Comments on: Non-transparent licensing for Palapa Ring project? http://lirneasia.net/2007/05/non-transparent-licensing-for-palapa-ring-project/ a regional ICT policy and regulation think tank active across the Asia Pacific Thu, 09 Sep 2010 06:09:37 +0000 hourly 1 By: Divakar Goswami http://lirneasia.net/2007/05/non-transparent-licensing-for-palapa-ring-project/comment-page-1/#comment-3827 Divakar Goswami Thu, 17 May 2007 05:39:42 +0000 http://www.lirneasia.net/2007/05/non-transparent-licensing-for-palapa-ring-project/#comment-3827 According to a Bisnis Indonesia article, Gatot S. Dewa Broto, spokesman for the telecom ministry, said that the consortium of 7 companies will have to compete with Aqela Group and MCN Tech from Malaysia in a tender that they will hold in October. The process that is being followed is so opaque that it is not clear on what basis the consortium that has already being given a license to build the Palapa Ring will compete in a tender with two "outsiders". Is such a tender exercise credible to anyone? What are the chances that the consortium will not win the tender? I would venture to say "nil." Earlier the former Minister had stated that foreign participation in the Palapa Ring would be restricted to 35%, if that condition is enforced how can a Malaysian firm participate without partnering with an Indonesian entity? I can't see how the Indonesian Government can extricate itself out of this mess. One thing that they can do to minimize the credibility damage is to have an access regime in place before the Palapa Ring project is handed to the consortium. An access regime may ensure that if the Palapa Ring gets built other telecom operators who are not part of the consortium have access to the backbone infrastructure. This is the only way to ensure that the access networks gets built in the East of the country with the widest possible participation. The seven companies part of the consortium that will build Palapa ring: PT Telkom Tbk, PT Indosat Tbk, PT Excelcomindo Pratama Tbk, PT Infokom Elektrindo, PT Bakrie Telecom Tbk, PT Powertek Utama Internusa (representasi dari Linbrooke Worldwide Ltd, Inggris), and PT Nusantara Ekaprana Teknogunakelola. Telkom will hold 50%, Excelcomindo 10%, Bakrie 10%. According to a Bisnis Indonesia article, Gatot S. Dewa Broto, spokesman for the telecom ministry, said that the consortium of 7 companies will have to compete with Aqela Group and MCN Tech from Malaysia in a tender that they will hold in October.

The process that is being followed is so opaque that it is not clear on what basis the consortium that has already being given a license to build the Palapa Ring will compete in a tender with two “outsiders”. Is such a tender exercise credible to anyone? What are the chances that the consortium will not win the tender? I would venture to say “nil.” Earlier the former Minister had stated that foreign participation in the Palapa Ring would be restricted to 35%, if that condition is enforced how can a Malaysian firm participate without partnering with an Indonesian entity?

I can’t see how the Indonesian Government can extricate itself out of this mess. One thing that they can do to minimize the credibility damage is to have an access regime in place before the Palapa Ring project is handed to the consortium. An access regime may ensure that if the Palapa Ring gets built other telecom operators who are not part of the consortium have access to the backbone infrastructure. This is the only way to ensure that the access networks gets built in the East of the country with the widest possible participation.

The seven companies part of the consortium that will build Palapa ring: PT
Telkom Tbk, PT Indosat Tbk, PT Excelcomindo Pratama Tbk, PT Infokom Elektrindo,
PT Bakrie Telecom Tbk, PT Powertek Utama Internusa (representasi dari Linbrooke
Worldwide Ltd, Inggris), and PT Nusantara Ekaprana Teknogunakelola. Telkom will
hold 50%, Excelcomindo 10%, Bakrie 10%.

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