.t82.36 1.209.91 1,320.05 1,466-59 1.680.08 2.340.27

Ration

Current Ratio (times) 2.95 1.99 2.15 2.66 3.11 3.22 2.98Debt/Total Capital(%) 62 62 58 51 50 52 44

L& Unaudited statement.

- 44 bANEXLE-Page 3

TQECONMUCATIO QE STIUD

Table g-1.1.3

PERUMTELMs Historical Funds Elow StateMents(Current Rp billions)

Fiscal Year Ending Decemuber 311981 1982 1983 1984 1985 1986 1987L&

Net Income 20.01 28.41 35.92 69.81 120.83 134.18 80.77Depreciation 72.51 104.67 125.93 123.30 130.42 142.32 319.03Interest 17.91 20.52 30.95 30.47 25.47 34.39 33.45

In2rnal Cash-izeneration 110.43 153.60 192,80 223.8 2Z6.72 310J9

Equity 31.54 66.52 25.77 81.80 28.56 32.84 144.11Other Liabilities 6.8-, 5.63 9.05 8.96 3C.r. 81.34 14.88Long-term Debt 48.30 29.42 27.89 47.86 97.q2 118.69 204.86

Total Sources 192.16 255_51 362.20 433.23 543.76 727.10

.9ngligationsCapital Construction 57.28 124.52 72.25 116.28 130.99 211.08 499.61

GOI Development Funds 11.01 15.63 19.76 38.40 66.46 73.80 44.42Bonus 2.00 2.84 3.59 6.98 12.08 13.42 8.08Pension 1.60 2.27 2.87 5.58 9.67 10.73 6.46Social 0.40 0.57 0.72 1.40 2.42 2.68 1.62

Debt ServiceInterest 17.91 20.52 30.95 30.47 25.47 34.39 33.45Repayment 7.07 11.02 54.18 55.33 56.46 60.14 65.67

Total Debt Service 24.98 31.54 85.13 85.80 81.93 94.53 99212

Change in Working Capital60.44 -4.S4 53.69 113.92 124.02 83.19 -13.62Other Assets 39.45 82.14 17.50 -6,16 5.67 54.32 151.41

197.16 255.17 255.51 362.20 433.23 543.76 797.10

0 0 0 0 0 0 0

Net Cash Generationas 8 of capitalexpenditure & 129.97 85.48 121.68 85.47 97.97 67.54 57.99

Debt Service Coverage 4.42 4.87 2.26 2.61 3.38 3.29 4.37(times)

LA Unaudited statemeitt.Ho Net cash generation is internal cash generation after debt serviceand appropriations required by law such as Government Development fundcontribution (55% of net income), etc.

-45- ANNEX -1Page 4

TELECWOMUNICATIONS SECTOR STUDY

Table E-1.1.4

PT Indosat's HistoricaL IncoMe Statement(Current Rp billions)

Fiscal year ending December 311983 1984 1985 1986 1987

fterating Revenue

Telephone 68.69 88.21 111.17 128.36 181.05Telex 36.21 45.42 54.04 52.38 58.86Telegraph 1.93 2.02 2.01 2.02 2.38Others 4.24 5.09 8.83 11.17 14.40

Total Revenue 111.06 140.73 176.05 193.93 256.69

ggerating Fbzensea

Operation 26.57 33.19 51.81 60.00 73.31Personnel 4.70 5.78 7.29 9.14 11.49Depreciation 1.92 2.09 3.82 4.98 6.68Maintenance 1.26 1.35 2.48 3.15 4.20Admin & General 3.08 3.94 4.79 5.44 5.99

Total Expenses 37.53 46.35 70.18 82.71 101.67

Operating Income 73.53 94.38 105.87 111.22 155.03

Other income & expenses 2.93 1.00 1.01 2.71 10.88Miscellaneous /A 0.00 1.17 (0.61) 11.65 3.93

Pretax Income 76.46 96.55 106.27 125.57 169.83Income Tax 33.62 30.78 33.67 39.'98 55.32

Net Income 42.84 65.77 72.61 85.60 114.52

Ratios:

Operating Ratio (a) 34 33 40 43 40Rate of Return on equicy 82.5% 60.1% 54.3% 58.1%

La Effect of accounting changes and extraordinary itemq.

