Held at the World Bank-Jakarta Office
Jakarta, 27 August 2003

Distinguish Guest,
Ladies and Gentlemen,

Allow me first to thank my friend, Mr. Andrew Steer (The World Bank Country Director for Indonesia), for a nice arrangement and letting us use the Bank facilities to held this night Video Conference.

Also I would like to thank the Organizing Committee and all sponsors, that support this event, which I believe all of us agree that the issues that we are going to exchange and learn the experience from best practice, is very important for overcoming the problem related to ICT infrastructure, and the problem of increase the access and services. In this connection, the two words, namely Telecentres and USO (Universal Service Obligation) seems like two simple words but it has important meaning, interrelated each other, and has significant role to overcome the new Missing Link: The Digital Divide, that generally describe the unequal division of ICTs between different socio-economic groups within the country. It identified major differences in household telephone, computer and Internet availability in terms of income, age, location and educational attainment.

The digital divide exists between countries at different levels of development, and within a country, separating cities from rural areas, the rich from the poor, those with a higher education from those without one, men from women, and the young from elderly. Overcoming the lack of infrastructure and reducing costs, may increase access to ICTs but does not guarantee that people will make use of them. Here there are two barriers. One is training. While there is no need for special instruction to use telephone, today’s technologies are far more complex and demanding. The Internet is of little use to people who do not know how to take advantages of electronic access to information to improve their lives. A second barrier is that of not having a specific reason to use the Internet. While there is no shortage of anecdotes on how ICTs are being used to improve welfare at grass-roots level, there is a lack of compelling research on how ICTs can transform the development process in poor nations. There is an increasing recognition that poverty, illiteracy, epidemics and bad governance cannot be decisively fought without better access to information. Because ICTs can store and disseminate information efficiently, they are an important tool for overcoming development obstacles. Access to ICTs is thus a way of leapfrogging into development.

Ladies and Gentlemen,

The focus of the Video Conference tonight is Telecentres and USO. Back to the origins, I recall the first telecentres wash established in the rural Swedish farming community of Velmdalen in 1985. Spurred by government investment, the telecentres movement soon spread from Sweden to the UK, Canada, Australia, and by the mid-1990, hundred telecentres had emerged in rural areas around the world. In Indonesia, goes back to March 1999, following a workshop in Jakarta, organized by the Ministry of Cooperative and Small Enterprises, the Indonesian PER (People’s Economy Telecentre) was established. During that time, it has collaborated with cooperative, small businesses, the telecom sector and NGOs to help create more than 300 start up PER telecentres service providers. To launch their webpage, PERNetworks secured more than 15 domain names. The initial capitalization of PERNetworks comes from a variety of sources, but financing from private investors is still under negotiation (at that time), and the development of initial share capital from as many as possible of Indonesia’s more than 125.000 cooperatives.

PT. Telkom (Indonesia’s state-owned telecommunication company) has agreed to provide PERNetworks member with flat rate local access to data transmission from anywhere in the country as long as there are available connection to its communications servers. PT. Posindo, the Indonesian Postal and state-owned Internet service provider, has been a partner for to provide PERNetworks members with initial free access to more than 4000 Internet and e-mail accounts throughout its nation-wide data services. PERNetworks is planning to networking the various members of the Police cooperative (INKOPOL) that sells food and other household comsumeables to police and their families. PERNetworks has also developed Wartelnet, an Internet service cooperative which is focused on providing Internet services to more than 120.000 Wartels in Indonesia. The PER list of services includes: an electronic news services; networked financial services; tele-education; networked trading and auction services; audit services online; networked access to business planning, market and consultancy services. But after more than a year for campaign, it is understood that providing technology to telecentres without providing the business that accompany the technology will not be sustainable. Therefore, the PERNetworks is the past story of a movement to develop telecentres in Indonesia.

Telecentres as a means of achieving universal access and services are often a fast cost-effective approach to providing ICT access to underserved communities. They can also play a significant role in poverty reduction, ranging from job creation to providing ICT skills. Telecenters can therefore assist certain countries (like Indonesia) to achieve their universal access and/or service requirements. Most studies show that telecentres can benefit not only their target communities, but offer significant rewards to private sector investors as well. At the same time, telecentres are not always an ideal solution to universal access. A telecentre’s success and impact depends on many factors, such as regulatory and legal policies, population density, income levels, and the quality of telecentre management and staff. More over, telecentres are not the only answer to serving marginalized communities. There are another models of telecommunications development that may provide important lessons on telecommunications access issues and sustainability strategies.

Watching the number of telecentres that has grown exponentially around the world, we will see there are four supply-side drivers in the ICTs sector account for this growth: (1) Donor agencies; (2) Market and regulatory reform such as developing USO and rural access funds; (3) A new focus on demand-driven approaches, spurred on by the growth of SMEs and community organizations across the developing world; and (4) The Emergence of new technologies, particularly the commercial development of wireless technologies (both mobile and fixed).

In fact, the donor community, particularly international donors, has been at the front of funding telecentres design, implementation, and evaluation. Its effort have helped build telecentres in such place as Viet Nam, Afghanistan, Nepal, India, Korea, Bhutan, Mali, Tanzania, Uganda, Benin, Suriname, Madagascar, Bolivia, but except Indonesia. This international donors have embraced telecentres as a cost-effective way to deliver telecommunications access and provide training in ICTs. This has served a positive purpose in that the donor community has focused attention on a new and existing model, funded innovative projects, and has begun to evaluate and disseminate lessons learned, but still difficult to determine the most important factors for success and sustainability or to generalize lessons learned from on-going telecentres operations. Therefore, we need to learn from best practice on how they set up key parameters in telecentres development, and we need to asses the four supply-side drivers that I have mentioned, in order to come out with such recommendations that appropriate for Indonesia’s conditions cocerning the telecentres development, and the potential for private sector involvement. This are among others the issues that we shall discuss tonight.

Ladies and Gentlemen,

Tackling the digital divide as well as Telecentres and USO is not as easy as it seems. While there have been countless studies canalizing the problem, the barriers are complex and there is no one size fits all solution. There are those who argue that the gap is caused by a lack of market liberalization. This does not take account of the fact that many countries (include Indonesia) have opened their ICT sector but that competitive markets have failed to meet the needs of the marginalized. Universal access to ICTs may not be economically viable when measured in pure accounting terms.

This also a challenge to the prevailing development wisdom of competition in the concept of sustainability. A major question is the capacity of developing nations (like Indonesia) to absorbs ICTs beyond their level of economic development. This question also need an answer. There are also some who argue that the problem is on the supply side and had more infrastructure is needed. Again, this argument does not recognize that in some countries a lack of awareness or language issues are bigger barrier to ICT use than infrastructure. Accordingly, effective solutions will require a triumvirate pact between governments, development agencies/donors, and the private sector. This triumvirate pact requirement also prevail to the efforts that taking in order to develop the telecentres, and the potential for private sector involvement in telecentres development.

Thank you.