Licenses needed to run satellite service telephone

JAKARTA (JP): The government will require any private firms linked with overseas satellite-based telephone operators to cooperate with the state-owned telecommunications firms if they want to offer the services in Indonesia.

Director General of Post and Telecommunications Djakaria Purawidjaja told reporters here yesterday overseas Global Mobile Personal Communications by Satellite (GMPCS) operators would not automatically be able to operate their services though they had tied up with private Indonesian firms.

"There's no guarantee either that a private Indonesian firm which owns equity in an overseas Global Mobile Personal Communications by Satellite (GMPCS) operator will obtain a license from the government to offer the services locally," he said.

GMPCS services are classified as a basic telecommunications service, which under the country's telecommunications law, must be run by state-owned companies, he said

In addition, the involvement of private operators in the Indonesian telecommunications industry (Law no. 3/1989) will be permitted only on condition that such firms cooperate with the state-owned companies under a joint-operation, joint-venture or management agreement.

There are two state-owned telecommunications firms, PT Telkom and PT Indosat.

Several overseas PCS operators have expressed interest in entering the Indonesian market. Most of them plan to launch services using either medium-earth or low-earth orbit satellites, some as early as in the year 2000.

Among the PCS operators which have tied up with Indonesian partners are Globalstar, Iridium, Constellation Communications Incorporated (CCI), Intermediate Circular Orbit (ICO) and Global Communications.

Globalstar which will operate 48 low-earth-orbit satellites has secured a slot in the Indonesian market as one of the company's shareholders.

AirTouch Communications has signed an agreement with Jakarta- based firm PT Intidaya Sistelindomitra. Based on the agreement, AirTouch, a leading wireless communications company based in San Francisco, California, and Intidaya will offer Globalstar services in Indonesia.

Iridium has also tied up with PT Bakrie Communications Corporations, a private firm wholly owned by the widely diversified Bakrie Group. Iridium, led by Motorola of the U.S., plans to use 66 low-earth orbit satellites.

Bakrie Communications is entitled to operate and deliver mobile satellite services in Australia, New Zealand and South Pacific countries.

PT Citra Sari Makmur (CSM), a private value-added telecommunications firm, has been appointed by CCI of the United States as a service provider in Indonesia and Southeast Asia.

CCI is a consortium of Bell Atlantic International, a U.S. telecommunications giant, E-System Raytheon and Space Vest. CCI plans to operate the Equatorial Constellation Communications Organization (ECCO), a US$550 million satellite-based telecommunications service using 12 low-earth orbit satellites.

Bakrie Communications, CSM and Intidaya, however, have yet to obtain a license to sell Iridium, CCI and Globalstar services in Indonesia, though Intidaya and CSM are each 25 percent owned by Telkom, Djakaria said.

"They don't have to obtain licenses if they are not going to provide or operate the service in Indonesia," he said.

Sources said officials at the Ministry of Tourism, Post and Telecommunications had encouraged GMPCS operators to consult first with Telkom or Indosat.

But as Telkom and Indosat showed a tough stance, the GMPCS operators chose to tie up with local private firms first with the hope that their Indonesian partners would do the negotiations with Indosat or Telkom, the sources said.

In the meantime, Indosat has set up a subsidiary called PT Indokomsat Lintas Dunia to provide ICO services and facilities. Indosat has a 1.41 percent stake in ICO which will apply 10- satellite system by 2000.

Indonesia will also adopt a regional satellite-network digital telecommunications systems prepared by PT ACeS which is equally owned by PT PSN of Indonesia, PLDT Co of the Philippines and Jasmine International Public Co Ltd of Thailand.

PT Satelindo has also participated in Odyssey, a consortium set up by TRW of the U.S. Teleglobe of Canada. The $2 billion system will use 12 satellites in the medium-earth orbit and seven earth stations with the first satellite to be launched in 1999

There are other systems which have been eying a slot in Indonesia. Among them are the Afro-Asian Satellite Communications; Asia-Pacific Mobile Telecommunications Satellite; Ellipso; Global Communications; Signal; Marafon; Orbcomm; Spaceway; Teledesic; and Telesat Mobile Inc.

Djakaria said that almost all of the GMPCS operators had approached Indonesia in a bid enter the country's potentially big market. (icn)