Companies honoured (see below), says Frost & Sullivan, are forerunners in the ICT space in Indonesia whose best practices in operations are recognised as exemplary.

Vendor category
Telecom Equipment Vendor of the Year – PT Nokia Siemens Networks

Service Provider category
Broadband Service Provider of the Year – PT Indosat, Tbk
Mobile Service Provider of the Year – PT Excelcomindo Pratama, Tbk
Mobile Data Service Provider of the Year – PT Telekomunikasi Selular, Tbk

Best of the best category
Market Challenger of the Year -  PT Excelcomindo Pratama, Tbk
Service Provider of the Year – PT Telekomunikasi Indonesia, Tbk

See here for more details.

President SB Yudhoyono’s government came to power on the promise of eradicating corruption and the “deal culture” that has plagued Indonesia throughout much of its existence. Initially the government promised leased-cost subsidy auction and other open transparent methods for rolling out backbone infrastructure in the country. Now a sudden announcement in the media informs us that licenses for the Palapa Ring project have been granted.

The Palapa Ring has been a “dream” project of the Indonesian government even before the financial crisis of 1997. Before the crisis it was planning on funding it with government funds. Post the financial crisis and faced with empty coffers, the Government has been pressuring telecom operators in Indonesia to use their resources to realize the Government’s dream. The enthusiasm of PT Telkom to participate in the Palapa Ring Project (in news story below) is ironic considering that it had decades to build backbone infrastructure in the country when it was the monopoly provider of domestic fixed line services and it built little. I wouldn’t be surprised if the threat of regulatory retribution hung like Damocles’s sword over Indonesian operators when they decided to participate in the Palapa Ring consortium.

Least-cost subsidy auction would have been a more transparent way of eliciting participation of Indonesian operators in the Palapa Ring Project. In those islands/regions that are commercially viable, backbones would be deployed by private  sector without any government support. In islands/regions that are sparsely populated and where landing submarine cable may not be commercially viable,least cost subsidy auction would have provided the necessary subsidy to make it worthwhile for private sector to participate in infrastructure roll-out.

Although the sum of $1.5 billion is being bandied around as the total cost of the project the consortium has yet to commit to the backbone map that DGPOSTEL and the Indonesian government has been promoting. The map as can be seen below has submarine cables landing every few kilometers as they garland the various islands. The highest cost-component of a submarine cable system are the cable landing stations.The proposed design is not cost-efficient. It would make more sense to land a submarine cable at couple of points in an island and use terrestrial fiber optic or microwave to connect the rest of the island.

Indonesian group will build US$1.5 billion Palapa network

JAKARTA, May 10 (Reuters) – Seven Indonesian companies will join forces to build a $1.5-billion 34,000 km (21,100 mile) fibre optic cable network in the country aimed at improving telecommunication infrastructure, a government official said.

Indonesia’s director general for post and telecommunication at the communication and information ministry, Basuki Yusuf Iskandar, said the group will meet next Wednesday to discuss how to implement and finance the Palapa Ring Project.

“Seven companies have obtained the licence for the Palapa Ring,” Iskandar told reporters late on Wednesday. He said PT Telekomuniasi Indonesia Tbk, PT Indosat Tbk, PT Excelcomindo Pratama Tbk, and PT Bakrie Telecom Tbk were among the seven in the consortium.

The Palapa Ring is part of the government’s effort to refurbish the country’s ailing infrastructure to spur economic growth in the world’s fourth most populous nation. Its completion will open up telecommunication access to eastern
part of Indonesia, the less developed area of the sprawling tropical nation.

Telkom’s president director, Rinaldi Firmansyah, said the company will become the majority contributor to the project and lead the group as it would use most of the telecommunication traffic through the network.

“We are still calculating the numbers, but all this time we are accounted for about 50 percent of the country’s
telecommunication traffic, so we are likely to invest about 50 percent of the project (cost),” Firmansyah told reporters.

“Financially we are ready,” he said, adding that the company’s involvement was aimed at strengthening its network in the eastern part of Indonesia.

Separately, Excelcom’s president director, Hasnul Suhaimi, said the company’s contribution to the project would be around 10 percent of the total value of the investment. He said the fibre optic network could help lower the telecommunication costs from the current system that incorporates satellites.

On March 16, the Director General of DGPOSTEL conceded that requiring new international operator to build 10 new gateways was a heavy burden on the new entrant especially when the two existing operators in total had six.

The tender for the telephone fixed line is postponed till June
March 16, 2007(Translated from Bisnis Indonesia, March 16, 2007)
Jakarta:[...] The director general of the Post and the Telecommunications, Basuki Yusuf Iskandar added that the government will lessen the requirements for the IDD tender by reducing the number of international gateways that must be built. “Before, one of the conditions followed the IDD tender was to have the commitment to be able to provide 10 units IDD Gateways. But afterwards the government reconsidered this obligation and it was reduced to five ,” he said.

According to the Director General of post and telecommunications, the decline in the obligation is because the provision of 10 IDD Gateways will be too heavy a burden for the operator since the existing operators currently only have approximately six units.

LIRNEasia‘s input to the White Paper issued by the Indonesian government on introducing a new license for local, long distance and international telecom is available here.

The tender for the telephone fixed line is postponed till June
March 16, 2007(Translated from Bisnis Indonesia, March 16, 2007)
Jakarta:The Government will postpone the tender schedule for fixed line telephone to June which was earlier expected to be issued this month. The postponment is due to legal delays and readiness of operators to participate in the tender.

The director general of the Post and the Telecommunications, Basuki Yusuf Iskandar, said the government hoped the tender will go well and successfully. The legal instrument will take the form of a Ministerial
Decree. There is a “big possibility” that the “tender would be carried out this coming June although in principle the government will try to do that as soon as possible,” he stated to the reporter, yesterday.

The Tender for the provision of fixed local, long distance and international was originally scheduled for March 2007. At this time the government is carrying out the finalisation of the new licensing of the three services. Depkominfo (DGPOSTEL) is currently drafting the Ministerial Decree regarding the opening of new opportunity
to provide the Local, IDD & DLD services.

Basuki added that the government will lessen the requirements for the IDD tender by reducing the number of international gateways that must be built. “Before, one of the conditions followed the IDD tender was to have the commitment to be able to provide 10 units IDD Gateways. But afterwards the government reconsidered this obligation and it was reduced to five ,” he said.

According to the Director General of post and telecommunications, the decline in the obligation is because the provision of 10 IDD Gateways will be too heavy a burden for the operator since the existing operators currently only have approximately six units.

For international connectivity, Telkom and Indosat are the incumbent operators. Telkom has Internet hubs in Malaysia, Batam, and Hong Kong, while Indosat had optic fibre links between Jakarta-Japan, Jakarta-Australia,
Jakarta-the Middle East, and Europe.

Although the International Gateway market is not yet opened officially, there are several companies that have expressed interest in the tender. The interested companies are PT Excelcomindo Pratama Tbk and Telematika
Indonesia. The chairman of the Association of the Cellular Telecommunications Indonesian, Johnny Swandi Sjam considered the government should NOT open the new opportunity for providing Fixed telephony services (IDD, DLD & Local) since currently the service are still under “duopoly” status (ie. PT Telkom and Indosat).