Govt plans another tender on 3G licensing
Rendi A. Witular, The Jakarta Post, Jakarta
The government plans to repeat the tender process in July for companies wishing to be granted a license for advanced third generation (3G) cellular technology.
The bid process is part of its efforts to modify the telecommunications frequency allocations to make them more inefficient.
Maximizing the frequency allocation will enable the country to reap at least Rp 3 trillion (US$319 million) in proceeds from the licensing fees alone, which later can be used to install standard telephone lines down to the village level in several parts of the country that still have no access to telephones.
"We want to maximize the use of the 3G frequency bands so it can be used by more operators. Proceeds from these bands will be used for development in rural areas," said Minister for Information and Telecommunication Sofyan Djalil at the State Palace on Wednesday.
Sofyan said the tender would be held next month after President Susilo Bambang Yudhoyono signed a government regulation on the minimum licensing fee, in addition to the completion of an audit on the use of existing frequencies awarded to cellular operators.
The government has granted PT Natrindo Telepon Seluler/Lippo Telecom and PT Cyber Access Communications (CAC) -- an affiliate of Thailand's leading cellular operator Telecom Orange Asia -- 3G licenses and allocated a frequency spectrum in 2003.
However, the government has become frustrated at the lack of progress by the two companies in making use of the licenses.
It was not immediately clear how the companies would react to the government's new plan.
With 3G technology, cellular operators can provide multimedia facilities at faster speeds and with much more data than the outmoded cellular technology now being used here, which is classified as 2.5G. The 3G technology will also allow users to send, receive and download audio and video files much faster.
Sofyan said that there were 45 megahertz (Mhz) of 3G frequency currently available, and that would be on offer in the upcoming tender, with each operator allocated between 5 Mhz and 10 Mhz.
Sofyan, however, refused to disclose the cost of the frequency. For comparison purposes, a 5-Mhz frequency allocation costs approximately US$80 million in Australia and between $10 million and $20 million in the United States.
"Proceeds from the licensing tender will be used to help people living in remote villages by providing them with fixed- line of satellite-based telephone systems," he pledged.
Based on the ministry report, at present, less than 5 percent of the country's 220 million people can enjoy access to fixed- line phones.
Sofyan also said that the ministry would also order existing operators, which currently use the wide-band Code Division Multiple Access (CDMA) technology not to use the 3G frequency in their operations since it would disrupt the frequency of the 3G operators.
"I will ask all cellular operators with CDMA technology not to use the 3G frequency. They need to comply with the government regulation or face sanctions," warned Sofyan, while adding that the sanctions could include the revocation of the CDMA operating license.
CDMA technology allows the use of fixed-wireless service -- a phone service with limited cellular mobility designated areas that were first introduced in this country about two years ago.