JAKARTA, 31 July 2007 - The government is preparing telephone links to all villages in the country by the end of 2008, told Minister of Communication Muhammad Nuh on Tuesday. Some 38,000 villages - over half of the total of 70,000 - still don't have telephone links according to the minister during a lunch with foreign reporters. "We start with 18,000 villages for 2007 and the rest, 20,000, in 2008," he said.

The minister said that the infrastructure would be improved by using a fixed percentage of funds originating from the country's two main telephone providers PT Telkom and PT Indosat, both state-owned enterprises. Currently 1.25 percent of the expenditures of the companies would be reinvested in telecommunication infrastructure in the country. In the past the money was invested by the companies themselves in their own projects, but now the money will go to the government which will spend it instead.

"From this budget we want to expand telecommunication infrastructure in the villages," he said. He added that the government was to spend the money in areas that would otherwise be ignored by the companies. The archipelagic nation with over 17,000 islands relies heavily on satellites for it's telecommunication needs.

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