Government outlines rules for satellite telecom firms

Government outlines rules for satellite telecom firms

JAKARTA (JP): Satellite-based telecoms service operators
planning to enter the Indonesian market must work with state-
owned telecommunications operators under a joint-operation,
joint-venture or management agreement, says a senior official.

Director General of Post and Telecommunications Djakaria
Purawidjaja said yesterday a subsidiary of state-owned companies
may also enter the market under a similar cooperation
arrangement.

Several overseas satellite-based operators have expressed
interest in entering the Indonesian market. 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 companies which have approached Indonesian partners
are Globalstar (with 48 LEO satellites), Odyssey (medium-earth
orbit satellites), ICO (with 10 LEO satellites) and Iridium (66
LEO satellites).

Djakaria said he had so far never received proposals from any
companies affiliated with the state-owned telecommunications
firms PT Telkom or PT Indosat asking for satellite-based
telecommunications service licenses.

A consortium of Indonesian, Filipino and Thai firms is also
working on a satellite-based Asian telecommunications system, to
be called the Asian Cellular Satellite System.

Meanwhile, PT Citra Sari Makmur (CSM), a private value-added
telecommunications firm which is 25-percent owned by Telkom, has
been appointed by Constellation Communications Incorporated (CCI)
of the United States 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 US$550 million satellite-based
telecommunications service using 12 LEO satellites.

ECCO's satellites will be built by the winner of a tender,
either Lockheed Martin or Matra Marconi. The company to construct
the satellite launcher will be selected among Boeing, Lockheed
Martin and Orbital Sciences. The first launching is scheduled in
the second half of 1999, while ECCO's commercial operation will
commence in early 2000.

Bell Atlantic's executive director, Robert B. Harmon, said
Monday the agreement between CSM and CCI was signed last August.

CSM's president, Subagio Wirjoatmodjo, said his company handed
over 25 percent of its shares worth Rp 5.3 billion ($2.2 million)
to Telkom on Nov. 9 in order to win the satellite-based
telecommunications service license.

"As ECCO's service provider in Indonesia, CSM will either use
its current earth stations or prepare two new stations to be
located in Jakarta."

CSM, which operates a Very Small Aperture Terminal, a micro
earth-station communications service, is 25 percent owned by
Telkom, 38.29 percent owned by Subagio Wirjoatmodjo and 36.71
percent owned by PT Bell Atlantic Indonesia.

According to Wirjoatmodjo, CSM's profit is estimated to
increase by 20 percent to Rp 14 billion this year. (icn)