Indonesia to go digital by 2015

The Jakarta Post, Jakarta | Tue, 03/03/2009 7:27 PM  

Indonesia is expected to go all digital by 2015 for all electronic appliances, including television, an official at the Communications and Information Ministry (Depkominfo) said Tuesday. 

"By 2015-2016 Indonesia is expected to have gone 'totally digital'," Director General of Communication Services and Information Dissemination at the Information and Communications Ministry, Freddy H. Tulung said, as quoted by Antara news. 

He added that by 2015-2016 all analog appliances would be phased out due to a cease in production. 

"We even hope things would take place sooner because every year we evaluate to smooth the process," Tulung said. 

According to Tulung, there are three stages to appliance digitalization in Indonesia. 

Throughout 2008 the ministry has allocated time to publicize digital appliances. 

Within the 2012-2015 period, the ministry will expand digital coverage in all areas so as to include medium-sized and small cities. 

"Increasingly we have also increased the issuance allotment for digital permits while phasing out the issuance of permits for analog appliances," Tulung said. (amr)

Axis offers affordable GSM services

The Jakarta Post, Thu, 04/24/2008 12:25 AM 

 

The latest player in the cellular industry, PT Natrindo Telepon Seluler, launched its GSM services in Java on Wednesday under its new brand name, Axis.

 

President director and CEO Erik Aas said the company offered more simple, transparent and competitive pricing than its competitors.

 

"Cellular users here often feel deceived (by complicated pricing). To avoid paying more, they have to change operators over and over again, which is really unnecessary," he said. Thus, he said, Axis offered a pricing mechanism that was transparent and measurable by subscribers, offering Rp 60 for a text message, Rp 60 per minute for calls between Axis numbers and Rp 600 per minute for calls between different operators.

 

Axis GSM coverage currently includes East Java, West Java, Greater Jakarta and Banten. The network is planned to expand to Sumatra, Central Java, Bali and Lombok.

 

"By the end of the year, we should have approximately 3,700 base transceiver stations in both Java and Sumatra. We are investing US$1 billion for our operation and infrastructure development here," Aas said.

 

Though a newcomer against incumbents such as Telkomsel, Indosat and Excelcomindo, Aas said he was confident of Indonesian market potential since about 150 million people did not yet have mobile phones.

 

"This makes it perfect for a GSM provider like us to contribute to the nation's growth in terms of making GSM services more affordable," he said.

 

Natrindo is now 51 percent owned by Saudi Arabian firm Saudi Telecommunications Company after the company acquired shares from Malaysia's Maxis Communications Berhad in June. Maxis now controls 44 percent. (lva)

 

 

GSM association plans to embrace CDMA operators

Andi Haswidi, The Jakarta Post, Barcelona

The global association of GSM mobile technology operators, GSMA, is moving further away from considering CDMA technology operators as rivals and plans to embrace them fully into the mobile community next year.

Speaking at the Leadership Summit, held within the Mobile World Congress in Barcelona on Monday, chairman Craig Ehrlich said there was a need for a shared view on technologies and convergence models within mobile companies because the industry had become more services-oriented.

"Everyone would agree that we have a shared future, so let's start understanding each other and working with each other and make this organization more representative of the wider ecosystem," he said.

Earlier, the GSMA stated its support of continued mobile broadband development in the Long Term Evolution (LTE) project under a 3G partnership among various associations, to further improve the Universal Mobile Technology System (UMTS) -- which uses the W-CDMA as a base for GSM's 3G technology.

Ehrlich said that CDMA operators committed to an LTE future would have full GSMA representation next year, including non GSMA board member companies, on its various committees.

"GSMA needs to embrace the entire constituency including CDMA operators. Our ecosystem is already wide and complex but we need to welcome more players and actively encourage more involvement and collaboration," he said.

Responding to the chairman's statement, Bakrie Telecom deputy president director Erik Meijer told The Jakarta Post that GSM technology could not advance further without adopting CDMA-based technologies.

Bakrie Telecom's Esia is the fastest growing CDMA operator in Indonesia in terms of new subscribers.

"GSM has been around for a long time. It has been eclipsed by other technologies such as EDGE, UMTS, W-CDMA, HSDPA and soon UMB and LTE. All of the new ones are based in CDMA."