-46 - Page 5

nxogs~LJJItoffNICxONS SECTOR STUD

,Table A- 1.1. 5

PT Indosat's Historical BAlance Sheet(Current Rp billions)

Fiscal yej eding December 311983 1984 1985 1986 1987

Currenmt AssetsCash 0.76 1.86 1.40 0.44 1.33Short-term Investments 21.19 27.26 38.85 61.64 82.40Accounts Receivables 44.56 56.13 64.03 77.37 93.05Advance Payments 0.33 0.69 2.30 3.96 3.41Others 1.37 3.49 2.85 3.90 2.59

Total Current Assets 68.21 89.42 109.44 147.30 182.77

Gross Fixed Assets 38.01 66.19 88.82 118.66 124.71Less: Ace. Depreciation 8.36 10.46 14.27 19.24 23.97

Net Fixed Assets 29.65 55.73 74.55 99.42 100.74Work in Progress 12.18 12.87 20.33 10.04 31.57Intangible Assets 11.41 9.51 7.61 5.71 3.80Other Assets 3.43 3.46 3.34 0.89 6.53Investments 0.00 0.00 8.27 9.27 12.65

Total Other Assets 14.84 12.97 19.21 15.87 22.99

Ttal Assets 124.88 170.98 ,223.53 272.63 338t07

Liabilities

Current LiabilitiesAccounts Payable 15.23 6.33 4.97 9.53 19.40Other Payables 4.19 5.20 2.57 21.27 9.86Current Portion of L-T-D 7.52

Total Current Liabilities 19.42 11.54 15.05 30.80 29.26

Other LiabilitiesLong Term Debt 25.75 38.69 50.74 44.72 44.28Equity:Capital 35.00 35.00 70.00 70.00 120.00Reserves & retained

earning 44.72 85.76 87.73 127.12 144.53

Total Equity 79.72 120.76 157.73 197.12 264.53

Total Liabilities 124.89 L70.98 223.53 272.63 338.07

Ratios:Current Ratio (times) 3.51 7.75 7.27 4.78 6.25Debt/Total Capital (%) 24.42 24.26 24.34 18.49 14.34

-47- ANNEX E-1Page 6

rIDoNEsrA

TELECOMMUNICATIONS SECTOR STUDY

Table E-1.1.6

PT Inti's Historical Income Statement(Current Rp billions)

Fiscal year endina December 311983 1984 1985 1986 1987

Sales Revenue 7.81 7.46 41.08 36.40 57.13Cost of Goods Sold 5.72 5.29 33.57 28.38 48.81

Gross Margin on Sales 2.08 2.17 7.51 8.01 8.33Marketing & Admin Expenses 1.59 1.91 3.69 3.25 4.98

Income from Operations 0.49 0.26 3.82 4.76 3.35

Other Revenue 0.09 0.99 0.61 1.15 2.61Other Expenses 0.06 0.22 0.61 4.27 2.24Miscellaneous La 0.00 0.00 0.00 0.00 (0.73)

Pretax Income 0.52 1.03 3.82 1.64 2.98

Ratios:Gross Margin (1) 73.3? 70.92 81.7Z 78.00 85.42Return on Equity tl) Lb 2.5Z 4.7Z 9.1S 2.82 5.0?Return on Sales (Z) 6.7Z 13.8? 9.3S 4.5Z 5.22

/a Extraordinary items./b Previous year's equity and new capital.

-48- ANNEX 3-1

Page 7

INDONESIA

TELECQNMUNICATIONS SECTOR STUDY

Table E-1.1.7

PT Intil's Historical Balance Sheet(Current Rp billions)

Fiscal year ending December 311983 1984 1985 1986 1987

Current AssetsCash 3.88 8.90 3.10 0.80 6.36Short-term Investments 0 0.00 0.00 0.00 29.00Receivables 1.97 3.58 19.84 27.32 75.92Inventories 6.57 18.82 26.44 62.40 71.79Others 0.97 2.94 1.51 3.27 7.30

Total Current Assets 13.39 34.24 50.88 93.78 190.36

Gross Fixed Assets 3.83 15.86 19.33 25.18 26.84Less: Act. Depreclation (0.95) (1.26) (2.69) (4.43) (6.50)

Net Fixed Assets 2.88 14.60 16.63 20.76 20.34Work in Progress 2.52 0.00 2.59 0.00 0.23Intangibles & other Assets 0.50 5.14 8.84 27.31 33.32Lesst Acc. AmortLzation (0.44) (0.44) (1.61) (3.25) (6.68)

Total Other Assets 0.96 4.70 7.23 24.06 26.64

Total Assets 18.85 S3.54 77.34 138.60 237.58

LiabilitiesCurrent iLabilltiesAccounts Payable 3.19 12.46 18.83 49.54 14.46Other Payables 6.43 17.58 18.22 21.69 108.98Bank Loans 0.00 0.00 0.00 25.83 0.00

Total Current LLabllities 9.62 30.04 37.05 97.06 123.44

Long-term Liabilities 6.47 0.73 0.73 0.73 71.83EquLty t

Capital 0.90 20.04 33.36 33.65 33.65Reserves & Retained

arnainsg 1.86 2.73 6.19 7.16 8.66

Total Equlty 2.76 22.78 39.56 40.81 42.30

Total Liabilitles& EuuAtv 18.85 53.54 77.34 138.60 237.58

RatiostCurrent Ratio (tImes) 1.39 1.14 1.37 0.97 1.54Debt/Total Capital (2) 70.1S 3.1S 1.82 1.8S 62.92

