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Government involvement needed in telecommunications business in Indonesia.

The rapid growth of telecommunications industry in the world including in Indonesia, has boosted demand for satellite service. The growing demand for satellite service in Indonesia has attracted foreign satellite providers to operate in Indonesian territory. Apart from those having official license to operate in Indonesia, many business players use foreign satellite not having operating license in the country.

Based data from the Association of Indonesian Satellite there are at least 30 foreign satellite transponders each on 36 Mhz operating freely in Indonesian space. Indonesia is estimated to suffer a potential loss of US$ 1.5 million a year in right of frequency fee, taxes and other levies. The fact has prompted the government to issue a regulation to eliminate illegal operation of satellites and users of the illegal service in Indonesia.

Satellite providers in Indonesia

Currently Indonesia has five operators with 7 satellites--Indosat, Telkom, Media Citra Indostar, Pasifik satellite Nusantara and AceS. The five companies operate satellites for various purposes. Telkom, Indosat and Pasifik Satellite Nusantara operate satellites to serve cellular communications, TV broadcasting stations, networks access service (NAP) etc.

Indostar of PT Media Citra Indostar serves only TV and radio broadcasting services and Garuda 1, which operated by Aces serves mainly satellite telephones with the capacity to cover one third of the globe.

Based on a survey by the Indonesian Satellite Association (ASSI) in 2009, around 120 transponders will be needed by the country to serve V-SAT companies, cellular operators, and fixed telephone, TV broadcasting stations, etc. The requirement is estimated to increase to 180 transponders in 2014. Therefore, 8 satellites with a capacity of 24 transponders will be needed in 2014.

Foreign satellites cover Indonesian requirement

Foreign satellite service providers take advantage of large Indonesia's satellite service requirement. Currently there are around 32 foreign satellites operating in Indonesian territory used by various private telecommunications companies, state companies, internet service providers, educational institutions, etc.

Regulation of Communications and Information Minister No. 37/P.M.Kominfo/12/2006

Negligence of the authorities related to satellite operations has caused potential losses to the state such as in taxes and operation fees and other levies with the rampant illegal operation of foreign satellites in the country.

The government through the communications and information minister issued a regulation No. 37/P.M.Kominfo/12/2006 on 6 December 2006, seeking to crack down on illegal operation of foreign satellites and use of satellite services in the country. The regulation is an amendment to one No. 13/P/M.Kominfo/8/2005 on operation of telecommunications using satellite service.

The regulation required companies providing telecommunications service to adjust to the regulation in 6 months after the regulation was issued.

In addition, the regulation ruled that satellite service providers are communications service providers having and or controlling registered at International Telecommunication Union. (ITU) on behalf of Indonesian telecommunications administration and have the filing right from the communications and information minister.

Larger requirement of satellite transponders in 2014 will certainly require more satellite slots. The country, therefore, need to seek to approach ITU as the world regulator of the use of satellite slots. Coordinate with other countries using slots becomes important to guarantee supply in the future.

In May 2007, Indonesia lost a slot of 150,5O EL after ITU revoked the Indonesian right to se the slot, which was last used by the country in 2003. Slot 150,5o EL was registered on behalf of Palapa C4 on 28 October 1993 and was used by Palapa C4 which was launched in February 1996. In 1999, Palapa C4, which was operated by PT Indosat experienced anomaly that virtually no more satellite using that slot until a deadline given by ITU.

Economic crisis that rocked the country contributed to the failure of the country to reuse the slot with a satellite replacement. The loss of the slot is a reflection of negligence of the authorities necessitating the government to issue a regulation on the operation of satellites. The government hopes to regain the slot.

Meanwhile, apart from questioning question about the loss of slot, the House of Representatives raised question about satellite reciprocal issue especially with Malaysia as Indonesia has no satellite that could serve multimedia house to house as Malaysia's Measat already does.

Palapa Satellite has long served telecommunications in Malaysia, but because of the monopoly held by Telkom, Malaysian satellite could not enter Indonesia.