"If GSMA wants a continued existence, they have no choice but to embrace us. It is useless to divide the world with technology. The two technologies will continue on same path toward deeper convergence," said Meijer, who previously was a vice president at Telkomsel, the country's largest GSM player.

"We do not see the need to join the GSMA. Nevertheless, the congress is a good place for you to find new ideas. There is a lot of information here and also (the opportunity to) meet a lot of people from the industry."

With about 230 chief executives involved as speakers, this year's congress, held Monday to Thursday, heralds four main themes: ubiquitous networks, changing business models that challenge traditional operator roles, the mobile phone's social and economic value, and the digital content revolution.

In total, there are about 16,000 exhibitors participating.

The first congress was held in Cannes, France, in 2006 and the second in Barcelona last year.

Smaller companies benefiting most from new interconnection costs

JAKARTA (JP): Smaller companies in the mobile phone industry such as Bakrie Telecom and PT Mobile-8 Telecom are likely to benefit the most from the new interconnection tariffs introduced by the government, analysts say.

"It will be the smaller ones most likely to benefit in the coming competition," said Felix Sindhunata, the head of equity research at Mega Capital Indonesia.

The government on Monday introduced a new formula for determining interconnection costs between operators, which will bring down tariffs from 20 to 20 percent.

Mobile operators have been told to revise their retail prices to reflect the changes in the interconnection costs and implement the new rates by April 1.

PT Bakrie Telecom trades under the Esia brand, a CDMA-based mobile phone service, while PT Mobile-8 Telecom provides CDMA-based Fren.

The number of Esia subscribers increased from 1.55 million in 2006 to 3.8 million in 2007. The company is targeting seven million subscribers by the end of this year.

Felix said shares in PT Telekomunikasi Indonesia (Telkom), the parent company of the biggest player in the mobile industry, PT Telkomunikasi Selular (Telkomsel), fell drastically after the Business Competition Supervisory Commission found the Singaporegovernment's investment arm, Temasek, and subsidiaries guilty of cross-ownership in Telkomsel and the second biggest market player, PT Indosat, which led to "unhealthy competition".

He predicted major players like Telkomsel and Indosat would experience sluggish growth due to the new competition.

Heru Sutadi from the Indonesian Telecommunications Regulatory Board predicted a much more "real" competitiveness following the changes to the interconnection tariffs.(lva)

RI`s cellular phone subscribers grow 51 pct

Jakarta (ANTARA News) - The number of cellular phone subscribers in Indonesia in 2007 rose 51 percent to 96.41 million from a year earlier, a minister said.

"The increase in the number of cellular phone and FWA (fixed wireless access) subscribers indicates that Indonesia has made remarkable achievement in catching up with other countries in the field of information and communication technology (ICT)," Communication and Information Minister Muhammad Nuh said at the launching of Indonesia ICT Outlook 2008 here Thursday.

The number of fixed wireless access and fixed phone subscribers increased to 11 million and 8.7 million respectively, he said.

The number of computer owners also rose to 2.5 million in 2007 from 1.8 million the year before, he said.

He said the number of registered Internet service users rose to 25 million in late last year from 20 million in 2006.

"It is for the first time the government officially launched the Indonesia ICT Outlook to know exactly the extent to which ICT has contributed to the country`s economic growth. The Indonesia ICT Outlook also serves as guidance for stakeholders to determine the direction of their business policies in the future," he said.

The ability to master ICT was a prerequisite to create an Indonesian community capable of boosting the economy and improving the people`s welfare, he said.

Hopefully, the Indonesia ICT Outlook would serve as an input for the global ICT rating agency to rank Indonesia, he said.

"For the umpteenth time Indonesia has been put in the lowest rank. Where did they obtain the data to do that?" he asked.

But more importantly, the Indonesia ICT Outlook 2008 was part of the government`s efforts to boost economic growth which would in the end improve the people`s welfare and reduce the number of jobless people, he said.

Telco regulators need to keep up with changes

Andi Haswidi, The Jakarta Post, Jakarta

With its high population but low telephone penetration rate, Indonesia remains among the most lucrative telecommunications markets in the world.

However, the lack of clear regulations has created confusion among operators and the public. The controversial anti-monopoly ruling recently issued by the Business Competition Supervisory Commission (KPPU) indicated that there are some things wrong in the business.