- 49 - ANNE -1Page 8

MTZIECMHUICATIONS SE&=O STUD

Table E-12.2

Pwerformance. Indica;grs

Fiscal Year Ending December 311981 1982 1983 1984 1985 1986 19871A

Facilities and S_affExchange Capacity 628,600 645,440 666,100 697,840 779,378 838,555 905,931Telex Capacity 12,180 12,180 12,220 12,790 13,690 16,200 17,302# of telephone

subscriber 427,185 475,459 503,253 536,102 602,356 658,341 759,128# of telex subscriber 6,740 8,105 9,292 10,289 11,285 12,723 13,733

# of additonaltelephone 57,392 48,274 27,794 32,849 66,254 55,985 100,787

* of additonal telex 1,433 1,365 1,187 997 996 1,438 1,010% Fill telephone 68 74 76 77 77 79 84% Fill telex 55 67 76 80 82 79 79

# of employees 26,887 26,508 28,262 28,872 32,990 36,091 41,000Employees/1,000 DELs 63 56 56 54 55 55 54

(Rp '000)Telephone Rev.per DEL(av) 511 633 725 730 814 836 871

Telex Rev.per line (av) 4,062 2,723 3,363 3,535 4,143 3,919 3,945

Av Op. Costper DEL(av)6a 314 347 418 510 517 549 508

% Operating Ratio 80 81 82 89 79 81 96

Net cash generation as8 of capital expenditure id 130 85 122 85 98 68 58

Rate of Return onaverage net bookvalued assets 11.1% 11.5% 14.1% 10.0% 24.5% 26.9% 3.8%

Debt Service Coverage 4 5 2 3 3 3 4

# Days AccountsReceivables 118 127 139 123 78 77 63

Current Ratio 2.9 2.0 2.1 2.7 3.1 3.2 3.0Debt/(Debt+Equity) Ratio 62 62 58 51 50 52 44

^ Unaudited Statement.b Prelimanary results.

4. Total cost for staff, maintenance,etc. but excluding depreciation,debt service,corporate tax and other financial charges.

JA Net cash generation is internal cash generation after debt service & appropriationsrequired by law such as Government Development fund contribution(550 of net income),etc.

- 50 - ANXE

Page 9

INDONESI

TELECOIMUNICATIOI. $1S CTOR STUOM

Table E- P. g.

Historical Data for Existing Facilitles and Services

19881980 1981 1982 1983 1984 198 1998 1987 (estiate)

IndonesiaLocal telephone serviceS

Number of telepboes 512,880 584,181 699,301 717,660 788,365 717,990 804,385 890,117 1,000,539Number of D0L 369,843 427,185 475,459 503,253 536,102 602,3S6 658,341 759.128 800,000

Automatic 319,303 375,424 420,518 444,463 473,736 531,034 580,454 668,949 761,507)Ianuat 50,540 51,761 54,941 58,790 62,366 71,322 77,887 90,179 95,996

AnxAal connection ofDEL$ 57,342 48,274 27,794 32,849 66,254 55,985 100,787 97,825Average growth Lnsubacrlber con-nection. (X p.s.) 9-73 8.97 8.48 10,82 7.24Number of telephoneexchnges 594 600 666 679 683 693 704 714 721Automatic 137 156 163 170 175 182 195 223 223Manual 457 444 503 509 408 511 509 503 498

Installed Capcity

of exchange 598,700 618,600 645,400 666,100 697,800 779,378 838,555 905,931 983,721Autasttc 524,900 549,500 555,400 576,800 601,400 674,488 728,000 791,335 871,935

1atowl 73,800 79,100 90,000 89,300 96,400 104,899 110,555 114,596 111,786Exanse fill (2) 61.77 67.96 73.67 75.55 76.83 77.29 78.51 83.80 87.11

Automttc (2) 60.83 68.32 75.71 77.06 78.77 78.73 79.73 84.53 87.34tnAl (2) 68.48 65.44 61.05 65.83 64.70 68.00 70.U 78.69 85.87

Telegraph a" TelexTSlegraph offiees 623 627 638 639 641 659 665 662 659Centex terminals 381 440 507 544 599 663 775 800 8oTelex exchages 25 27 27 28 19 30 34 36 38Installed telex

*apacity 11,530 12,180 12,180 12,220 12,790 13,690 16,200 17,300 20,800Telex connetiaons 5,307 6,740 8,105 9,292 10,289 11,285 12,723 13,733 14,501Average growth oftelex subscriber.

