ISPs prepared to invest USD300m in WiMAX, paper says

22 May 2009

A group of around 30 small- to medium-sized internet service providers (ISPs) will reportedly invest upwards of USD300 million in the country if they are successful in their bid to secure a WiMAX broadband licence in the forthcoming auction in July. The Jakarta Post quotes a spokesman for the consortium, Heru Nugroho, as saying that the bid is part of a concerted effort by local ISPs to gain access to the provision of broadband service – a sector which is traditionally dominated by giant telecoms providers. ‘This is our way to ensure market accessibility for local ISPs,’ Heru said, adding that consortium leader PT Rahajasa Media Internet, or RadNet as it is also known, has begun the formal process of applying to enter the auction being held by the Information and Communication Ministry. If successful, RadNet and its partners in the venture will create a new consortium to manage their WiMAX operations in Indonesia, called PT Konsorsium Wimax Indonesia (KWI). Heru confirmed that KWI would invest USD300 million in the service for five years, of which around USD100 million will be used for network operations. ‘All of the thirty companies would manage KWI together. Each would have an equal share in the company,’ Heru said, adding the consortium was open to new ISPs looking to join before 6 June.

According to TeleGeography’s GlobalComms database, the Ministry of Communication and Information Technology (MoCI) plans to announce the winners of the tender for WiMAX broadband operating licences in July. MoCI minister Muhammad Nuh says the agency is currently in the process of establishing its fee policy for each of the 15 franchise zones initially made available for WiMAX licences. The MoCI is holding talks with the Finance Ministry and will levy its fees dependent on the purchasing power of people living within the zones. WiMAX operating licences will be awarded to two operators per zone and bidders will be able to bid for concessions in more than one operating area. The regulator reports strong interest in the tender with no fewer than 73 telecoms companies already confirmed as participating in the auction. It is understood auction participants were required to propose a minimum of 35% use of local products to supporting the new system. The initial zones set up for WiMAX include three zones in Sumatra, four zones in Java, two zones in Kalimantan, and one zone each for Bali, Nusa Tenggara, Papua, Maluku, Sulawesi, and Riau Island.