PSN, partners get India license

PSN, partners get India license

JAKARTA (Dow Jones): A joint venture led by Indonesia's PT Pasifik Satelit Nusantara obtained a license last week to provide its satellite mobile phone service in India, said an executive with the Nasdaq-listed company.

The joint venture - AceS International Ltd. - plans to invest $30 million with India's Shyam Telecom Ltd. to get the system up and running later this year, said the company's president, Adi Rahman Adiwoso, in an interview with Dow Jones Newswires.

AceS will build an Indian "gateway" with its partner, allowing local customers to make calls through the company's Garuda-1 satellite.

Until the Indian gateway begins operations in the third quarter of the year, local customers will be able to access the Fsatellite through gateways in Indonesia or Thailand, Adi said.

The phone company launched its Garuda-1 satellite in 1999 in a bid to attract subscribers in remote areas of Asia-Pacific that don't have access to fixed and cellular telephone connections.

So far, AceS has spent US$675 million to develop and operate services in Indonesia and the Philippines. The company has licenses to launch in Taiwan and Thailand early this year. Services in India will begin after they start in these two countries.

Progress in building up a subscriber base has been slow amid the regional economic slump: AceS has only 5,000 customers compared to a 2 million capacity. But Adi hopes this will jump to 80,000 this year as the company expands its coverage to India.

"India is a good market," Adi said, noting the low fixed-line telephone penetration in the country. "They have only 13 million phone lines for 1.1 billion people."

Indonesia's Pasifik Satelit owns 35 percent in AceS. Other partners are Philippine Long Distance Telephone Co., Thailand's Jasmine International PLC. and Lockheed Martin Global Telecommunications, a subsidiary of Lockheed Martin Corp. of the U.S..

Pasifik Satelit's main shareholders are state-owned PT Telekomunikasi Indonesia (TLK), PT Elektrindo Nusantara, the U.S.'s Hughes Space and Communication International Inc. and Telesat Canada.

Aces plans to obtain licenses soon in Bangladesh, Pakistan, Sri Lanka, Cambodia, Myanmar, Vietnam and Laos, Adi said.

Meanwhile, the company has started to lobby China to open the world's most populous country to satellite phone services, he stated. The remote Western provinces of China is a major target.

Adi, however, said the company isn't betting on getting into China anytime soon, focusing instead on current business in Asia.

"China isn't in our business plan. But, if we get China it will be a very big bonus," he said.

Satellite phone operators need to build large customer bases to pay back the huge capital expenses of setting up infrastructure.

But the bankruptcy of global satellite phone competitors such as Iridium LLC (IRIQE) and ICO Global, hasn't deterred AceS, Adi said.

"We have enough money to fully operate AceS this year," even if the company doesn't generate any revenues, he said.

Adi emphasized that the company is financially healthy and it doesn't have to pay any liabilities until next year.