(1 p.a.) 18.00 13,75 11.93 10.26 8.96

- 51 -ANNE B-1

Page 10

Table 3-1.2.1 tC.atIau.dw

19881980 1981 1988 198 9 1984 15 1986 198? (estLmat*)

S laphaus trafflc

- pule (aln) 3 9,353,4 4,315.9 4,962.4 5,147.8 5,365.6 5,504.1 u,898.0 6,781.2 ,447.6JWm dltauce is

- cells ('000) 10,868.5 10,212.6 10,632.2 10,038.2 9,884.3 9,814.8 10,726.2 11,904.9 12,984.8- minutes ('000) 63,160.0 64,174.8 67,621.5 53,551.5 57,028.4 57,421.6 65,222.0 72,445.3 75,286.0Interastlonal- aLIS ('000) 1,353.4 2,142.0 2,689.7 3,110.1 3,344.6 4,211.1 5,2Y5.6 8,057.2 10,037.8- mtintes ('000) 8,864.4 13,025.4 16.707.1 18,7"3.1 20,900.6 22,959.2 26,712.6 34,068.4 40,310.3

5l 1 raph trufficDoeagle- 3u1eb ('000) 6,455.4 6,92.7 7,141.8 7,855.9 8,418.8 9,086.7 10,377.2 11,090.2 11,618.7- words (ala) 190.9 "05.4 214. 240.1 265.7 284.5 321.0 336.8 368.2£ntern tienal- zmaber ('000) 231.6 100.7 140.8 104.9 81.3 67.6 60.1 57.4 61.4- words (aln) 6.8 5.7 4.5 3.3 2.5 2.2 2.0 1.8 1.7

telex traffle

- Pulse (Al) ik 56.9 82.3 21.9 336.4 37S8.4 421.2 435.4 471.0 512.3znt rnwtioagl- calls ('000) 2,190.5 2,830.9 3,284.6 3,686.0 4,295.8 4.221.8 4,298.3 3,850.1 3,420.5- mInutes ('000) 6,946.2 8,037.6 10,132.8 11,01S.6 12,628.3 12,643.4 12,732.3 11,052.4 10,076.4

lz lacludes one Lnternatfonal telex ecanctlon.

E2 Represents only subserOlbr conneotlon and xcsludes IUUIFfU's use.

LS Represents m -a call.

- 52 - Page 11

INDONES1

I&IIMICA'TIONS SECTO sUD

Z&le E-1.2.2

Traffic per DEL and Growth ates

19881980 1981 1982 1983 19S4 1985 1986 1987 (estimte)

InternationalCall rate 3.66 5.01 5.55 6.20 6.24 6.99 8.01 10.61 11.71Gowth rate (1 p.&.) 27.01 9.68 10.45 0.62 10.76 12.76 24.50 9.39Mnutes Per call 6.55 6.08 6.3S 6.02 6.25 5.45 5.06 4.23 4.02

DoerstlcPase rate 10,502 11,49% 11,801 11,582 11,326 10,365 10.161 10.137 9,780

Otovb gate (z p.a.) 9.46 2.65 -1.85 -2.21 -8.49 -1.97 -0.24 -3.52Interlock manualcll, rate 29.39 23.91 22.36 19.95 18.44 16.29 16.29 15.68 15.15

Ggowth rate (X p.&.) -22.92 -6.91 -12.11 -8.19 -13.15 -0.01 -3.89 -3.50

Ninates per Mal 5.81 6.28 6.36 5.33 5.77 5.85 6.08 6.09 5.80

DomesticPalse gte 10,722 12,211 33,547 36,203 $6,777 37,324 4,221 34,29? 35,329OgoWth gQte (I p.-.) 13.89 174.74 7.92 1.59 1.49 -8.31 0.22 3.01

intemn4tioialCall rate 412.76 420.01 405.26 3".46 417.49 374.11 337.84 280.35 235.86Grovth rate (t p.-.) 1.76 -3.51 -2.91 6.11 -10.39 -9.70 -17.02 -15.87Kimites per call 3.17 2.84 3.08 3.01 2.94 2.99 2.96 2.87 2.95

-53-

ANXE-1Page 12

INDON3L1

Table- E- . 3

PT Lnti: Current Product Range and Production Caoac ity

Capacity/ OutputDescription Unit year/shift Shift 2 Shift 3

Switching and Terminal

Digital Public Exch. LU 150,000 270,000 375,000

PABX LU 5,000 9,000 13,500

Telephone set Set 166,000 298,000 415,000

Pay phone Set 3,000 5,400 7,500

Trawqlsmison

Transceivers HF Set 1,680 3,024 4,200

Mobile telephone Set 1,625 2,935 4,063

Rural telephone system 5 9 13

Small earth station Unit 50 90 130

Nultiplex/PCM CH 10,800 19,440 27,000

Digital microwave Link 5 9 13

Radio/wind sonde Set 15,000 27,000 37,500

Packsatnet LU 150 270 375

54A E-1Page 13

IDNSIA

ZTLEOMUIaGA O SECTOR STUDY

Tab12 L-.A

Telephnne Switching Systems In Qperation

Type of exchanges Manufacturer

Local exchangesmanual ABK tAE

ADK LMEAutomatic EMD FG.FGA.55V Siemens

ESK 10,000 SiemensUR 49A PhilipsARF 101.102 LMEARF 521 LME*DKS 44223S SELPC-1000 DTMNEC-230 S/B/L NECNEC-100 B NECHIT-C23S HitachiPRX 205 A PhilipsMC/1OC BTMSTDI/EWSD PT Inti/Siemens

Tranit Exchang2gson-SPC ARM 201 IRE

CIT JANUS CITPC-100/comb. BTM

SPC MC/lOC BTMSTDI/EWSD PT Inti/Siemens

ANNEX E-2Page I-55 -

INDONESTA

TBLECOHKUNICATIONS SECTOR STUDY

LONG DISTANCE CALL ANALYSIS

1. Actual status and problems involved in the Indonesian SLJJnetwork from the view point of ser<ices quality.

Fig. 1. shows a typical call loss structure in IndonesianSLJJ network.

