Ministry to audit 3G license holders
The Jakarta Post, Jakarta
Faced with problems of ineffectiveness in firms currently holding 3G licenses, the Ministry of Information and Communications is undergoing an audit on the telecommunication companies.
"We are auditing the companies on their efficiency and trying, overall, to work out the problems in frequency allocations thoroughly," Minister of Information and Communications Sofyan A. Djalil said last week, adding that the audit should be completed within two months.
The government had 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 frequency spectrums in 2003.
To date however, the two companies are not yet operational.
3G is a third generation, advanced technology which would enable cellular subscribers to enjoy triple-play technology such video streaming, video conferencing through cellular phone, in addition to much faster data transfer.
At present, the country's mobile phone operators apply the less-advanced 2.5G technology.
The country's largest cellular-phone firm Telkomsel was also granted a license to run a 3G-based radio network in October last year, but has yet to receive a frequency bandwidth slot to transmit data as there is not enough frequency bandwidth left.
However, it has received a frequency gap to run trials, which the company said would be launched in the middle of the year.
Since the 3G license is for trial only, Telkomsel will still have to wait for an operating license and frequency bandwidth from the Ministry of Communications.
Separately, another telecommunication firm PT Indosat has also expressed interest in entering the new technology market.
"We will prepare the infrastructure if there are possibilities of getting a license," Indosat corporate secretary Sutrisman said.
Elsewhere, after the ministry had finished the auditing and rearranged the frequency allocation, Sofjan suggested, without elaborating, that the 3G license tender process be revised.
Still, according to the Telecommunications Regulatory Body (BRTI) -- the agency that regulates the industry together with the ministry -- the previous tenders had been conducted in accordance with existing regulations and the companies that were granted the licenses were the best at that time.
"There were 23 companies that joined the bidding and they were shortlisted to five before the winner was announced," a BRTI member, Suryadi Azis, said.
Meanwhile, the ministry is also figuring out how to better arrange frequency allocations for operators wishing to enter the 3G technology market. Sofjan said the ministry would come up with options to resolve such problems soon.
Experts have said that the need to rearrange the frequency allocation to make it more efficient thus allowing more industry players to come in is crucial, so as not to risk losing millions of dollars in potential annual revenue and the opportunity to provide more access to the technology for the public.
In Australia, the license fee for a five-megahertz frequency allocation for third generation (3G) cellular technology is set at US$80 million, while in the United States the fee ranges from between $10 million and $20 million. (003)