Government halves 3G frequency allocations for Hutch, Natrindo

28 Feb 2006

The Indonesian government has halved the 3G spectrum allocated to Natrindo Telepon Selular (Natrindo) and Hutchison CP Telecommunications (formerly Cyber Access Communication) from 10MHz to 5MHz. The state says the move is designed to create a level playing field and reduce the financial burden on the operators. While Hutch and Natrindo were issued licences directly in 2003 and 2004, earlier this month three new licensees – Telekomsel, Indosat and Excelcomind – won their concessions in an open tender. The new awards were for one 5MHz block of frequency each. The government says that if Natrindo and Hutch are willing to pay for the additional block they can, but added that the cost of so doing would be huge. The Ministry’s decision to cut the spectrum was made after Natrindo and Hutch objected to paying the upfront fee and commission for using the frequencies that had been levied on Telkomsel, Indosat and Excelcomindo. The three had 30 days to pay the upfront fee, which was set at double their final bids, and must pay commission of usage rights, calculated on a figure of IDR160 billion (USD17.2 million) – the lowest winning bid in the auction.