MCIT calls for consolidation among BWA operators to allow them to compete in the data era

27 Jul 2015

Indonesia’s Minister of Communication and Information Technology, Rudiantara, has suggested that companies holding regional licences for broadband wireless access (BWA) services in the 2.3GHz band consolidate in order to better compete in the modern data era. IndoTelko quotes the minister as saying: ‘I suggest BWA players who have regional licence consider consolidation. It will make them stronger’. According to him, market consolidation among BWA providers will improve economies of scale and allow them to negotiate better terms when considering matters such as interconnection.

The government plans to auction an additional 30MHz of frequencies in the 2.3GHz band in 2016 and with previous auctions typically favouring incumbents, Rudiantara says that it is in the interest of companies looking to compete at a national level to discuss consolidation. There are currently nine firms holding frequencies in the 2.3GHz band for BWA, but only three – PT Internux, First Media and Berca Hardayaperkasa (WiGO) – have launched commercially, with the first two named working together on the successful Bolt! service.

According to TeleGeography’s GlobalComms Database, in April 2009 the Ministry of Communication and Information Technology (MCIT) auctioned off 2.3GHz spectrum in 15 regional zones, with each zone gaining two BWA licensees. Reserve prices ranged between IDR45 million and IDR15.1 billion (USD4,300 up to USD1.12 million) for each licence. The franchise regions included 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. Of the 15 zones, those in Greater Jakarta and Banten were offered at the highest prices, while the lowest fees were for Papua and Maluku. No fewer than 73 telcos expressed an interest in the 2009 auction.