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Indonesia: Government developing fibre network project Print E-mail
Thursday, 02 November 2006
The Indonesian government intends to develop of broadband fibre optic network, known as the Palapa Ring, worth US$ 1.52 billion, starting in October 2007.

The Minister of Communication and Information Sofyan A. Djalil said, "the government is optimistic the project will run well, and if it is necessary, the government will provide some incentives for the areas which are not economically feasible."

Djalil said the government prefers the project to be carried out by a consortium of local and international investors, with the capital coming from investors. In accordance with WTO regulations, foreign ownership will not exceed 35%.

The government will provide some incentive for Palapa Ring investors, especially if they develop the infrastructure in the non-feasible areas, by providing special frequencies or more attractive license conditions. The Director of Post and Telecommunication Yusuf Iskandar said the license and the frequency allocation would be adjusted with the operators who win the tender.

The Palapa Ring is a broadband fibre optic network consisting of seven rings covering Sumatra, Java, Kalimantan, Nusa Tenggara, Sulawesi, Maluku and Papua plus eight connecting networks. The Palapa Ring will consist of 30,000 km, connecting 33 provinces and 440 districts.

The project will be tendered in October 2007. The government is currently undertaking the project’s feasibility assessment. The construction of the network is expected to begin in 2008 and take three years to complete.

The government believes that the Palapa Ring will help the country overcome telecom access issues, especially in Eastern regions. It is also hoped that the network will lead to a reduction in the country’s high bandwidth prices. Once the network is complete, access will be offered to telecom operators, including internet service providers.

Source: Bisnis Indonesia - WDR/Intelecon Regulatory News