LOCAL TOLL TOZ LOCA;_EXHANGE EXCHANIGE EXC%HNGES EXCHANCES

11NtIN IN THR 1 fAY ~TA .AKAP-TA C IE I IE'

e ................ ........ * ;^. .............

............ .. _,, .t,@1 '.Wt ts ..... ........

. . . . . . . . . .~~~..~ t '

P=CALLALO OF (7 ' )7% ( 0 54%

FIGGURE 1. A TYPICAL CA'LL LOSS STRJCTLE

Causes of call loss 2 to 4 contain both network nature -"network congestion", "register time out", etc., while'incomplete dial", etc. such as call loss of 1 and 5 isattributable to subscriber behavior.

Causes of 1 contain "no dial" and "partial dial". Forced callrepetition makes subscriber irritate and results in increasedwrong dialing.

Causes of 5 contain "called party busy" and "no answer".Almost all subscribers in Indonesia tend to dial againimmediately when they found busy tone or no answer.Therefore, repeated calls due to called party busy or noanswer have a high probability of meeting call incompletionagain.

ANNEX E-2-56- Page 2

The"s causes are closely related as shown in figure 2.

(CGRAOE OF , t CALL SERVICE j< T0

tNREASE F NPB PERTIAL AL CALI A1 T

FIGURE? ' ICIOUS CORCLE I N LOW CALL COMPLETION

From figure I it is found that network congestion does notoccupy a large portion of call loss. However, it is alsoknown from figure 2 that the subscriber behavior in Indonesiais attributable to unsatisfactory quality of service and arebased on call repetitions of many business calls. In otherwords, we can expect that the improvement of quality ofservice will change the subscriber behavior in Indonesia.

2. Causes of Unsatisfactory Grade of Service

Figure 3 (A) shows a histogram of links classified by gradeof service in the long distance network whi--h is based on theestimation from the measured traffic.

46 out of 162 links do not satisfy 1 % of the grade ofservice criterion (loss probability) and furthermore, 14 outof the 46 links have less grade of sorvice than 10 %. Inaddition, as shown in figure 3 (B), 27 out of 55 linksfrom/to Jakarta Toll Center, which occupy almost half, do notmeet the grade of service criterion and 10 links with lessgrade of service than 10 X are also included. So, it is clearthat grade of service in the group of links from/to JakartaToll Center, the backbone routes and important in Indonesia,is lower than links between other cities. So, it isunderstandable to receive many complaints against lowcompletion ratio from subscribers.

57 A- E -2Pao* 3

POOOR tuuGOOD I POOR

- I ... . .... .1

I' ~IO-'~ v .AOE O SRICE 1O96'-'`.0.0 l5! 1% !O 0%; -00I9 6 ~ 1961~GRACE OF SERICE G OF SERVICE

(A) TRUNK LI NKS IN TOLL NETPWORK (3) TRUNK UIKS FROM/TO AKARTAFIGURE 3 HISTOGRAM OF TRUNK LINKS CLASSIFIEO BY GRAOE OF SERVICE

Suspected causes of unsatisfactory grade of service are asfollows ;

(a) Unbalance of circuits equipped

Offered traffic between exchanges in the actual networkmay differ from the value forecasted at the planningstage, because of delay and change of the proposed lineunits increase in some locations. Therefore, review ofdesign may become necessary at each expansion step.

(b) Delay in installation

There are some cases that necessary increase of circuitsbetween exchanges cannot be carry out due toasyncronization of project implementation of some sub-system of the whole network, that is, switch,transmission, junction, power etc.

(c) Unactivation ot idle capacity

To analyze measured traffic data and to feedbask theresult to planning and operation/maintenance sectionsare important.

(d) Design of small circuit group

Number of circuits in nearly half of the links installedin less than 10 circuits. These links have lesstolerance against traffic deviation. Figure 4 shows theinfluence on the given grade of service in case of oneerlang excessed from the standard value.

L)

51

o 0

40

zC'30 .

