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Development of optic fiber network in Indonesia.

A number of telecommunication operators and multimedia service providers in the country have used fiber optic network like PT. Telekomunikasi Indonesia (Telkom), PT Indosat, PT Excelcomindo, and Indonesia Comnet Plus (Icon+), PT. Supra Primatama Nusantara (Biznet) and PT. Powertel.

The networks already cover a number of the country's main islands such as Java, Sumatra, Bali, Kalimantan, and Sulawesi.

Telkom, a state company and the country's largest telecommunication company, has the longest fiber optic network in Indonesia reaching 13,600 km, followed by Excelcomindo's 9,950 km and that of Icon + 6,000 km.

Another fiber optic network operated by Telkom is an international network of Thailand-Indonesia-Singapore (TIS) coming into operation in December 2003.

The TIS network is 1,200 km long linking Songkhla (Thailand), Batam (Indonesia), and Changi (Singapore) to be connected with high capacity submarine cables of other countries.

This network is operated in cooperation between Telkom, Singapore Telecommunications Ltd (SingTel) and Communications Authority of Thailand (CAT). The three operators has invested US$30 million each

PT Telkom continues to expand net networks

Telecommunications players have continued to expand their fiber optic networks to increase their capacity. Telkom plans to start construction of a submarine fiber optic network in 2009 to link Java--Bali--Lombok, several places in Kalimantan, and Sulawesi--Kalimantan.

The fiber optic network of Sulawesi-Kalimantan will reach 3,139 kilometers consisting of network of 2,734 KM in Sulawesi and 405 KM in Kalimantan.

Ring-1 will cover Makassar, Parepare, Watampone, Bulukumba and Makassar (South Sulawesi). Ring-2 to cover Parepare, Palopo (South Sulawesi) Parigi, Palu (Central Sulawesi), Majene, Mamuju (West Sulawesi), Pinrang, and Parepare (South Sulawesi) and Ring-3 to cover Parigi (Central Sulawesi), Gorontalo, and Manado (North Sulawesi).

This project is named 'JaKa2LaDeMa' and will need an investment of US$110 million. It is to be completed in mid 2010. The network will be used as a backbone to promote data and voice traffic, e-commerce, and video.

The contractor to build the project is Fujitsu from Japan. In this project, Fujitsu will cooperate with a German partner Norddeutsche Seekabelwerke GmbH (NSW).

NSW will provide repeater which will be integrated with repeated cables, while Fujitsu as the main director, will provide terminal, repeaters, branching units system integration, and all services needed by the project.

In mid 2008, Indosat also began to build submarine cable communication system (SKKL) to reach 1,300 kilometers linking Java--Kalimantan--Batam--Singapore.

The project, which will have 4 landing points in each island such as: Tanjung Pakis (Karawang, West Java), Sungai Kakap (Pontianak, West Kalimantan), Tanjung Bemban (Batam) and Changi (Singapore), is named Jakabare.

Construction of the Jakabare SKKL which will have a bandwidth capacity of 160 to 640 Gigabit per second (Gbps) is expected to be completed in the first half of 2009. This network will also be used to promote the network capacity of service of the Indonesia--Singapore route. The project will be built by Indosat in cooperation with NEC Corporation.

Powertel, a new player, plans to continue to expand its fiber optic network to reach 3,400 km, including 2,400 km to link cities in Java connected with railways and 1,000 km to link electric poles.

Powertel also plans to build 2,000 km long fiber optic network between cities connected with railways in Sumatra.

Powertel was established in 2004 to operate in closed fixed line service using the technology of Broadband over Powerline (BPL).

The players are mainly telecommunication companies which concentrate in development of network of backbone fiber optic between cities or islands to support voice and data traffic of their telecommunication business.

However, there are some developing "last mile" network in the form of Metronet such as Indosat through its subsidiaries Indosat Mega Media (IM2), and Icon+.

Player like Biznet concentrates in development of fiber optic network for last mile in large cities.

The strategy used by Biznet is developing Metronet to be connected with business buildings. Currently Biznet has established connections with 263 buildings including 248 buildings in Jakarta, 5 in Surabaya, 1 in Bogor, 3 in Bandung, 4 in Tangerang with its fiber optic.


Contractors of fiber optic projects in Indonesia

NEC from Japan is a vendor for fiber optic network often used by telecommunication operators in Indonesia. A number of projects like RMJ SKSO Fiber Optic cable of Package III in Kalimantan of Telkom, Dumai--Melaka Cable System (DMCS) of Telkom and Telekom Malaysia, and SKKL of Indosat using NEC as the vendor.

Meanwhile, Fujitsu won other projects of Telkom such as 2,999 km long Jasuka (Jaea--Sumatra--Kalimantan).

