Government offers 3G licenses to investors

Government offers 3G licenses to investors

The Jakarta Post, Jakarta

The government is inviting telecommunications companies in
Indonesia to participate in a bidding process to provide third
generation (3G) mobile services (IMT - 2000) nationwide.

In an announcement on Monday, the Directorate General of Posts
and Telecommunications said that the domestic corporations that
were invited to bid were those that had no partnership
arrangements nor affiliations with the current telecommunications
operators.

"Those invited are national corporations that are not in
partnership nor affiliated with the fixed-line network operators,
mobile cellular network operators or mobile satellite network
operators in Indonesia," the announcement said.

At present, the telecommunications sector in the country is
dominated by two large telecom companies, PT Telkom and PT
Indosat.

Companies interested in participating in the bidding process
should also pay a bond amounting to Rp 5 billion (about
US$610,000). The companies or their affiliates must also already
have total assets in Indonesia of at least one trillion rupiah.

The third generation (3G) mobile service provides a wider
range of mobile telecommunications, and enable voice, data and
picture communication.

Telecommunications expert Roy Suryo said the bidding was
interesting as it could provide customers with more service
choices. And for investors, it was a lucrative business
opportunity considering the vast telecommunications market in
Indonesia.

"This is definitely interesting and it will attract many
operators to enter the business," he told The Jakarta Post in a
phone interview.

However, he said the public should scrutinize the bids,
arguing that although the process seemed to open opportunities
for companies outside the big operators, it might eventually end
up only benefiting the big operators.

"We have to pay attention to the details of the bids. Don't
let it benefit the big operators," he warned.

The Indonesian Cellular Phone Provider Association (ATSI)
predicts that the number of cellular phone subscribers will grow
by 43 percent, or about five million, from 11.4 million as of the
end of last year.

Of the total number, cellular operator PT Telkomsel holds a
share of about 52 percent, PT Excelcomindo 16 percent and PT
Satelindo along with Indosat 31 percent.

Telkomsel is a subsidiary of Telkom, which also operates
fixed-line services. Meanwhile, Satelindo is a subsidiary of
Indosat, a satellite and long-distance call operator.

The remaining one percent is held by smaller operators like
Mobisel, Telesera, Natrindo and Komselindo, which operate non-GSM
(global system for mobile communication) services.