T

he government will begin selecting telecommunications companies that will build base transceiver stations (BTS) connecting villages located along the country'€™s borders later this year.

The selection and construction processes will start at the end of this year or early next year at the latest, said Communications and Information Minister Rudiantara during an Idul Fitri open house event in South Jakarta recently.

'€œWe will choose operators that offer the smallest subsidies,'€ he told The Jakarta Post.

He continued to say that his office had signed memorandums of understanding (MoU) with the administrations of East, North and West Kalimantan, whose villages have been chosen for pilot projects of the ministry'€™s telecom facilities project.

The ministry plans to build Rp 3 trillion (US$224.13 million) worth of telecom facilities in 50 border regencies and cities under the Borderland Integrated Development Program (Gerbangdutas) of the National Agency for Border Management (BNPP). The ministry aims to complete the project by 2018 and connect all cities and regencies in Indonesia through fiber optic cable.

Rudiantara said that he was aware of the location of the villages, which are in remote areas and not feasible for operators'€™ business and commercial activities.

'€œFor example, Tiong Ohang village in East Kalimantan, which is 22 hours from Balikpapan via car and boat. The residents of the village, who mostly work as swallow nest farmers, have smartphones but no cellular coverage available in the area,'€ Rudiantara said.

To attract telecom companies to invest in border areas, the government will provide subsidies taken from the universal service obligation (USO) fund, he said.

The USO fund, which is collected from telecom companies that contribute 1.25 percent of their revenues annually, will be used to broaden citizens'€™ access to information and communication technologies. However, several government programs funded by the USO, such as the Subdistrict Internet Service Provider (PLIK) and the Subdistrict Internet Services Vehicles (MPLIK), have been reported by the Supreme Audit Agency (BPK) as missing the target, leading the ministry to find a more ideal scheme to disburse the funds.

'€œThis [the BTS constructions subsidy scheme] is actually a better way for us to disburse the USO, which collects around Rp 2 trillion annually,'€ he said, adding that he could not yet estimate the amount of investment needed to build the BTS, as this would depend on the operators'€™ fair competition.

XL Axiata CEO Dian Siswarini told the Post on Tuesday that her company was ready to join the selection process.

'€œWe are ready and hoping for fair subsidies for the involved parties,'€ she said via text message.

However, she did not suggest an estimated amount of investment for the construction, saying that availability of infrastructure, such as electricity, transportation and human resources in the area, would affect the amount.

'€œIf they are not available, the investment amount could increase two to 2.5 times,'€ she said.

Separately, Tri vice president Danny Buldansyah said that his company had conveyed its interest in developing BTS in Kalimantan to the ministry and currently was waiting for the ministry'€™s response. (prm)