DGPT warns Indosat over slow pace of fixed network rollout

8 Oct 2007

Indonesia’s telecoms regulator, the Directorate General of Posts and Telecommunications (DGPT), has warned PT Indosat over its apparent ‘sluggishness’ in rolling out its fixed line and fixed wireless (CDMA) networks. According to reports in The Jakarta Post, the director general met with Indosat officials last week to discuss his concerns and warn the company about the ‘lack of development in its fixed networks’. The verbal warning is seen as a precursor to possible sanctions should Indosat fail to get its house in order. Nevertheless, the verbal reprimand is a clear warning that the DGPT will not stand idly by if the company fails to – in its opinion – make good on its initial development commitments.

A spokesman for the director general told the paper: ‘We basically want Indosat to live up to its commitment and fast-track the development of its fixed line and CDMA networks. According to our calculations, the development ratio is one to ten, with one being for the fixed networks [and ten for GSM networks],’ he said. At 30 June this year Indosat had signed up more than 20 million cellular users, via subsidiaries which include IM3, Mentari, Matrix and StarOne (CDMA), up 44% year-on-year, but in the same period, the total number of people taking its StarOne fixed wireless access services, which covers 24 cities, only amounted to only 450,000. Moreover, Indosat’s fixed line network has also failed to deliver as the company focuses its efforts more on wholesale corporate connections than on delivering retail lines.

In response, Indosat president director Johnny Swandi Sjam acknowledged the regulator’s concerns, particularly where StarOne is concerned, but said the problem lay with difficulties in transferring its services from the 1900MHz band to 800MHz, as demanded by the government. ‘The migration was costly. That was our main obstacle. But we have managed to do that and we expect to re-launch the StarOne service in early November,’ he said.