20

10M

1, O 320 i5 0 8O SO 7 Sn 100NUMiEER Ct 1 RC, U TS

FIG-URE 4 1iNF L L ENE'-OF ti G EP A,V E--XCE SS FROM STAINOAR¢ ' VALUECN GRADE OF SENVtCE

_ 59 _ 4NLL9 IPag 1

SEI1>TIS SR 8X

Delays in System Commissioning

Outside Trans Com- Delay in com-plant Switching mission mi8sioning sLasiooing----------- (Month/Year) ------------- (mothb)

Medan Sukaramai t2 3/89 3/89 5/89 1Rantau Prapat 2/89 3/89 A 896/90 15Padang Panjang 5/88 12/88 12/89 12/89 17Payakumbuh 7/88 1l/ug ._ 12/88 4Solok 9/88 2 - 2/89 4PLB Talang Kelapa 12/88 2/89 3/89 2PLR Kentenujung 12/88 k2 /8 3/89 2Bats Raja a2 12/88 -- 2/89 0Prabumulih 12/88 12/88 12/89 12Curup 4/88 12/88 6L20 6/90 13Lubal Linggau 6/88 12/89 3/90 20Kedoya 3/89 52 3/89 5/89 1.ieruya 3/89 =2 3/89 9/89 5Jepara 9/89 Am 6/89 3/90 17Purworejo 11/88 39 6/89 3/90 15tUngaran 2/89 10/88 -^ 2/89 3Temajggung 1Li2 2 * 1/89 0Pemalang 8/88 " '12/89 3/91 30Blora 2/89 ;/&q 12f89 12/89 9SBY Darmo 2Lf89 9/89 9/89 0SBY Tandes 22 11/89 9/89 2/90 4Denpassar-l 11/88 -- 1/89 1Dilli ZLU -- -- 2.89 0Klungkung 2/88 1/89 4/89 4/89 13Tabanan 7/88 12/88 4/89 4/89 8Banjarmasin 3/89 12U9 - - 12/89. 8

- 60 - Pag 1

INWSSIA

IUMMMHE CIATIONS SECTOR STUD

Renelita .--I Mestment Program 1989-94

1. The Repelita V program will be implemented in two stages inaccordance with the availability of resources. Scale of the expansion andannual allocation are shown below.

(a) PERWNTEL Plan

Batch 1 Batch 2Line units Line units Total

600,000 800,000 1,400,000

(b) Annual Development Plan

1989 1990 1991 1992 1993 Total

TelephoneLine units 150,000 165,000 370,000 400,000 315,000 1,400,000Loca-tions 44 120 73 118 165 520

Telex 5,850 4,350 -- 3,000 2,000 15,200

2. Major projects to be covered by Repelita V program are listed below:

(a) Local telephone networkBatch I 600,000 l.u.Batch II 800,000 l.u.Total 1,400,000 l.u.

(b) Trunk switching systemDigital trunk switching 36,000 cct.

- 61 - iL= E-4Page 2

(c) Telex/data systemTelex 15,200 l.u.Packet data 2,000 cct.

(4) Outside plantPrimary cable 1,900 asp and secondary cable

(e) Terrestrial transmissionBatch ITrans-Sumatra digital microwaveJava-Bali second route digital microwaveRemote area (additional phase 1 and 2)Jakarta-Surabaya optical fiber cable

Batch IISurabaya-Bamnjarmasin SXKL (submarine optical fiber cable)Trans-Sulawesi digital microwave (Phase 1)Remote area (Phase 3 and 4)Rural area (Phase 3)

(f) Satellite transmission systemBatch I

100 SBKTDHA (Phase 2)SCPCPalapa B 2 RSBN (Phase 1)

Batch II46 SBKSBH30 SBKPalapa C

(g) OtherRehabilitation program for outside plant and microwave systemOutside plant maintenance centers

,~~~~~~~~~~~~~~~~~~~~~~~M Z-4

low of~~~~~~~~~~~~~~~~~~~~~~~~~~

fa "dfg in n i 9

peooos . MnIVA C L I e Fe L e Cs cL e L

telophftwh l L embag 296 ,s._176 A"16.9$.7 Mn 6.0 Sm 1263$51 I. ,3 4362

istom1 8.02 1, 09.0 UO.8§ 1S4.08 917.19 11.8 .3 11.72 245.0 102.6 l"70 ."t Xl.2 625.39 57.01

saellite _omasi 8.30 42$.04 77 1.s .60 M64 10.98 97." 2.41 . 111 2.50 to." 2.07 SW1 Os."

IblnAtm, 2.379 ' 5, ." 0.130 6.5t 0S.20 263.26 04.3 46420S 31. SO $.51 0.00 12.37 0.01 1,7 .20

Otbix ~ 0.14 '. 9." 0.00 $2.4 0.00 2.29 0.00 2. .00 09.39 0.00 0.0 0.00 *4.5

wpttlag lZtS ~10.92 5s.0 0.002 420.14 20.0 36 * M= 0 7817s.1 0.00 90 40.00 MAL 207.200 SA.07

-63- ANNEX E-5

Page 1

INDONESIA

TELECONMUNICATIONS SECTOR STUDY

Table E-5.1

HUMAN RESOURCE DATA

PERUMTEL's Employees br Category, 1983-88

Category 1983 1984 1985 1986 1987 1988

1. Management,administration 6,193 8,326 8,963 9,718 10,055 10,013

2. Engineers 686 663 796 879 891 954

3. T2chnicians 12,020 14,879 15,249 16,674 17,585 17,487

4. Operation 6,252 6,919 6,833 7,143 7,438 7,379

5. Other 3,837 4,673 4,370 4,588 4,924 4,457

Total 28,988 35,460 36,211 39,002 40,893 40,290

-64-

Page 2

PERII4TL's Emplovees hS Unit and Cateorv'(November 1988)