Development of Palapa Ring Project

The Palapa Ring project is a fiber optic network project in eastern Indonesia initiated by the government and to be carried out by a number of major telecommunications companies PT. Telkom, PT. Indosat, PT. Excelcomindo Pratama and PT. Bakrie Telecom.

This project was earlier estimated to cost only US$180.4 million. The networks total 4,450 km in length including 3,850 km under the sea and 600 km on land. It will have 15 landing points to go across 21 regencies/cities in eastern Indonesia.

This project was to be completed this year, but its implementation has been delayed. The stumbling blocks include the soaring cost from earlier estimate of US$180 million to US$700 million as a result of the surges in the prices of optic cables and equipment.

The joint venture investment of US$180 million was to be provided by PT Telkom US$90 million, PT Indosat Tbk US$30 million, PT Excelcomindo Pratama Tbk US$30 million and PT Bakrie Telecom Tbk US$30 million.

The investment value was reduced with the falling value of the rupiah that has weakened to the level of 11,000 per US$. With the rupiah was weakened to that level the joint venture investment fell by US$30 million. The cost was estimated when the rupiah was at 9,000 per US$.

The government as the facilitator has decided to use the Universal Service Obligation (USO) fund as a soft loan for the consortium to cover the shortage in fund.

The USO fund is raised from a contribution of 1.25% of the gross income of service and telecommunication network operators. Last year USU fund totaled Rp1.6 trillion.

The funding is made through a special team called ICT (information communication technology) The team is made up of officials of the office of the state minister for communications and informatics, the National Development Planning Board, and the finance ministry and the office of the coordinating minister for economy. However, until now it is not yet clear how the funding mechanism will work.

Meanwhile, vendors that took part in the tender as the contractors of the Palapa Ring project include NEC Corporation, NSW-Fujitsu and Alcatel-Lucent. The winner of the tender is yet to be announced as the prices offered by the bidders are much higher or twice as much as earlier estimate.

Meanwhile the vendors already utilized their full capacity at present as there are many fiber optic network projects in the world. Therefore, its is almost impossible for them to complete the project this year as originally scheduled.

The delay in the implementation of the project results in delay in the order for equipment needed by the project.


Conclusion and prospects

With the fast growing telecommunications industry in Indonesia and abroad, fiber optic network is expected to remain high in demand in the country and in the world in general.

Fiber optic networks are vital for telecommunications companies. Telecommunications companies which focus on voice and data services will tend to develop backbone network inter city, inter-island with nation wide coverage.

Ones which focuses on closed fixed service tend to develop last mile network in large cities. This network generally provide connections commercial buildings and later expected to also cover houses with the growing demand for data communication service.

The global crisis is expected to affect plans of telecommunications companies in Indonesia in building fiber optic networks but when the condition improves they are expected to immediately resume their projects.
Fiber optic network providers, length of network and coverage, 2008

 Length of
Players (km) Coverage

Telkom 13,600 Java-Sumatra, Java-

PT Excelcomindo 9,950 Sumatra--Java--Sulawesi

Icon + 6,000 Java--Bali

Indosat 4,000 Java, Sumatra, Kalimantan,

Supra Primatama 250 Jakarta, Karawang,
Nusantara (Biznet) Tangerang, Bogor,
 Bandung, Surabaya,

Powertel 141 Jakarta--Cikampek--
 Bandung, Tanah Abang--
 Ged. Cyber--Serpong

Source: Data Consult

Vendors of fiber optic networks in several network projects
in Indonesia

 Length Network
 Operator Projects (km) vendor

Telkom Installation of NEC
 Fiber Optic RMJ
 SKSO cable of
 Package III

 JaKa2LaDeMa' 3,139 Fujitsu

 Jasuka (Java-- 2,999

Telkom-- Dumai--Melaka 150 NEC
Telekom Cable System
(Malaysia) (DMCS)

Telkom High Performance 2,000 Siemens
 Back Bone (HPBB) -Pirelly

Indosat Sea cable 1,300 NEC
 system (SKKL)
 Jakabare (Java,
 Batam, Singapore)

Icon + Procurement of
 conductor and
 fiber optic project

Excelcomindo 550 Alcatel

 Vendors of Value
 fiber (US $
 Operator optic million) Year

Telkom PT. Jembo 2008

 110 2009


Telkom-- -- 9,3 2005

Telkom 65

Indosat -- 2008-2009

Icon + PT. Voksel 2007

Excelcomindo 31 2008-2009

Source: Data Consult
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Publication:Indonesian Commercial Newsletter
Geographic Code:9INDO
Date:Mar 1, 2009
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