The KPPU found Singapore investment firm Temasek Holdings guilty of violating the anti-trust law by having ownership in two mobile phone operators, Telkomsel and Indosat, which jointly controlled more than 50 percent of the market.

The ruling also found the largest mobile phone operator, Telkomsel, guilty of abusing its dominant market position through a price-leadership arrangement involving Indosat that led to the excessive pricing of mobile communication services. The high prices cost consumers between Rp 14.7 trillion (about US$1.56 billion) and Rp 30.8 trillion between 2003 and 2006. The court told the company to lower tariffs by a minimum of 15 percent.

The ruling has yet to be tested in the courts, but appeals are on their way. The KPPU blamed the government in part, saying that the abuse of power would never have happened if the government had exercised its authority to safeguard competition.

The government's power in the telecommunications industry is two-sided. First, it is a market player through state-owned PT Telkom, which holds 65 percent of Telkomsel's shares, and through a golden share ownership in Indosat, which entitles it to veto power over all major decisions by the company. Second, it is a market regulator through the Communication and Information Ministry, the Directorate General for Post and Telecommunication and the Indonesian Telecommunication Regulatory Body (BRTI).

As a player, the government has been blamed for its inability to act in the interest of the public, generally by turning a blind eye to possible abuses of dominant power.

On the other hand, as a regulator, it has been known for adapting slowly to changes in the market, and often being trapped by its interest in the industry when implementing regulations.

Speaking as an analyst, Telkom's independent commissioner Arif Arryman recently raised his voice, urging the government to act faster so as to put the right policies and rules in place to prevent abuse of dominant market positions.

"The available policies and regulations have failed to keep pace with the development of services and equipment," Arif said.

For him, there is nothing wrong with companies such as Telkom having a dominant position as long as the government exercises tight control so as to avoid abuses. He said such control was currently lacking.

Also echoing Arif's concern, Indonesian Telecommunications Society (Mastel) chairman Mas Wigrantoro said that the government had made a mistake by failing to introduce a floor price for mobile phone services.

"A new player entering the industry usually seeks to grow its subscriber base by setting the lowest price possible, while ignoring the question of profitability. If minimum prices are not set, this could destabilize the industry," he said.

On the implementation front, the government has issued various warning letters to industry players this year, including to Telkom for the delay in opening its exclusive rights over long-distance calling to other players, especially Indosat, which has also entered into fixed telephone services.

Indosat received a warning for the late development of its fixed telephone network, but the government could not impose any sanctions due to a loose network development contract.

The government's weakness as a regulating body also shows in the fact that operators get away with misleading TV commercials, which, in some cases, offer cheap rates without making the terms and conditions clear.

The one piece of good news for the public this year was when the BRTI said last month that it would introduce a new set of rate formulas to cut the average cost of mobile telecommunication services by 20 to 30 percent as soon as Jan 1.

BRTI member Heru Sutadi explained that call rates here were the second highest in the Asia-Pacific region due to the variable interconnection cost for calls between operators. After considering the performance of the operators, he said, it was time to adjust rates.

Another noteworthy move by the government this year was the launch of a consortium for the ambitious Palapa Ring project in November that consists of seven companies: Telkom, Indosat, Excelcomindo Pratama, Bakrie Telecom, PT Powertek Utama Internusa, PT Infokom Elektrindo and PT Macca System Infocom.

The project, estimated to involve $300 million for the first of two implementation phases, aims to link the entire archipelago through a fiber optic network in order to bridge the digital divide in 40,000 villages that are yet connected to the country's telecommunication networks.

One setback in the effort to bridge the digital gap came when the Directorate General of Post and Telecommunication announced earlier this month that none of the tender participants for a Universal Service Obligation (USO) project surpassed the required criterion.

The USO projects, which mostly include the development of telephone networks in remote areas, are financed by funds raised from existing telecommunications operators' contributions.

The program was introduced at the World Summit on the Information Society (WSIS), held by the United Nations in 2003, which aimed to increase Information and Communication Technology (ICT) penetration by 50 percent globally by 2015.

The country's telecommunication sector has rapidly developed during the past several years with the entry of new operators in the highly competitive mobile phone market.