Now after the monopoly has been eliminated, foreign satellites such as Astro are free to enter Indonesia. Meanwhile, Astro with its Measat satellite holds the monopoly in Malaysia that makes it impossible for Indonesian satellite to enter that country to serve "direct to home (DTH)" broadcasting.

38 telecommunications providers receive license to use satellite

After the 6-month deadline was over for telecommunication service providers to make adjustment to the regulation of the communications and information minister, 38 companies using satellites have received the license to use satellite in Indonesia.

The licenses were given after the companies submitted the necessary documents such as certificates on landing right to the Post and Telecommunication Directorate General

There are 34 companies among others, TV stations (RCTI, Global TV, TPI, Trans TV), ISPs, and other telecommunication companies, which already used satellite services both domestic and foreign satellite services are given time to secure license. Some of them have submitted proposals for license at the end of the deadline.

License to use foreign satellite service creates competitive leasing tariff of transponders

The license to use foreign satellite service, apart from contributing an extra income in taxes, landing right fee and frequency fee, etc. will gives indirect benefit in creating better competitiveness in transponder leasing tariff.

Based on data at ASSI, the leasing tariff of transponders in Indonesia is not competitive as foreign satellites generally put up a tariff of US$ 1 million a year as against US$ 1.7 million by Telkom. The difference in tariffs, according to Telkom, is because of the fact that foreign satellites are not burdened with various levies such as value added tax of 10%, fee for operating right (BHP) telecommunications service of 1% of total income and radio frequency spectrum right, etc.

ASSI hopes that with the granting of license to 10 countries operating satellites in Indonesia, the government of Indonesia may demand reciprocal right against the satellite countries of origin.

Countries that have been given the landing right for their satellites in Indonesia include the United States, China, Tonga, Japan, Thailand, The Netherlands, Germany, Singapore, Hong Kong and Malaysia.
Table-1

Operators providing satellite service in Indonesia

 Name of
Companies satellite Capacity Orbit Slot

PT Telkom Telkom1 24 transponders 108[degrees] EL
 Telkom 2 24 transponders 118[degrees] EL
PT Indosat Palapa C2 36 transponders 113[degrees] EL
 Palapa C4 32 transponders 150,5[degrees] EL
PT Media Citra Indostar 12 transponders 107[degrees] EL
 Indostar
PT Pasifik Palapa 24 transponder 146[degrees] EL
 Satellite Nstr. Pasifik
PT AceS Garuda 1 123[degrees] EL

Source: Dekominfo

Table-2

Estimated requirement of satellite transponders until 2014

Year 2004 2009 2014

Transponders needed 80 120 180

Source: (ASSI)

Table-3

Foreign satellites used in Indonesia

 Names of
 Orbit satellite
No. Satellite slots (ITU Filling) Countries

1 Apstar-2R/Telstar-10 76,5 E Apstar -4 China
2 Apstar-V, Telstar-18 138 E Tongasat Tonga
 AP-3/c/KU-3
3 Apstar-VI (Hong Kong) 134 E Tongasat Tonga
 AP-2,
 -C/KU2
4 Asiasat-2 100,5 E Asiasat-EKX/ Hong Kong
 Asiasat-E
5 Chinastar-1 87,5 E DFH-3-OC RRC
6 Intelsat-902 62 E USA
7 Intelsat IS-906 64 E USA
8 JCSAT-3 128 E JCSAT 3A Japan
9 JCSAT-4A 124 E Japan
10 Measat-1 91,5 E Measat 1 Malaysia
11 Newskies 177 E Intelsat USA
 (NSS-5-England) T7-177E
12 NSS-6 95 E Intelsat-95 E The Netherlands
13 NSS-703 57 E Intelsat 67E The Netherlands
14 Panamsat-10 68,5 E USA
15 Panamsat-2 169 E PAS-2 USA
16 Panamsat-4 72 E USA
17 Panamsat-8 166 E USASAT-14H USA
18 PAS-12 45 E Europe-* Germany
 Star-1
19 SES Americom AMC-23 172 E USASAT-14K/60 USA
20 ST-1 88 E ST-1 Singapore
21 Intelsat-702 55E USA
22 Intelsat-709 85E USA
23 Intelsat-904 60E USA
24 JCSAT-4 127E Japan
25 Asiasat-3S 105,5 E Asiasat 1/CK Hong Kong
26 Asiasat-4 122 E Asiasat-AKX/ Hong Kong
 Asiasat-A
27 Measat-2 148 E Measat-2 Malaysia
28 Sinosat-1 110,5 E Chinasat 6 RRC
29 IPSTAR-1 119,5 E Thaicom-IP1 Thailand
30 JCSAT-2A 154 E JCSAT-2 Japan
31 JCSAT 1B 150E Japan
32 Thaicom 1A 120E Thailand