Engineersand Administra-

Unit technicians Operation tion Other Total

HQ 1,354 182 2,134 993 4,663I 1,329 647 603 582 3,161U1 8S6 347 367 150 1,720III 853 475 548 224 2,110IV 3,399 921 1,848 627 6,795V 1,674 824 762 264 3,324VI 1,830 886 753 248 3,717VII 2,362 1,356 975 467 5,160VIII 916 489 424 216 2,045Ix 789 330 364 117 1,609x 1,048 600 673 233 2,554xi 331 140 166 69 706XII 372 170 202 146 890OPS&T 1,225 7 124 91 1,447

Subtotal 193521 73A2Z 9.96 4.2 40.1Q1

Dept. of Postsand Telecom-munications 0 0 3 .0 3

Regional officeof Posts andTelecormimications 58 5 15 0 78

DOPT 16 0 48 27 91

PT NTi 10 0 4 3 17

Subtotal & 2 la

T;Oul 1a41 7.7 10.Oi3 4.&5Z 40.290

-65 -

Pago 3

TELEGOMNUNICATION SECTOR STUDY

Tale E-5.3j

PERUMNEL' E 1ioveca by Le'Il and Categp y(November 1988)

Engineers and Adoini-Level technicians Operation stratton Other Total

IV E 0 0 4 0 4D 0 0 13 0 13c 0 0 10 0 10R 0 0 16 0 16A 0 0 73 0 73

III D 109 1 58 15 183C 174 6 94 13 287R 350 47 354 55 806A 321 110 454 63 948

1I D 764 279 439 147 1,629C 1,372 534 863 172 2,941B 2,336 1,074 1.415 155 4,980A 5,354 2,302 2,383 778 10,817

I D 2,805 800 1,152 820 5,577C 3,328 1,575 1,505 972 7,380B 1,218 453 1,010 691 3,372A 310 198 170 576 1,254

Total 18.441 7.379 10034.457 40.290

s a ~~U2L,

PKRUtRll'E ffamIovieea by levl *nd Unit(Uo'umcbe: 1968)

OrgnitatLan Unit Dept. Ofc. PTLevel I 11 III IV V VI VII VIII X X XI XI IU XIII HQ PIT PIT DOPS In?? Sotl

Iv B 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 0 2 a *0 0 0 0 0 0 0 0 0 0 0 0 0 0 11 0 0 1 1 13C 0 0 0 0 0 a 0 0 0 0 0 0 0 8 0 1 1 0 105 0. 0 0 0 0 0 0 0 0 A 0 0 0 S0 1 2 2 0 16

A- 0 0 0 2 0 2 0 1 1 0 0 0 1 47 1 7 9 2 75

IZI D 5 1 1 16 3 3 7 1 1 5 1 2 S 111 0 ; 15 3 183-C 7 8 4 29 14 -l 14 19 4 0 4 2 1 7 158 0 7 5 4 267

a 33 12 20 16 30 38 38 1S 12 27 9. 9 59 404 0 17 4 3 806A 5? so 31 125 65 86 73 28 26 38 1S 22 18 339 0 12 1 2 948

II 0 93 53 62 220 80 143 136 63 42 69 28 33 89 508 0 5 5 0 1,629- C 164 183 140 438 230 227 353 106 147 202 48 68 93 534 0 8 0 0 2,941

a 432 196 236 633 554 469 656 250 237 307 70 95 119 700 0 10 15 1 4,960A 975 576 551 1,368 1,299 1,433 1,502 567 445 604 220 253 277 736 S 5 3 1 10,017

1 369 321 275 865 389 492 957 264 260 324 127 157 400 353 0 0 24 0 5,577C 693 277 410 1,538 585 647 881 484 309 496 133 178 301 384 0 0 4 0 7,380-3 s 241 46 169 1,119 206 147 504 132 93 280 39 51 64 281 0 0 0 0 3,372A 112 17 151 366 69 14 34 130 36 198 14 21 14 78 0 0 0 0 1,254

3.1 _61 1.720 2.110 6.795 2 3.-17 S.160 2.045 1.609 2.554 706 890 1.447 4.663 . 78 2 1 40.290

-67- , iDPage 5

SMMIA

IELECM GUIONST IL= STUDY

Table E-5.5

PERUMTELs Emoloyes in Headquarters by Cate&ory(November 1988)

