Govt may protect satellite operator

Govt may protect satellite operator

JAKARTA (JP): The government may protect the business of PT
Asia Cellular Satellite System (ACeS), a satellite-based Personal
Communications Services (PCS) provider, from competition from
foreign firms.

"We will consider protecting ACeS, which will enter service in
1998," Minister of Tourism, Post and Telecommunications Joop Ave
told reporters at his office here yesterday.

"This doesn't mean that the government will automatically
extend the protection. But it would make sense for the government
to extend protection because ACeS is so far the only Indonesian-
based company willing to run such a business," he said.

He said that due to the rapid development of technology, the
telecommunications regulations in Indonesia need modification.

"ACeS's plan to ask for protection will be an input for this
modification," Joop said after witnessing the signing of
agreements between ACeS and its three major partners --
telecommunications equipment manufacturer Ericsson of Sweden,
state-owned financial firm PT Danareksa Finance and the U.S-
Russian satellite launching service Lockheed Khrunichev
Enterprises.

"It's appropriate for a nation to give a domestic company a
chance to breathe if it runs a business with technology developed
by the company itself," Joop said.

He admitted, however, that overseas companies are needed for
planning, consultation, development, operation and supervision.

ACeS's president, Adi R. Adiwoso, said recently that the
company wants protection until 2003, when the Association of
Southeast Asian Nations (ASEAN) implements its ASEAN Free Trade
Area agreement.

He said the government ought to give priority to a domestic
firm, instead of giving licenses to overseas companies to run
similar businesses in Indonesia.

Dozens of overseas Mobile Satellite System operators are eying
markets in the region. Among the satellite-based PCS operators
are Iridium, Odyssey, Globalstar, Teledesic, Intermediate
Circular Orbit, Global Communications, Orbcomm, Afro-Asian
Satellite Communications, Asia-Pacific Mobile Telecommunications
Satellite, Signal, Marafon, Spaceway, Ellipso and Telesat Mobile
Inc.

PCS, with MSS technology, offers cheaper communication.
Subscribers can receive voice and data with a single phone number
within the satellite coverage area. Air time for PCS costs
between US$1 and $3 per minute.

Adi said that ACeS will be able to charge only $1 per minute.

Set up in 1995, ACeS plans to provide satellite-based PCS by
1998. To run this system, the company will launch a satellite
currently under construction at Lockheed Martin Corporation's
facilities in the United States. The satellite will be called
Garuda.

ACeS, owned by PT Pasifik Satelit Nusantara, the Philippine
Long Distance Telephone Co. and Jasmine International Public Co.
Ltd. of Thailand, signed a contract with Lockheed Khrunichev
yesterday for the launching. The Garuda is to be launched between
July and September 1998 on a Proton rocket from the Baikonur
Cosmodrome in Kazakhstan.

Khrunichev has completed more than 200 successful launches
since its first flight in 1970, Lockheed Martin's program
director for ACeS, Paul Mellon, said. "The Proton D-1-e (rocket)
with its heavy lift capability and its outstanding success record
of 96 percent in the last 50 launches is the best launch vehicle
for the ACeS mission."

In yesterday's ceremony, ACeS also signed a $225 million
initial order with Ericsson to manufacture dual-mode satellite-
cellular telephone handsets, which will be able to access the
satellite and link up with local terrestrial cellular and fixed
networks. (icn)