Source: Dekominfo

Table-4

Users of satellite service in Indonesia licensed to use satellites

No. Companies Name of Satellites

 1. PT Pasifik Tel Indotama Asiasat-4, Telkom 1
 2. PT Nap Info Lintas Nusa Intelsat 8
 3. PT Broadband Multi Media Apstar-2R, Panamsat-8,
 Panamsat-10, Asiasat-3S,
 Intelsat-10, Telstar-10
 4. PT Asia Pasifik Kapital Apstar-V
 5. PT Indosat M2 Intelsat-2, Intelsat-8, -10,
 Asiasat-2, -3, Telstar-10
 6. PT Khasanah Teknologi Persada Sinosat-1
 7. PT Datacom Wijaya Pratama
 8. PT Anta Mediakom Sinosat-1
 9. PT Centerin Online Chinastar-1
10. PT Patrakom Apstar-V, Apstar-VI
11. PT Dwi Tunggal Putra Pas-4, Apstar-VI, Sinosat-1,
 Pas-2, AMC-23, NSS5
12. PT Pasifik Satellite Nusantara Apstar-V, Apstar-VI, Agila-2
13. PT Broadband Network Asia ABS-1, AMC-23
14. PT Artha Mas Cipta Asiasat-4
15. PT Quasar Jaringan Mandiri
16. PT Cyberindo Aditama Intelsat-906
17. PT Matari Lintas Cakrawala Apstar-2R, JCSat-3, Asiasat-2,
 (D/H PT Media Citra Indostar) -3S, Measat-3, Palapa-C2,
 Panamsat-8, -10, Telkom-1,
 Telkom2
18. PT Citra Sari Makmur Sinosat-1, Apstar-VI,
 Measat-3, Measat-2, NSS-6
19. PT Supra Primatama Nusantara AMC-23
20. PT AJN Solusindo Apstar-V, Apstar-6, Apstar-2
21. PT Global Inti Corporatama Asiasat-2, 4, Panamsat-2, 4,
 Apstar-V, AMC-23
22. Broadband Multi Media Measat-2, Measat3
23. PT Primacom ST-1, Apstar V
24. PT Telkom Measat-2, Measat-3
25. PT Exelcomindo Pratama JCSAT 3
26. PT Multi Data rencana prima Apstar 2R
27. PT Iforte solusiiInfotek Apstar 2R
28. PT Indosat Palapa -C2, Intelsat-7
29. PT Global Telecom Utama Sinosat-1, Asiasat-4, PAS-12
30. PT Sarana Mukti Adijaya Asiasat-4
31. PT Transhybrid Communication Asiasat-4I
32. PT Sarana Insan Muda Selaras Apstar-IV, NSS-703
33. PT Multimedia Nusantara Apstar-VI
34. PT Caprock Communications Ind. Telkom-2, Jcsat-2A, Apstar-V,
 Apstar-2R
35. PT Mentari Multimedia Panamsat-2, 8,10, Measat-1,
 Asiasat-3S
36. PT Rabrik Bangun Nusantara Apstar-3
37. Institut Teknologi Bandung JCSAT-3
38. PT Indonusa Telemadia

Source: Office of communications and information minister
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Title Annotation:INDUSTRY
Publication:Indonesian Commercial Newsletter
Date:Jun 1, 2007
Words:1707
Previous Article:Internet Service Provider (ISP) industry.
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