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May 25, 2007 1:11 am

Indonesia to build telecoms network

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Seven Indonesian telecommunications companies are set to build a countrywide $1.5bn fibre-optic network that will provide a boost for the country’s overloaded telecoms infrastructure and improve connection with the nation’s remote regions.

The companies will sign on Friday a memorandum of understanding for the Palapa Ring project, which will involve laying 57,000km of cables across all 440 districts and is expected to take two years to complete.

The project is intended to provide Indonesia with “high-quality, safe and cheap” telecoms infrastructure, according to a statement from the government.

Less than 10 per cent of Indonesia’s 225m population are regular internet users and only about 3 per cent of those are on broadband. Telemedicine, education, agriculture, SMEs and e-government are sectors that are expected to particularly benefit.

“This network should support the equal development and expand the economic potential of the regions and also boost the competitive climate in the telecoms sector,” the government said.

Telkom, the country’s largest telecoms company, will take a 45 per cent stake in the project consortium. Bakrie Telecom, Excelcomindo Pratama, Indosat, Powertek Utama Internusa and Macca System Infocom will each have 10 per cent and Infokom Elektrindo 5 per cent.

“The whole intention is to lower costs and increase benefits to the end-consumer,” said David Burke, Telkom executive vice-president. “This is a way to integrate communication links across the country.”

The Palapa Ring would also provide Indonesia’s smaller telecoms operators with a gateway into the country’s numerous remote regions and increase integration between all operators.

The first phase of the project, which was first proposed two years ago, will cover eastern Indonesia.

“We’ve been eyeing the potential market in eastern Indonesia for some time,” said Excelcomindo. “This network will help us gain entry into Indonesia’s remote regions.”

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