All major cellular phone operators in the country have tried out 3G

All major cellular phone operators in the country have tried out 3G

Zatni Arbi, contributor, zatni@cbn.net.id

XL, Indonesia's third largest GSM cellular operator with about
5.8 million subscribers, made a splash just before the start of
the fasting month.

It became the third Indonesian operator to launch a 3G trial
run, following Telkomsel in June and Indosat in August.

The launch event in Jakarta was attended by Minister of
Communications and Information Sofyan Djalil.

He demonstrated the video call capability of the 3G WCDMA
network as he chatted with Malaysian Minister of Energy, Water
and Communications Datuk Seri Dr. Lim Keng Yaik in Kuala Lumpur.

In Bali, Governor Dewa Made Beratha participated in the trial.
Two other trail locations were Bandung and Sabah. One of the
highlights of the test was the demonstration of the multiparty
video conferencing capability of this hot technology.

It is fairly commonly known that state-owned Telekom Malaysia
Berhad (TM) controls 27.3 percent of XL's shares. While this may
explain the choice of the international video call via Celcom,
TM's cellular operator, the call to Malaysia also demonstrated
the seamless interconnection between different operators.

XL's trial also demonstrated once again that the 3G technology
standard has matured and interoperability between different
vendors' equipment is no longer a problem. Like Celcom, XL uses
equipment supplied by Ericsson to deliver services in Jakarta and
Bandung.

In Bali, XL uses network equipment supplied by China's Huawei.
Telkomsel's 3G trial used equipment provided by Ericsson, Nokia
and Siemens, each covering different areas in Jakarta. That also
worked smoothly.

The three dominant cellular operators in Indonesia have
conducted 3G WCDMA trials to demonstrate their readiness to
provide the service. The pilots were very important in convincing
the government of their seriousness in implementing the
technology.

In 2003, the government granted five 3G licenses to Cyber
Access Communication (CAC), Natrindo Telepon Selular, Wireless
Indonesia, Telkom and Indosat. The first two companies will use
the UMTS 3G WCDMA technology, while the other three will offer
services based on CDMA2000 technology. Two years have passed, and
the two WCDMA companies have yet to start building their
infrastructure.

This lack of progress has prompted calls to the government to
revoke these companies' licenses. As this is not a feasible
option, especially now that Hong Kong's Hutchison Telecom has
acquired 60 percent of CAC's interest and Malaysia's Maxis has
bought 51 percent of Lippo Telecom, Natrindo's owner. Canceling
the licenses altogether would just damage foreign investor
confidence in Indonesia.

The most likely resolution might be to rearrange the
allocation of frequency bands. The three existing GSM operators
are hopeful that the Indonesian government will award them the
frequency bands needed for the provision of 3G services. The new
arrangement will be announced next month, and Minister Djalil has
hinted that existing operators will get priority.

With all three incumbent operators already demonstrating their
capability to offer 3G services, I guess we may be fairly
optimistic that next year we can start using the service. I look
forward to 3G's arrival because I really want to be able to
access Internet wirelessly. The 3G WCDMA can deliver up to 384
Kbps. Later on, when the 3.5G High Speed Downlink Access is
available, we will be able to have up to 11 Mbps -- enough for
high-definition TV streaming.

However, as Datuk Seri Dr. Lim Keng Yaik reminded us during
the call, we need content for 3G services to be of real use. And
there are at least two other important factors that will
determine the success of the 3G business: affordability and
transparency in billing.

Customers would love it if the operators charged them a flat
monthly rate with no hidden fees, so that they could easily
manage their monthly communication expenses.

In Malaysia, for example, Celcom offers different packages to
subscribers. On its website, the operator provides excellent
information about the packages in FAQ format. By the way, as the
minister said during the chat, one minute of video calling using
Celcom's 3G WCDMA service would cost about 23 US cents.

There is another challenge that the hopeful 3G operators will
have to tackle. In Singapore, 3G adoption seems to have gotten
stuck in neutral after reaching a certain point. The situation is
a bit strange, because in Singapore the cost of making a video
call is basically the same as making a voice call.

Clearly, after rolling out their commercial services next
year, the three operators in Indonesia will have to make
concerted efforts to educate the market. Otherwise, 3G WCDMA
services will meet the same fate as EDGE.