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Indonesia finally kicks off auction for more 3G space

After being postponed four times, the auction process for the last two blocks of the 2.1 gigahertz frequency finally began last Friday, which will help telcos relieve network strain.
Written by Ellyne Phneah, Contributor

Indonesia's Communication and Information Ministry has kicked off the 3G auction process last Friday, which will enable operators to expand their 3G services and accomodate the sharp growth in data traffic.

According to The Jakarta Post in a report Thursday, the ministry announced on its Web site they will begin the process of auctioning the last two blocks, or sections of the 2.1 gigahertz (GHz) frequency. The current frequency has 12 blocks, of which, 10 are already in use by the five main mobile operators.

A ministry spokesperson, Gatot Dewabroto, also told the Indonesian news site the actual auctioning and winner selection would be in March 2013. The spokesperson noted a single operator, instead of two could end up winning both blocks.

Indonesian telcos show interest to participate
So far, Alex Sinaga, president and director of Indonesian telco Telekomunikasi Selular (Telkomsel), has confirmed it plans to participate in the auction process. Telkomsel owns more than 50 percent of Indonesia's telco market share, has approximiately 123 million subscribers and currently operates two of the 10 blocks currently available on the 2.1 GHz frequency band, according to the Jakarta Post.

Another Indonesian telco, Indosat also expressed interest in participating. However, the operator needs to first look into the costs related to the acquisition of the auctioned blocks first, noted Adrian Prasato, a spokesperson for Indosat.

The operator is interested in acquiring the additional blocks to accomodate the future increase in 3G subscribers, Adrian added. Like Telkomsel, Indosat currently operates two blocks on the frequency spectrum.

Turina Farouk, a spokesperson for telco XL Axiata, also said it was "serious" about acquiring the extra 3G channels.

The tender for more 3G spectrum had repeatedly been postponed despite telcos facing an increasingly strained network. In September, the auction was postponed for a fourth time, as Telkomsel was disqualified from bidding after it was controversially declared bankrupt--a ruling which was overturned last month.

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