Indonesian TV cable industry gets much-awaited boost

By Antariksawan Jusuf

JAKARTA (JP): At this lethargic time when every economic actor is playing a wait-and-see game, Indonesia's cable industry got a much-awaited boost.

First, a truce has been signaled between Hong Kong-based Star TV and Indonesia's main satellite and pay-tv Direct-To-Home (DTH) operator Indovision.

After months of lawsuits, the two have finally reached an agreement. In its DTH service for July 2000, Indovision offers new packages which include most of the Star channels which were cut in December 1998.

Star TV, owner of 45 percent stake in Indovision, has a 10- year management agreement with the country's only DTH operator which claims to have 27,000 subscribers.

Star had earlier opposed the migration from Palapa C2 to Indovision's parent company Datakom's S-band Cakrawarta-1 satellite. This dispute led to the axing of nine channels in 1998, including Star Movies, Star World, ESPN/Star Sports, and Channel [V]. Later on the two parties filed law suits against each other. Indovision sued in an Indonesian court, while STAR TV went to a Singapore court. The Indonesian court said it has no jurisdiction over the case. STAR TV won the case in Singapore.

Second, Lippo group's PT Broadband Multimedia, which runs the multimedia firm Kabelvision, is to inject fresh money to expand its massive project to develop pay-per-view, video-on-demand, e- commerce and to become a content provider of programs with an Indonesian identity. It will also introduce, for the first time, local television commercials in pay-television, which under the current broadcast law number 24/1997 is still forbidden. However, there is currently no government institution having authority to deal with the issue. The information ministry, which used to deal with issues related to the industry, was dissolved by President Gus Dur in 1999.

A source at Kabelvision said it has earmarked US$80 million, which it raised from a recent international roadshow, for the expansion.

Kabelvision has also secured the pay-tv rights in Indonesia for the upcoming Sydney Olympics. It plans to screen Olympic programming on six channels.

After the four-yearly event is over, Kabelvision will use the channels for programming with an Indonesian identity, be it kids', women's or educational channels with of Indonesian program input or imported programs dubbed into the Indonesian language.

Included in the strong management lineup of Kabelvision is Jim Guy Tucker, a former Arkansas governor who has 17 years experience in the U.S. cable business, and Jonathan L. Parapak, former Indosat president director.

Kabelvision's major shareholder is Hongkong-based AcrossAsia Multimedia Ltd. which owns 57.62 percent of the company. Four other Lippo subsidiaries- PT Reksa Puspita Karya, PT Mulia Sindo Mitra Adijaya, PT Langgeng Gita Muliatama and PT Utama Sejati Prima Indah - respectively own 16.69 percent, 4.93 percent, 1.89 percent and 1.89 percent.

PT Datakom Asia, which is also the holding company of Indovision, has 13.31 percent in it with the remaining 3.67 percent being held by the public. PT Broadband Multimedia, formerly known as PT Tanjung Bangun Semesta, is listed on the country's second market, the Surabaya Stock Exchange, in East Java.

AcrossAsia Multimedia Ltd. was itself listed in Hongkong last month with an opening market capitalization of 2.13 billion dollars.

"We are optimistic of reaching a total target of 450,000 subscribers by the year 2002," said Kabelvision Corporate Secretary Parmagita.

She said Kabelvision expects to bring in 5,000 new subscribers every month.

Currently it claims to have 119,140 home pass subscribers, 22,000 individual family subscribers, 250 SMATV subscribers and 3,000 signed-up hotel rooms.

Two other cable operators, PT Indonusa Telemedia (Indonusa) and PT Multimedia Nusantara (Metra), seem to be also playing a wait-and-see game.

"For the time being, we holding off our expansion projects until the end of the year," said Indonusa General Manager Srihanto Nugroho. The massive expansion of the cable operator, 45 percent of whose shares are held by PT Telkom, is expected to take place in 2001 when all of Telkom's fiber optic cables are in place.

Indonusa claims to have 200 subscribers and expects to have 2,000 next year.

Meanwhile, Metra, which also operates in East Java's Surabaya and in Bali, claims to have 5,041 outlets, including 259 individual family homes, and 40 hotels.

"The market is still wide open, but it all depends on the macroeconomic situation," said Metra spokesman Lukman Adjam.