In
August 1746, Indonesia’s first postal service was established by
Governor-General G.W. Baron, the country's Dutch colonial ruler, in the
capital city Batavia (modern-day Jakarta). In 1906, post and telegraph
services were brought under the auspices of a new agency within the
colonial government -- Posts, Telegraphs and Telephones (PTT). After
Indonesia declared independence in 1945, the new government seized
control of the postal service. In 1961, PTT was converted from an
official government agency into a state-owned company.
The public postal operator of today -- PT Pos
Indonesia -- came about in 1965, when postal services were separated
from telecommunications services. Pos Indonesia is still state-owned
and is the official carrier for Indonesia's 230 million
people.
Today, Pos Indonesia employs about 26,000
workers in nearly 20,000 permanent post offices. Traditionally, the
company has provided letter post and financial services. But in recent
years, Pos Indonesia has expressed a desire to participate in the
development of Indonesia's information infrastructure.
Pos Indonesia's growth has paralleled that of the
Indonesian economy in general. At the height of the Asian economic
crisis in the late 1990s, mail volume was just 3.38 pieces per capita
each year. By 2007, as Indonesia and other emerging markets in Asia
recovered, per-capita mail volume reached 3.989 pieces annually -- an
increase of about 18 percent. In November 2009, Pos reported having Rp
6.62 trillion (US$715 million) in assets.
Structure
As of
2007, Pos Indonesia operated about 20,000 permanent post offices that
each served an average of about 11,600 people. Employees of
Pos Indonesia unionized in 2000. Because Pos serves more than 17,000
islands throughout the country, the company relies on both
private and government train, bus, airplane, and ship operators to aid
in the transportation of mail.
Mail has been
collected on average once per work day (Monday through Friday) from
boxes in urban areas and twice per week in rural areas. Deliveries were
made an average of three times per working day in urban areas and two
times per week in rural areas.
Pos Indonesia offers
standard letter mail as well as some express services. The post also
offers some direct mail services, whereby it receives letters
electronically and then prints and delivers physical
copies.
The Indonesian government has granted fuel
subsidies to Pos Indonesia in order to offset the cost of
transportation.
Pos shares the revenue
from terminal dues with the state treasury.
Business reforms begun in the late 1990s continue
today. Priorities in Pos’s transformation
include:
1. Investment in
training and coaching tools for
employees.
2. Implementation of
new technology.
3. Revamped
service processes with an eye toward improving
efficiency.
Pos Indonesia has established the
electronic "Wasantara Network" to address the challenges posed by its
vast coverage area. Wasantara serves as Pos Indonesia’s "Intranet" for
operational purposes and as a support for commercial activities in the
field. The network links all of Indonesia’s main post offices with the
Ministry of Communications.
Indonesian consumers
may also access the Wasantara Network from their own computers or from
Warung Pos Internet access points at post offices and other places
throughout the country.
Liberalization
Although
nominally an independent company since 1995, Pos Indonesia remains
state-owned. Before 1995, when it was officially a government agency,
Pos enjoyed the exclusive right to collect, transmit, and deliver all
letters and post cards. That monopoly has often been ignored.
Pos Indonesia consistently sought stronger monopoly protection on
letters weighing less than 500 grams, particularly during a 2006 debate
over draft postal legislation. But in September 2009, the Indonesian
House of Representatives bucked that pressure and put an end to Pos's
nominal monopoly as the country's lone postal
operator.
Competition
In
the market for letter mail, more than 600 licensed independent "postal"
companies also operate in big cities and towns throughout the country.
These companies offered quasi-postal services and the delivery of
letters even before the official liberalization of the Indonesian
postal market in 2009.
Many cargo and freight
companies also handle letters and packages. In the express-mail market,
such the world's largest international shipping titans offer
substantial competition to Pos Indonesia.
Given the
low postal volumes following the financial crisis of the late 1990s and
the demands of universal service (20,000 retail units over two million
square miles), Pos Indonesia has faced pressure to "add value to the
basic postal network," as a recent World Bank report put it. Pos hopes
to achieve such an objective by leveraging its Wasantara Network to
offer consumers hybrid mail (electronic mail printed remotely) and
other Internet-based services.
Regulation
Before
1995, the Indonesian government served as both operator and regulator
of the postal marketplace. A restructuring effort was begun in that
year that granted Pos Indonesia greater managerial and decision-making
autonomy.
Currently, the Directorate General of
Posts and Telecommunications (DG Postel) is the regulatory body
responsible for developing, implementing, and maintaining postal policy
in Indonesia. In a supervisory role, the Ministry of Communications
ensures that Pos Indonesia’s policies are in line with established
national guidelines. Delivery time and transportation connectivity
standards for Pos Indonesia’s mail delivery system are set according to
standards outlined by the Universal Postal Union
(UPU).
With a new focus on "business culture," Pos
Indonesia has set up five service divisions -- transportation,
stamp-collecting, technology and information systems, parcels, and
property -- to serve as "profit centers," with the intention of
granting greater autonomy to regional directorates. Since the
1995 reforms, Pos Indonesia has reported steady increases in total
revenues -- even with the deduction of interest paid on assorted
government loans. Universal Service and
Pricing
Pos
Indonesia’s universal service obligation includes reception, transport,
and delivery of mail throughout the Indonesian archipelago's two
million square kilometers of territory. As a result, the company
enumerates seven different categories of mail with delivery speeds that
range from several hours to several days.
The 2009
law providing for liberalization of the Indonesian postal market
re-affirmed Pos Indonesia's universal service obligation, including
"cooperation with local and international postal service operators,"
according to Mohammad Nuh, Indonesia's Communication and Information
Technology Minister.
The Indonesian government must
approve of all basic postal rates for letters and postcards.
Futures/Outlook
Hoping
to bounce back from losses of Rp 40 billion (US$4.32 million) in 2008,
Pos Indonesia is set to invest US$64 million in new infrastructure. The
bulk of this investment, which represents a six-fold increase in
capital expenditures relative to their 2009 level, will be devoted to
electronic applications, as opposed to paper ones.
With the new infrastructure, Pos Indonesia hopes to
expand its breadth of services. The company projects a 50-percent
increase in profitability in 2010 thanks to planned initiatives in
microfinance, money transfer services, electronic bill payment, and
business logistics. Pos expects to profit Rp 90 billion (US$9.5
million) on revenue of Rp 3.7 trillion (US$399.6
million).
The Indonesian government sees the
expansion of Pos Indonesia's network as crucial to building the
nation's economy. Aided by its existing electronic capabilities -- like
the Wasantara Network -- Pos Indonesia hopes to make the transition
from national post to major player in the information
economy.
