Telco operators demand incentives

The country’s major telecommunications operators have called on the government to provide certain incentives for them to take part in the government’s five-year broadband plan. PT Telekomunikasi Indonesia (Telkom), PT XL Axiata and PT Indosat are willing to join the fray in the expansion of the country’s broadband capacity, but expecting support from the government. Telkom acting president director Indra Utoyo said on Monday that Telkom expected the government to provide a number of incentives for his firm in exchange for becoming the driver of the broadband plan. “At least, we need additional spectrum. We also need a certainty for return on investment if we invest to areas that are less commercial,” he told The Jakarta Post. Telkom would also propose tax and regulatory incentives to the government, he said.

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1. Telco operators demand incentives

The country’s major telecommunications operators have called on the government to provide certain incentives for them to take part in the government’s five-year broadband plan.

PT Telekomunikasi Indonesia (Telkom), PT XL Axiata and PT Indosat are willing to join the fray in the expansion of the country’s broadband capacity, but expecting support from the government.

Telkom acting president director Indra Utoyo said on Monday that Telkom expected the government to provide a number of incentives for his firm in exchange for becoming the driver of the broadband plan.

“At least, we need additional spectrum. We also need a certainty for return on investment if we invest to areas that are less commercial,” he told The Jakarta Post.

Telkom would also propose tax and regulatory incentives to the government, he said.

Last week, Communications and Information Minister Rudiantara said that the government would propose Telkom to become the main driver to lead the country’s broadband plan, dubbed Rencana Pitalebar Indonesia (RPI).

Director general of post and informatics resources at the ministry, Muhammad Budi Setiawan, said on Monday that the ministry had not decided what incentive it would offer to Telkom, but the ministry was currently reviewing the possibility of giving additional spectrum to the firm.

“We can make an affirmative action to allocate additional spectrum to Telkom if the firm will take lead on all parts of the broadband plan,” he said.

Under the broadband plan, the government targets to provide fix and mobile broadband access to most urban and rural populations in 2019.

XL, which is currently the second largest operator in terms of subscribers, is also willing to make the government’s broadband project reality.

“However, we hope that the government could provide us with an infrastructure sharing scheme so that we can take part,” said XL director for service management Ongki Kurniawan.

He said that XL had spent Rp 3 trillion (US$232.9 million) for its capital expenditures in the last three years, with most of the budget going to 3G infrastructure.

Indosat president director Alexander Rusli said, meanwhile, that Indosat wanted to participate in the government’s drive for broadband expansion if only the government helped the company increase its revenue or reduce its operational cost.

“Numbers don’t lie. If the return [on the investment] is good, we will participate,” he said.

Data service rate in Indonesia was among the cheapest in the world, lower than India. However, our cost is double than that of India, he said.

Alexander said that most operators in Indonesia currently had to struggle with high infrastructure cost amid cheap data service prices.

Indosat, which is mostly owned by Qatar-based Ooredoo, recorded a total net loss of Rp 1.32 trillion during the first nine months of this year. The firm currently struggled to slash its $650 million debt.

XL, meanwhile, recorded a total net loss of Rp 901.2 billion in January-September this year.

Source:

XL Axiata Axis capital Group Jakarta PT Telecom news

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