Relocation, tender of 3G key to industry

Kornelius Purba, The Jakarta Post, Jakarta

State revenue from the telecommunications industry will increase once the government expedites the relocation of Code Division Multiple Access (CDMA) operators currently operating on third generation (3G) frequencies, an industry executive says.

Apart from the relocation, the acceleration of the tender process for the 3G bandwidth frequencies is also urgent for the industry, said Jim Glinski, the president director of telecom equipment provider PT Alcatel Indonesia.

Describing the telecommunications industry in Indonesia as one of the world's most deregulated, he said many telecommunications providers and operators were waiting for the relocation and the bidding to expand their business activities here.

"I think if the allocations and the issuance of licenses was done faster, this would of course help the development of the business," Glinski told The Jakarta Post last week.

Although some companies are still conducting trial operations of the 3G system, not yet for commercial purposes, business will be booming in the coming years after the government has decided the winners of the tender, Glinski predicted.

The Alcatel executive, who has been located at the company's headquarters in Paris since 1997, said there was still huge growth potential for the GSM-standard generation and the 2.5G or the GPRS technology, although the 3G was much more advanced.

"I heard hundreds of thousands of 3G phones were sold in Indonesia without the 3G service, because people buy it as some kind of status symbol," he said.

The Ministry of Information and Communications has ordered all CDMA operators -- including Flexi and Indosat's StarOne -- which have a bandwidth of between 1,920 HMz and 1,990 Mhx to cease using their frequencies as the frequencies will be allocated to operators with the introduction of 3G technology to the country.

In the meantime, after several delays, the government is scheduled to open in November bidding for the frequencies and licenses for 3G bandwith.

The cash-trapped government expects about Rp 5 trillion (US$500 million) in revenue from the provision of frequencies and licenses.

The government has already granted 3G licenses to two companies though they are still not operational.

Meanwhile, when asked about problems his company is facing in doing business in Indonesia, the Polish-born executive replied: "Frankly speaking there are no big problems. Those we do have are more general problems -- but this is something that we share together with others."