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.