Govt 'must lure telecommunications firms'

Govt 'must lure telecommunications firms'

JAKARTA (JP): The government should entice telecommunications
technology companies to invest in Indonesia by providing a
conducive regulatory framework, an executive in the industry said
on Wednesday.

General manager of Nokia Mobile Phones in Indonesia, Alexander
Lambeek, said if a regulatory framework were already in place,
there would be great interest among investors to operate the so-
called third generation (3G) of the mobile data
telecommunications technology in the country.

"There are great business opportunities and sufficient demand
in Indonesia for the operation of 3G. However, Indonesia has no
clear regulations on this particular sector. If this continues,
Indonesia may be left behind by its neighboring countries," he
said.

The 3G technology will converge the application of voice,
visual and data-based systems in a mobile phone.

Japan, Lambeek said, has started developing the technology and
is expected to apply it in 2002. Once it hits the market, it will
quickly spread all over the world, he said.

Lambeek said a transparent regulation was particularly
important to attract foreign investment to Indonesia since local
players would not be able to finance the development of new
technology by themselves.

However, the government is not likely to issue new licenses
for mobile phone operators in the near future or new regulations
concerning new investment in this sector, a government official
said.

The director general of post and telecommunications at the
Ministry of Communications, Sasmito Dirdjo, said he did not see
the need to license new operators to bring in more advanced
technology in telecommunications.

"We are still in the voice communications era, the first
generation technology. There may be some people who need 3G
technology, but the number is quite small. They are usually
businesspeople," he told The Jakarta Post.

It was very much unlikely for Indonesia to apply the 3G
technology in the near future, he said.

Sasmito, however, acknowledged the need to have more
transparent and comprehensive regulations in the country's
telecommunications sector.

He said the government would announce in March a new strategy
development plan on the sector, the contents of which would
include schedules for the issuance of new licenses for operators.

Indonesia currently has seven mobile phone operators offering
three different systems: the analog-based Nordic mobile telephone
system (NMT450), the analog-based mobile phone system (AMPS) and
the digital-based global system for mobile communications (GSM).
The seven operators serve about 2.05 million subscribers
nationwide.

In addition, the government awarded in 1997 five licenses --
without any tender -- to about 11 local firms to run the
European-based Digital Cordless System (DCS-1800) and the Japan-
based Personal Mobile Phone Service (PHS).

In 1998, the government again awarded licenses -- through a
tender process -- to another nine local companies to operate the
DCS-1800 and PHS systems.

However, none of these companies have started operations due
to the economic crisis, which hit the country in mid-1997. (cst)