The government therefore needs to review existing policies keep up with the rapid changes in the industry.

Govt may limit licenses for cellular operators

The Jakarta Post, Jakarta

The government may limit the number of licenses issued to cellular operators wanting to enter the country's telecommunications market, citing fierce competition in the industry that has led to "panic and excessive marketing efforts".

Director general of post and telecommunications at the Information and Communications Ministry, Basuki Yusuf Iskandar, told reporters here Friday that he believed the country had "enough" cellular operators and that the government needed to issue some regulations to control the competition among them.

"We've seen exceedingly fierce competition (in the telecommunications industry). This has caused a kind of panic among operators, which has led to excessive marketing efforts, price wars and so on," said Basuki.

"If the cellular operators spend most of their money to beat competitors in such a way, what will be left for the customers then?"

He added that with the excessive marketing efforts, the telecommunications industry had surpassed the cigarette industry as the country's top advertising spender.

Basuki said the government planned to draft and issue some regulations to control competition in the telecommunication industry.

The government's main focuses will be predatory pricing practices, with some operators daring to offer services with "zero fees", he said.

Basuki expressed concerns about the practice, which he said could lead to the collapses of small-scale cellular operators.

"I see a tendency toward excessive price wars. If that continues to occur, only the big operators will survive and that can mean a monopoly in the end. Predatory pricing is a very dangerous practice and we need to make regulations on it immediately."

Another thing requiring regulation, said Basuki, was the trend toward premium SMS, for which higher than normal rates are charged.

He said the premium SMS offers could be misleading, and that the government was currently formulating a draft of a ministerial regulation on the service that was expected to be completed next year.

Regarding the advertising war in the telecommunications industry, Basuki said it was still within acceptable limits, but the government would continue monitoring developments.

He also said the interconnection cost between operators would drop significantly next year, but refused to mention any figure. The drop is expected to drive a decrease in retail prices.

The country's telecommunications industry now consists of 11 cellular operators.

Padjadjaran University found in a study carried out between April and July that all operators had reduced their charges between 2002 and 2007. But these reductions were modest, with XL cutting rates for calls to other networks by 20.59 percent, Indosat by 8.56 percent and Telkomsel by 2.52 percent during that period.

A spokesman for the Indonesian Telecommunications Regulatory Body, Heru Sutadi, said earlier last month that call rates in Indonesia were the second highest in the Asia Pacific region due to the variable interconnection costs for calls between operators.

As for text message charges, he said while the actual interconnection cost was only Rp 75 (0.8 U.S. cents) per message, some operators were charging as much as Rp 350. (wda)

Mobile-8 moves to net more customers

The Jakarta Post, Jakarta

Cellular company PT Mobile-8 Telecom, the operator of CDMA-based mobile phone service Fren, launched a wireless application system for mobile phone handsets Tuesday in another effort to meet the company's target to raise its subscriber base by 66 percent next year.

Director and chief of corporate affairs Merza Fachys said the system, called b-live, allowed subscribers to access applications such as ring tones, English dictionary, and games and information provided by a number of news portals, from Fren-ZTE C300 and Fren-ZTE C330 mobile telephone handsets.

Further development of the system in the future will allow subscribers to access such applications from other types of handsets, he said.

"With the introduction of the new system, we expect to net five million customers by the end of 2008," Merza said after the launching, adding that by the end of this year, the company expected to have around 3 million subscribers, up from 1.8 million last year.

Merza said that in addition to the new system, the company would also increase its customer base next year through the expansion of its CDMA service into fixed wireless access (FWA) networks.

"Early next year, we will launch FWA in six cities in Java and Kalimantan," he said.

At present, through 1,200 relay towers, Fren services are available in nine provinces: Jakarta, West Java, Central Java, East Java, Bali, South Sulawesi, South Kalimantan, North Sumatra and South Sumatra.

Merza said his company was also constructing 1,000 new relay masts in West Sumatra, Lampung, Jambi, East Kalimantan and Riau Islands.

During the first three quarters of this year, Mobile-8 booked a profit of Rp 55 billion, a 513 percent increase from the Rp 9 billion recorded in the same period last year. The company's gross revenue reached Rp 803.8 billion during the January-September period, indicating a 53.8 percent increase over the same period in 2006.(ndr)