Organization Tech- Admini-unit nicians Operation stration Other Total

Personnel 33 42 462 152 689

Finance 1 8 425 34 468

Operation 297 77 256 64 694

Supply 70 4 369 323 766

Development 441 1S 242 253 951

Inspectors 16 2 73 2 93

Planning 15 6 44 4 69

Training 364 27 205 102 698

R&D 117 1 58 59 235

Total 1,354 L 134 93 663

FANNEX S-5Paso 6

Tablo E-5.6

PEXRnUNTKs moloyep sn L oaitn artea p bv Level and rianizatLOn Unt(November 1988)

levwel Potaeer l lnencS Supply O4pation Dewlopeent Inspector. PlanSMI tmlaIn 348 total

IV E 1 0 0 0 0 0 0 0 0 1D 3 1 1 2 2 0 0 1 1 llC 1 1 1 0 1 1 2 0 1 8a 2 0 2 0 0 1 S 2 0 19A 8 6 1 7 5 e 5 2 5 47

Subtotal 15 9 A I £ 10 Al A t Z.

III D 16 9 21 7 15 11 7 11 14 Ul1C, 14 19 2- 12 38 10 14 19 3 158 isB 54 54 75 44 a8 iS 13 31 $2 404A 7S 38 64 39 59 9 2 31 22 $39

subtotal iln 2i2 121 102 221 Al 3 IL I 1.012

T1 D 44 34 104 63 159 3 4 72 25 508C 45 *1 68 54 125 6 5 151 39 534a 94 68 84 100 142 8 4 168 32 t00A 89 in 109 148 147 it 5 104 23 736

Subtotal 2Z 2a in Lal 2 n1 id *95 LIII

I D 63 27 36 130 44 1 1 49 2 53C 87 43 62 79 65 6 3 29 10 334a 65 21 38 67 5A 4 1 20 12 281A 28 6 B 14 8 I 0 9 4 78

Subtotal 2L ai 111 2a0 lt IA A 107 itl 1.Q96

Sotal 11"2 *6A 694 212 951 93 19 698 313 1431

-69-Page 7

TEEOMMNIMAIZONS SAMR STUDY

PERUNTEL'a Emolovees by Birth Year(November 1988)

Birth Year Numbor of employees Percent

1933 250 0.621934 294 0.731935 380 0.951936 452 1.131937 430 1.071938 538 1.341939 652 1.621940 770 1.921941 561 1.401942 872 2.171943 785 1.961944 876 2.181945 898 2.241946 740 1.841947 811 2.021948 878 2.191949 1,038 2.591950 1,156 2.881951 1,196 2.981952 1,874 4.671953 2,196 5.471954 2,201 5.481955 1,734 4.321956 1,475 3.681957 1,081 2.691958 1,167 2.911959 1,700 4.241960 2,135 5.321961 2,415 6.021962 2,905 7.241963 2,613 6.511964 1,914 4.771965 959 2.391966 173 0.431967 14 0.031968 11969 1Unknown 155

gtal 40. 290 10O.Q

-70- AMN LL5Page 8

TXIECQMMWNCATIONS SETR mmpD

PERIyELI's Employees by Education(November 1988)

Number ofEducation employees Percentage

University 808 2.01Academy 1,322 3.28Senior high school 20,658 51.27Junior high school 10,212 25.35Elementary school 7,290 18.09

Tbotal 40,0290 100.0

Male E-3.9

Ratio of Total Staff to Working Lines. 1983-88

Number EmployeesNumber of of main per 1,000

Year employees lines main lines

1983 28,988 503,253 581984 35,460 536,102 661985 36,211 602,356 601986 39,002 658,341 591987 40,893 759,128 541988 (est.) 40,290 800,000 50

- 71-E-5

Page 9

TETF£tHINDCTONE SCI RSTD

ILbAe E-5.IQ

gmomarison of Nanoower EfficiSncy among Regions

Coparison:Employees Employees

Number per per 1,000 mainof employees 1,000 main lines based

Office Persons Percent lines on Witel IV

Department of Posts andTelecommunications 3

DGPT 91 0.2 -- --

Region Office ofDepartment Pasrpostel 78 0.2 -- --

PT INTI 17 0.2 -- --

Headquarters 4,663 11.5

OPSAT 1,147 3.6 -- --

Vitel I (Medan) 3,161 7.8 49 2.3 x Witel IV

II (Padang) 1,720 4.2 65 3.1 x Vitel IV

III (Palembang) 2,110 5.2 55 2.6 x Witel IV

IV (Jakarta) 6,795 16.8 21 1.0 x Witel IV

V (Bandung) 3,524 8.7 43 2.0 x Witel IV

VI (Semarang) 3,717 9.2 55 2.6 x Witel IV

VII (Surabaya) 5,160 12.7 46 2.2 x Vital IV

trIII (Denpasar) 2,045 5.1 79 3.8 x Witel IV

IX (Banjarbaru) 1,609 4.0 65 3.1 x Witel IV

X (Ujungpandang) 2,554 6.3 69 3.3 x Witel IV

XI (Ambon) 709 11.7 120 5.7 x Vitel IV

XII (Jayapura) 890 2.2 115 5.5 x Witel IV

40,290 100.0

report no. 7u2-1nd indonesia telecommunications sector...

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