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SMEs eye US$300m for Wimax
A consortium of thirty small and middle internet service providers (ISPs) plan to invest US$300m if they win a bid for a Wimax broadband operating license in July
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A consortium of thirty small and middle internet service providers (ISPs) plan to invest US$300m if they win a bid for a Wimax broadband operating license in July.
A spokesman for the consortium, Heru Nugroho, said Wednesday the bidding was part of efforts by local ISPs to gain access into the service, which was likely to be dominated by giant telcoms providers.
"This is our way to ensure market accessibility for local ISPs," said Heru.
He said the consortium leader PT Rahajasa Media Internet, known also as RadNet, was in the process of joining the bidding being held by the Information and Communication Ministry. Should it manage to secure a license, RadNet and partnering companies would name the consortium PT Konsorsium Wimax Indonesia (KWI).
Heru said KWI would invest $300 million in the service for five years.
"The consortium still awaits the tender announcement before determining any plan on how to acquire the fund," he said.
Under the bidding process, there are 15 zones where Wimax services will initially be made available. The Wimax service fee will vary in each zone and there will be a cross-subsidy principle, so that zones with high Wimax's fees will subsidize those with lower fees.
Operating licenses for each zone will be given to two operators and it will be possible for a company to become an operator in more than one zone at the same time.
Around 73 telecommunications companies are participating in the tender. Tender participants were required to propose a minimum of 35 percent use of local products to support the new system.
Heru said that the thirty ISPs *in the consortium* already had branches in the fifteen zones due for Wimax services, and that they would cooperate to share their facilities to manage the service.
"All of the thirty companies would manage KWI together. Each would have an equal share in the company," Heru said, adding the consortium was still opening up chances for more ISPs to join until June 6.
Each ISP should be a member of the Indonesian Internet Service Provider Association (APJII), with an operating license, said Heru.
Customer fees for the Wimax service provided by the consortium would be between Rp 100,000 ($10) and Rp 500,000 a month.
"KWI's profit margin will be about 15 to 20 percent of the user fee," Heru said.
Wimax is an acronym for Worldwide Interoperability for Microwave Access, which is an advanced technology that provides high-throughput broadband connections over long distances without having to build costly infrastructure and large numbers of transmission towers. The technology, which provides an alternative to cable and digital subscriber lines (DSL), has a coverage of around 50 kilometers in radius from each base station and relatively low investment costs compared to existing 3G technology. (mrs)
