Satellite operator looks for protection

JAKARTA (JP): PT Asia Cellular Satellite System (ACeS), a satellite-based Personal Communications Services (PCS) provider, is seeking protection from the government to secure its planned business until 2003.

Company president Adi R. Adiwoso said over the weekend that Indonesia must be careful in extending licenses to overseas Mobile Satellite System (MSS) operators which plan to take advantage by penetrating the domestic market.

"ACeS is an Indonesia-based company which will provide satellite-based PCS in 1998. The company deserves to have protection at least until the ASEAN Free Trade Area being implemented in 2003," he said.

"Besides, ACeS, whose services will be handled in Indonesia by PT Pasifik Satelit Nusantara, will offer the cheapest airtime fare compared to other operators," he said.

Pasifik Satelit Nusantara has already been licensed by the government to run basic telecommunications services as the company is partly owned by the state-owned PT Telkom.

The involvement of private operators in the Indonesian telecommunications industry will be permitted only on condition that such firms cooperate with state-owned companies under joint- operation, joint-venture or management cooperation arrangements.

ACeS, equally owned by Pasifik Satelit Nusantara, Philippines Long Distance Telephone Co. of the Philippines and Jasmine International Public Co. Ltd. of Thailand, will have its first satellite launched in the middle of 1998.

The company, set up in June 1995, has ordered Lockheed Martin Corporation of the United States to build its first satellite, called Garuda. ACeS plans to operate two satellites orbiting at the geostationary orbit.

PCS, with MSS technology, offers a cheaper communications system. Subscribers can be reached by voice and data with a single phone number as long as they are in satellite coverage. Airtime fares range between US$1 to $3 per minute.

ACeS's service areas will include Japan, North and South Korea, China, Hong Kong, Taiwan, India, Sri Lanka, Nepal, Bhutan, Bangladesh, Myanmar, Cambodia, Laos, Pakistan, parts of Russia, Mongolia, Papua New Guinea and the members of the Association of Southeast Asian Nations -- Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

In addition to ACeS, there are dozens of such firms in the world, some which plan to operate Asiawide.

Among the multibillion dollar satellite-based PCS operators are Iridium, Odyssey, Globalstar, Teledesic, Intermediate Circular Orbit (ICO) Global Communications, Orbcomm, Afro-Asian Satellite Communications, Asia-Pacific Mobile Telecommunications Satellite, Signal, Marafon, Spaceway, Ellipso and Telesat Mobile Inc.

Penetration

Some of the operators aim to penetrate Indonesia's market, but at the moment ICO is the only one which has won a ticket to deal with the domestic cellular telecommunications race.

Through the state-owned international telecommunications provider PT Indosat, which holds 1.41 percent of ICO shares, ICO has a fixed slice of PCS business in the country.

ICO is a worldwide consortium initiated by the Britain-based International Maritime Satellite organization. The $2.8 billion project will use 10 satellites in two orbital planes and about eight to 12 ground stations.

In the meantime, other MSS operators, including Globalstar, Teledesic, Odyssey and Iridium, have also been lobbying the government to smooth their way into Indonesia.

Globalstar, whose current investors include France Telecom and Alcatel of France, Germany Deutsche Aerospace, Dacom and Hyundai of Korea, and AirTouch Communications and Qualcomm of the United States, plans to launch up to 56 low-orbit satellites to provide worldwide telephone and other digital communication services.

Odyssey, a consortium established by TRW from the United States and Canada's Teleglobe, also plans to operate 12 satellites in the medium-earth orbit.

Iridium, led by Motorola, plans to spend US$4 billion on a telephone network with 66 satellites to be sent into low earth orbit.

The $9-billion Teledesic, supported by American businessmen Bill Gates and Craig McCaw, plans to place 840 satellites in 21 low earth orbit planes.

The initial stages of the global networks are expected to commence within the next four to six years.

Adi reminded that the government should not license more than two MSS providers in Indonesia.

"The government, for instance, has issued a 'duopoly' policy on the international telecommunications services handed over to PT Satelindo and Indosat.

The 10-year exclusive rights to international telecommunications services in the country will expire in 2005.

Adi said that a similar policy is necessary in the satellite- based PCS business.

"Most of the providers are overseas companies which enter our domestic market. Our money will be taken out," he said

When entering a market in one nation, MSS providers usually look for one or more local partner as the national service provider, the party which markets and provides the PCS on a contract basis in that country.

The domestic firms affiliated with the main providers will just be local service providers.

However, from the side of technology, any MSS services will likely apply to spot in the world within the satellite coverage, including the modes of aircraft, vessels, vehicular and fixed terminals. (icn)