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)