Foreign telecoms operators eye RI

Foreign telecoms operators eye RI

By I. Christianto

JAKARTA (JP): A number of overseas global satellite
telecommunications operators are seeking alliances with local
companies in order to tap into the country's telecommunications
sector.

Most of them plan to launch services using either medium-earth
or low-earth-orbit (LEO) satellites, some as early as the year
2000.

Among the Global Mobile Personal Communications by Satellite
(GMPCS) players attracted to enter Indonesia are Globalstar;
Odyssey Telecommunications International Inc; Intermediate
Circular Orbit (ICO) Global Communications, developed by
International Maritime Satellite (Inmarsat); the Afro-Asian
Satellite Communications; Asia-Pacific Mobile Telecommunications
Satellite; Ellipso; Global Communications; Signal; Marafon;
Orbcomm; Spaceway; Teledesic; and Telesat Mobile Inc.

Indosat's president Tjahjono Soerjodibroto said last week that
his company was negotiating with Globalstar of the U.S. to
operate ground stations in Indonesia.

He said other GMPCS operators seek cooperation with Indosat in
an attempt to expand their dealings to Indonesia.

According to existing regulations, foreign GMPCS operators are
allowed to operate in Indonesia only under joint operations,
joint ventures or joint-management agreements either with
Indosat, which runs the international telecommunications
business, or with PT Telkom, the provider of domestic
telecommunications services.

Cost is the major competitive edge among operators. Iridium
reported that the cost would be US$3 per minute including the
space segment fee, gateway fee and local operators fees.

ICO reported it did not intend to provide service to very poor
people. The company has compiled user group gradings, such as the
higher income bracket, mining sector and airlines. The rate per
minute is variable and less than $1.

Odyssey claimed the price could be reduced if operators could
improve efficiency in the frequency spectrum. It means the price
would depend on bandwidth.

Indonesia's telecommunications industry has grown rapidly in
recent years. The country has a number of satellites, with some
of them operated commercially.

Indonesia will also adopt a regional satellite-network digital
telecommunications systems prepared by PT ACeS which is equally
owned by PT PSN of Indonesia, PLDT Co of the Philippines and
Jasmine International Public Co Ltd of Thailand.

Other domestic firms recently signed cooperation agreements
with foreign GMPCS companies.

Indosat has set up a subsidiary called PT Indokomsat Lintas
Dunia to provide ICO services and facilities. Indosat spent
$12.87 million to acquire a 1.41 percent stake in ICO. The 10-
satellite system is expected to be begin service in 2000.

The ICO system will permit mobile voice and data
communications through a hand-held telephone anywhere in the
world -- on land, sea or air.

Another firm, PT Citra Sari Makmur, a private value-added
telecommunications provider which is 25 percent owned by Telkom,
has been appointed by Constellation Communications Incorporated
(CCI) of the U.S. as a service provider in Indonesia and
Southeast Asia.

CCI is a consortium of Bell Atlantic International, a U.S.
telecommunications giant, E-System Raytheon and Space Vest. CCI
plans to operate the Equatorial Constellation Communications
Organization (ECCO), a $550 million satellite-based
telecommunications service using 12 LEO satellites.

The first launching is scheduled for the second half of 1999,
while ECCO's commercial operation will commence in early 2000.

Telecommunications sources said the privately owned PT
Satelindo had also participated in Odyssey and Iridium.

Odyssey, set up by TRW of the U.S. Teleglobe of Canada, will
begin services around the globe by 1999. The system will use 12
satellites in the medium-earth orbit and seven earth stations
with the first satellite to be launched in 1999

The Odyssey system, involving an investment of $2 billion,
will use medium-earth orbits for its satellites,

Iridium, initiated by America's Motorola plans to develop
another system called Iridium, at a cost of $4 billion, using 66
LEO satellites.

Satelindo intends to sign agreements for the two projects
soon.

Globalstar

An executive of Globalstar, David C. Benton, told The Jakarta
Post that his company had secured a slot in the Indonesian market
as one of the company's shareholders, AirTouch Communications,
had signed an agreement with Jakarta-based firm PT Intidaya
Sistelindomitra.

Based on the agreement, AirTouch, a leading wireless
communications company based in San Francisco, California, and
Intidaya will offer Globalstar services in Indonesia.

AirTouch and Intidaya, a private Indonesian telecommunications
operator, will apply for a license and establish operations to
sell Globalstar services in Indonesia.

Intidaya, 25 percent owned by Telkom, will have primary
operating responsibility, while AirTouch will be responsible for
technical and marketing functions.

Globalstar is a low-earth-orbit satellite-based
telecommunications system that will offer low-cost, high quality
global telephony, data, fax, and position location services to
areas currently underserved, or not served by existing wire-line
and cellular telecommunications systems.

Globalstar will operate 48 satellites, with the first four
satellites scheduled for launching later this year. The firm aims
to commence commercial operations in 1998.

AirTouch, with a 6.4 percent stake, has exclusive service
provider rights for Globalstar in the U.S., Indonesia and nine
other countries.

Globalstar has been designed so that all calls, including
international calls, enter Indonesia's existing terrestrial-based
infrastructure from the local Globalstar ground-based gateway.

This gives existing service providers additional revenue
opportunities, and permits local regulatory authorities to
exercise their accustomed degree of regulatory control.

Users make or receive calls using hand-held or vehicle-mounted
terminals similar to today's cellular telephones. Because
Globalstar will be fully integrated with existing fixed and
cellular telephone networks, Globalstar's dual-mode handset units
will be able to switch from conventional cellular telephony to
satellite telephony as required.

In remote areas with little or no existing infrastructure,
users make or receive calls through fixed-site telephones similar
to either phone booths or ordinary wire-line telephones.

Globalstar, based in San Jose, California, is a limited
partnership led by Loral Space and Communications, Ltd, of New
York City. Along with cofounder Qualcomm Inc of San Diego,
California, the partnership includes 10 of the world's leading
telecommunications service providers and equipment manufacturers.