Syahrial Ali’s Blog

Out of 73 interested companies, only 21 are qualified to follow the next step of BWA tender process. When the reserved price announced, only 23 companies returned the document and 2 0f them are incomplete. Tender process is entering the crucial moment when companies are requested to bid their price for each region they are interested in. As we know, there are 15 regions in all over Indonesia.

In each region, there are 2 blocks with maximum 2 winners. So, the maximum total winners are 30 companies. However, each company can bid for more than 1 region, hence the winner will be less than 30. Moreover, not all regions are attractive for investors.

It seems all participants have big opportunities to win in any region.  List below is the companies which will compete in auction process.

1. PT. Telkom.
2. PT. Power Telecom.
3. PT Jasnikom Gemanusa.
4. PT Indosat
5. PT Internet Madju Abad Milenindo.
6. PT Indosat Mega Media.
7. PT Sejahtera Globalindo.
8. PT Internux.
9. PT Centrin Online.
10. PT Global Komunika Dewata.
11. PT First Media.
12. PT Bakrie Telecom.
13. PT Jasnita Telekomindo.
14. PT MSH Niaga Telecom Indonesia.
15. PT Berca Hardayaperkasa.
16. PT Citra Sari Makmur.
17. PT Tigatra Komunikatama.
18. Konsorsium PT Batam, Bintan Telekomunikasi dan PT Cyberindo Aditama.
19. Konsorsium Moratelindo Teleglobal.
20. PT Rahajasa Media Internet atas nama Konsorsium Wimax Indonesia.
21. Konsorsium PT Comtronics Systems dan PT Adiwarta Perdania.

Good luck for all.

Big telecommunication companies, Telkom and Indosat pay dividend to the share holder. Both companies got a smaller profit for the financial year 2008 compared to 2007. Telkom just got IDR 10.6T, while Indosat had a figure of IDR1.88T. Both profit were below the 2007 figure that is IDR 12,86T(down 9.4%) and IDR 2.04T (down 7.8%) for Telkom and Indosat respectively.

As the profit drops, so is the dividend. Telkom just pay 55% of profit to share holder which is equivalent to IDR 296.95 per share, far less than 2007 dividend, which is IDR 357.8679. Indosat just pay 50% of profit or equivalent to  IDR 172.85per share just below 2007 figure which is 187.9.

Although global economic crisis, making porfit indicates a healthy company. So, Telkom and Indosat are still healty. Congratulate for all share holders.

After waiting so long, finally last week Finance Department agreed with the reserved price proposed by Communication and Information Department. The total reserved price for both blocks (30MHz, TDD) are IDR 52.35b. The price varies from the cheapest IDR 45m per block (Zone 10, Maluku and North Maluku) to the most expensive IDR 15.16b  (Zone 4, Jakarta, Bogor, Tangerang and Bekasi).

Compares to 3G reserved price, BWA reserved price is much cheaper. 3G reserved price was IDR 100b for 5MHz FDD (or 10MHz), or  IDR 10b/MHz.  BWA reserved price on the other hand was only IDR 52.35b for 30MHz (TDD), or IDR 1.745b/MHz or just 17.5% of 3G price.

Many parties were questioning about the high price for the Jakarta and the surrounding areas. They think that this price was too high, but they were very happy with other price.

There were 73 participants and this will probably reduce for some number  when they receive the reserved price figures.

Below are the complete list of reserved price for all region.

Bear in mind that each region has 2 blocks to be tendered.

So, the total reserved price value are IDR 26.17b x 2 = IDR 52.35b

According to Indosat (ISAT) Annual Share Holder Meeting that was performed today,  there are several changes in the board of directors and commissioners of PT Indosat Tbk. Harry Sasongko, ex General Money (GE) Money finance director has appointed as Indosat President Director replacing Johny Swandi Sjam.

In board of commissioners, there are 2 new names in board of directors namely Peter Kuncenwicz and Steve Hobbs. Meanwhile Fadzri Sentosa and Kaizad Bomi Heerjee remain in their position. All replacement will be effective starting on August 2009.

In board of commissioners, there is one new names, i.e.  Richard F Seney, while the government representative are  Rionald Silaban and Jarman.

Board of Commissioners 2008-2019 :

- H.E Shiekh Abdullah Mohammed Bin Saud Al Thani, as Chief Commissioner.
- Dr Nasser Marafih, Commissioner
- Rahmat Gobel, Commissioner
- Jarman, Commissioner
- Soeprapto, Independent Commissioner
- Setyanto P Santosa, Independent Commissioner
- Michael Latimer, Independent Commissioner
- George Thia Peng Heok, Independent Commissioner

Board of Directors 2009-2010 :

- Harry Sasongko, President Director
- Peter Kuncewwicz, Director
- Fadzri Sentosa, Director
- Kaizad Bomii Heerjee, Director

If we read the BWA tender document, it’s mentioned that one of the requirement is the local content portion. It should be 20% with 35% CAPEX. However, up until now, no local vendor is ready. Shall the tender will be postponed?

Last week, Hariff, one of the company which will manufacture the BWA equipment performed a trial in Serpong. The trial was not so successful. It can only serve 15 subscribers with the coverage of only 6 km. This is far from International standard which should serve at least 100 subscribers.

Due to this fact, many parties asked to postpone the tender. They argued that there will be some problem when thender continues. The winner will have to wait the local vendor readiness, meanwhile they have to spectrum levy.  So, shoould we wait the local vendor readiness? For how long?

However, the tender process is still on going right now. There is no sign to postpone it.

Indonesia Reaearch and Technology Minister, Mr. Kusmayanto Kadiman in one occasion said the BWA should not wait for the local readiness. As the tender is in progress, there are several ways out to do. When the winners will be assigned as they are, but the deployment will be delayed. Other soliution is to change the local content requirement.

Special respect shall be addressed to the regulator who have mention the local content requirement in tender document to give special treat to local industry. However, this good will was not responded well by local industry. What’s a pity.

I personally support for tender continuity. Just give the time limit for local vendor, when they are still not ready, the exception rule shall be applied. We don’t want to wait too long for new technology implementation. Look other neighbour countries, such as Malaysia and even East Timor, they have implemented WiMAX.

As schedule on 2nd clarification meeting on May 15th 2009, the BWA reserved price will be announced on May 22nd, 2009. The reserved price concerning 2 block of BWA spectrum namely in block 13 (2360-2375MHz) and  block 14 (2375-2390MHz). However up until now, May 23rd, no announcement has been made. Public relation has apologized this condition and informed that the delay is just because of technical reason only. However, this delay will have an impact to the whole schedule. The whole processes was previously scheduled to finish in the 3rd week of June, 2009.

The reserved price calculation is more complicated than the 3G reserved price on 2006 tender. The main reason is 3G is nationwide while BWA is regional license. In BWA lciense, there are 15 regions, so there will be 15 reserved prices. Hence, the reserved price shall be calculated for every region.

The BWA spectrum licenses were cheaper than 3G licenses in many countries. In May 2005, Singapore conducted 140 MHz of frequency spectrum auction in 25 slots and awarded 6 BWA licenses in 2.3 GHz and 2.5 GHz frequency bands. IDA as regulator collected far less money than the S$100 million for a 3G license (2001, 20MHz FDD) compare to e.g. MobileOne 4 lots (about 20MHz)  for S$2.1 million, Pacific Internet 5 lots (about 25MHz) for S$2.27 million.

Indonesia 3G reserved price was IDR 100b for 5 MHz (FDD) for nationwide license. The BWA license will be 15 MHz (TDD) and it will divided into 15 regions. How low can it be? Just wait.