FIRST BROADBAND FREQUENCY "OPEN" AUCTION IN INDONESIA

UNCLAS JAKARTA 000745

SIPDIS

DEPARTMENT FOR EEB/CIP/BS Timothy C Finton
COMMERCE PASS TO NTIA, ITA, ITA/OTEC Andrew Bennett
FCC PASS TO Robert Tanner

E.O. 12958: N/A
TAGS: ECPS ECON ID
SUBJECT: FIRST BROADBAND FREQUENCY "OPEN" AUCTION IN INDONESIA

REF: State 27310


1. Indonesian telecommunication officials announced the start of an
auction process for 2.3GHz radio frequency for broadband wireless
access. Only companies or their subsidiaries that are majority
Indonesian-owned are able to compete per the 2007 Investment Law and
accompanying Negative List. Additionally, only businesses with
Indonesian network or service licenses will be able to compete.


2. The Department of Communications and Information (DEPKOMINFO)
laid out the following process for interested bidders:
-- Apr 29-May 5 Pick-up bidding document;
-- May 6 Submit written questions;
-- May 11-20 Submit pre-qualification documents;
-- May 29 Announce prequalification results;
-- June 1-5 Prequalification appeal period;
-- June 3-9 Pre-auction clarifying meeting;
-- June 10-12 Implement three round auction;
-- June 12 Announce auction results;
-- June 15-16 Auction appeal period;
-- June 17 Confirmation of auction results.


3. Indonesian officials plan to hold future auctions for the 3.3 and
3.5 GHz frequencies. No date is set for these future auctions.
Earlier this year, DEPKOMINFO issued a Ministerial decree
instructing operators using those frequencies to migrate to other
frequencies.


4. Because of the Indonesian Negative List on Foreign Investment,
U.S. firms will not be able to participate in the auction unless
they partner with local companies to create a subsidiary that is
majority Indonesian-owned. Interestingly, DEPKOMINFO officials said
Indosat may not be able to compete because they are majority owned
by a Qatar firm. The official added that a majority
Indonesian-owned subsidiary of Indosat could still participate in
the auction.

HUME