By: Hazim Ahmadi
The price of additional spectrum for 3G operators in Indonesia will be offered at IDR 160 billion or about USD 16 million for 5 MHz. Telkomsel, the biggest GSM operator, which is 3G operator as well, has dealed with that price and they are waiting for invoice from Ministry of Communication and Information (Depkominfo).
Meanwhile the other operators offered the spectrum much lower below USD 10 mill. Indosat beat the price down at USD 3 million and PT Excelcomindo Pratama (EP) operator aggree the price at USD 4 mill. Two other operators Natrindo (NTS), Axis operator and PT Hutchison CP Telecom Indonesia, Tri operator, didn’t take the bid.
The Ministry of Communication and Information put the price of additional spectrum based on the lowest bid in first 3G frequencies tender in 2006. In that time Telkomsel paid for IDR 218 billion, EP paid for IDR 188 billion and Indosat only paid IDR 160 billion. So that’s why the price of additional 3G frequency is put at IDR 160 billion.
In most 3G operator opinions Depkominfo offering price is very expensive for only 5 MHz spectrum or one carrier. However they urgently need the spectrum to compete with the newcomer BWA operators. As you might know there is no 3G operator got any BWA licenses in all Indonesia regions. The 3G frequency is only way to provide high data services. Actually they need the frequency not just 5 MHz, but more because in other countries the operators commonly get about 20 MHz.
In a market with high penetration by the end of December, 2008, Telkomsel is the market leader with over 45 per cent market share, while Indosat and XL around 24 per cent and 21 per cent respectively. Axis and 3 lag behind with just over nine per cent of the market.