Indonesia plans to re-issue 3G spectrum

May 22, 2005

Indonesia's two 3G spectrum winners could lose their licenses as the government plans to repeat the tender.

Chief Economics Minister Aburizal Bakrie described the process of awarding the two licenses in the first tender as "unfair".

The government granted 3G licences to two operators, Cyber Access Communication and Natrindo Telepon Seluler in 2003 and 2004 respectively. The first license was awarded through a 'beauty contest' while the second was awarded directly.

Communication and Information Minister Sofyan Djalil said, "…the government initially wanted to select only one operator through a beauty contest that was closed for existing operators, but a year later gave license to another operator. It is not consistent."

Serious concerns were raised after the two license winners sold the majority of their stakes to foreign investors before they could even launch the 3G services.

Djalil said the government plans to allow all existing GSM operators to bid in the second tender, including both Cyber Access Communication and Natrindo Telepon Seluler.

The re-tender will be launched after President Susilo Bambang Yudhoyono signs a new telecoms regulation.