Regulator demands upfront fees

4 Apr 2006

Maxis Communications and Hutchison Telecommunications International (HTIL) have been ordered by the Information and Communications Ministry of Indonesia to each pay INR480 billion (USD50 million) in upfront fees before launching 3G services in the country. In a ruling published on its web site yesterday, the regulator stated that Natrindo Telepon Seluler – 51% owned by Maxis – and Hutchison Telecommunications Indonesia – owned by HTIL – must pay the fees for five of the 10MHz frequencies allocated to them, as well as an annual fee.

Some industry watchers have questioned whether it is too soon to roll out 3G services in Indonesia. Currently, only 20 per cent of the estimated 238 million people own mobile phones. "I think it’s too early for them to start 3G in Indonesia because the market there is still predominantly a voice market,” said Syed Razif Al-Idid, an analyst at UBS Securities. It has also been suggested that the Indonesian 3G fees are “too expensive” compared with the MYR50 million (USD13 million) that Maxis paid for a Malaysian 3G licence.

Indonesia, Hutchison 3 Indonesia (Tri)