`RI not ready for 3G technology'
Fitri Wulandari, The Jakarta Post, Jakarta
The government's offer to build the much-hyped third generation (3G) mobile service nationwide has received cool responses from telecommunication players, who said the service would not sell in Indonesia, which was still largely a voice market.
Rudiantara, the chairman of the Indonesian Cellular Phone Provider Association, said the service did not yet have any commercial value.
"The technology is relatively new while consumer buying power and market demand are still low. Thus, its commercial value is not there yet," Rudiantara told The Jakarta Post in a phone interview.
Hasnul Suhaimi, commercial director of giant phone operator PT Indosat, was of a similar opinion saying most of Indonesia's 11.4 million mobile service subscribers used their cell phones only to exchange voice messages. A very limited number used them to exchange data.
Indosat operates two cellular phone services, called Satelindo and IM3. Besides, it provides satellite and long distance call, and fixed-line services.
Hasnul said that the General Pocket Radio Service (GPRS), which is a data-exchange facility available to IM3 subscribers, accounted for a mere one percent of IM3's total revenue. This illustrated how exchanging data via cell phones was still unpopular in the country.
Dubbed the two-and-a half generation mobile service, GPRS is deemed as a necessary transition between the second generation and 3G. It enables high speed mobile data transmission of applications such as mobile Internet browsing and e-mails.
Meanwhile, PT Telkomsel, whose subscribers make up 52 percent of the total number of subscribers nationwide, could not be reached for its views. Telkomsel is a subsidiary of the country's largest phone operator, PT Telkom.
Third-generation mobile phone services allow speedy access to data and video through the Internet.
The technology has caused a fuss around the world. In European countries like Britain and Germany, telecoms operators paid billions of dollars to the government for 3G licenses. Many governments then used the issuance of 3G licenses as a chance to quickly rake in billions of dollars in revenue.
In 2001, Japan's NTT DoCoMo introduced the world's first 3G technology enabling users to relay video images and download music.
The government announced on Monday through advertisements in various papers that it was offering 3G licenses to telecommunication companies in Indonesia through a bidding process.
According to the announcement, only those who have no partnership arrangement nor affiliations with the country's existing telecommunication operators may apply for the 3G licenses.
This means the country's two giant phone operators will not be able to enter the market.
Hasnul said this prohibition might hamper the development of 3G technology here because the future 3G operators must be new companies who do not have a costumer base. At the same time, they have to sell relatively new products.
"Usually, only old cellular subscribers have the capability to buy the service. Not new ones. As such the future 3G operators will have to attract the current cellular subscribers to switch to their services," Hasnul explained.
Hasnul added that in many countries, the existing operators were allowed to bid for 3G licenses as they had a customer base.
Both Hasnul and Rudiantara agreed that the technology would only become feasible in four to five years time.