Indonesia announce new 3G tender

June 12, 2005

Indonesia plans to hold a second auction for 3G mobile phone licenses. The government will announce the new regulations for the bidding of the licenses in the near future.

"We will announce it soon. The important things are there will be legal certainties for investors, investment climate guaranteed and the mechanism will be competitive enough," Communications Minister Sofjan Djalil told Reuters.

However, he did not say whether the new auction would affect 3G licenses granted to PT Natrindo Telepon Seluler and PT Cyber Access Communications last year. It left the top three telecom companies in Indonesia, PT Telekomunikasi Indonesia, PT Indosat and PT Excelcomindo Pratama, without licences for 3G spectrum.

The bidding process last year was criticised because the licences were not granted in a transparent way. The government has also become frustrated at the lack of progress by the two companies in making use of the licenses.

Sofjan pledged that the proceeds from the licensing tender will be used to install standard telephone lines in remote villages that still have no access to telephones.

"We want to maximize the use of the 3G frequency bands so it can be used by more operators. Proceeds from these bands will be used for development in rural areas," he said.