Indosat secures license from govt for DCS-1800

JAKARTA (JP): Publicly listed international telephone operator PT Indosat announced on Tuesday that it had secured a provisional license, in principal, from the government to provide a mobile telephone service under the GSM compatible digital cordless system (DCS-1800).

The state company said in a statement the provisional license was granted on Monday through an official letter from the minister of communications, dated Aug. 14.

It said the license would be valid for two years from the date of issuance to give Indosat time for construction and commercial preparations.

The provisional license also requires Indosat to provide cellular network access and services with a minimum coverage of 10 percent of the country's 210 million population, the statement said.

The company said the license was granted in accordance with the government' Blue Print Policy on Indonesian Telecommunications, which, among other things, provides guidances on the early termination of exclusive rights currently held by Indosat and the other state telecommunications company, PT Telkom.

"This principal license will, therefore, be accounted as part of compensatory measures for the early termination of our rights," the company said.

Indosat and its subsidiary, Satelindo, currently hold the exclusive rights to provide international telecommunications services until 2004, while Telkom controls local and domestic long distance calls until 2010 and 2005, respectively.

The government decided earlier this month to speed up the termination of Indosat's monopoly in the international telephone market to 2003, and Telkom's monopoly in the local and domestic long distance calls sector to 2002 and 2003, respectively.

Company executive vice president for corporate development Budi Prasetyo said separately Indosat expected to start commercial operations of its mobile telephone business by the end of next year or early 2002.

"Our service will be called Indosat Multimedia Mobile. Construction activities are expected to be completed in the second half of next year, so that we can start the service right away," he told journalists on Tuesday.

He said the bidding for network construction work was expected to be finalized in the next two or three months.

Indosat earlier said it had shortlisted six international telecommunications firms, namely Alcatel, Ericsson, Lucent, Motorola, Nokia and Siemens for the bidding.

Budi said Indosat had allocated at least US$200 million to finance the development of some infrastructure in the initial stage of service.

The company estimated it would need to spare another $600 million for the financing of more infrastructure in the second stage, he said.

"In the second stage, we will likely invite strategic partners to participate," he said.

He said Indosat would open its mobile telephone service in the greater Jakarta area as well as Bandung, Yogyakarta, Semarang, Surabaya, Denpasar and Batam in the first stage.

After five years of operation, Indosat expected to provide cellular phone access for nearly half of the country's population, he added. (cst)