Updated News September 2, 2010
- Government to review financing bill
- Sugar imports to start next year
- Malaysia, One of Five Biggest Investors in Indonesia
- The Odd Coal Import Plan
- Low Gas Exports Contributes to July Trade Deficit
- Cilamaya potential to substitute for Priok
- Seven Airports Offered Up for Private Investment
- Airport expansion is only a matter of time: Stakeholders
- Garuda mandates Rothschild as IPO adviser
- Fitch downgrades Berlian Tanker rating to B-
- Five Road Packages Delayed
- Alcatel wins Telkom's network convergence project
- Internet Users in Indonesia to Triple by 2015: Report
Government Relations & Economic Development
Government to review financing bill
M. Tahir Saleh. Bisnis.com, Jakarta – 02/09/2010
The government is preparing an academic review of the Financing Bill by involving the businesses and legal experts to finalize the draft.
The seriousness is apparent after this week the Financing and Guarantee Bureau at the Capital Market and Financial Institution Supervisory Agency (Bapepam-LK), together with other stakeholders in the financing industry, is reviewing the basic formulation of the Bill.
Head of the Financing and Guarantee Bureau M. Ihsanuddin said the bureau, together with legal experts and the businesses, was reviewing the juridical, philosophical, and sociological reasons for the legal package.
He informed a rapid growth in the financing industry necessitated a law that could protect the industry.
"The assets of multifinance companies have reached IDR200 trillion, necessitating the Law. We are reviewing the Bill with the Businesses and legal experts," he said yesterday.
BI recorded the asset value of multifinance companies in the first semester of 2010 hit its record high of IDR201.57 trillion, rising 24.5% from IDR161.81 trillion in the first semester of 2009. The increase was attributable to an increase in outstanding loan to IDR163.20 trillion from IDR131.90 trillion in the first semester of 2009.
Ihsanuddin added the Financing Bill had been included in the House's 2014 National Legislation program. Therefore, he added, the government, in this case the Minister of Finance, would create an inter-departmental committee in early 2011 to maximize the deliberation.
In June, Chairperson of the Bapepam-LK Ahmad Fuad Rahmany approved the creation of the Financing Bill Joint Review Team to make further deliberation.
"We will create an inter-departmental committee earlier next year since the Bill has been included in the House's 2014 National Legislation Program (Prolegnas). The law is also important to guide how to execute collaterals."
He exposed multifinance companies often were in conflict with consumers, which referred to Law 8/1999 on Consumer Protection and Law 42/1999 on Fiduciary Guarantee. On the other hand, multifinance companies only referred to Minister of Finance Regulation 84/2006 on Multifinance Companies and Presidential Regulation (Perrpes) 9/2009 on Financing Institutions.
Insurance fund
Separately, Chairperson of the Indonesian Multifinance Companies Association (APPI) Wiwie Kurnia said the industry had strong aspiration as multifinance companies currently controlled more than IDR200 trillion's worth of assets.
However, the association would be realistic with the House's current performance as other Bills, such as the Financial Services Authority Bill had not been complete. "We are optimistic, but the road is still long."
He told the association had given several inputs, such as allow multifinance companies to gather third-party funds from consumers, insurers, and pension funds.
Ihsanuddin said if the insurance industry was allowed to deposit their funds in multifinance companies, it would be able to bolster both parties' growths.
"It will be highly profitable if insurance companies are allowed to deposit their funds in multifinance companies. However, it is still a discourse. Moreover, it will seem difficult for multifinance companies to gather third-party funds," he asserted.
Sugar imports to start next year
Antara News, Jakarta – 02/09/2010
Chief Economic Minister Hatta Rajasa and Trade Minister Mari E Pangestu said that current sugar stocks are still sufficient, and sugar will be imported in the January-April, 2011 period.
"Although the sugar stocks will drop by the end of the year, we still have enough surplus of 600,000 tons," the Minister in Jakarta Wednesday.
He said that in the January-May period, Indonesia would not be producing sugar by operating its sugar cane mills.
"We should raise the stocks, and if you need 12 kg per capita, for which we must have extra stocks four our 237 million people," He said.
Meanwhile, Trade Minister Marie Pangestu said that currently the government were calculating the precise amount of sugar to be imported.
"This will be processed as soon as possible so that we have time to prepare the imports," She said.
She mentioned that it took two months to prepare the imports as in January to April, sugar imports will be started."We will finalize it in the next two weeks," she said.
Meanwhile, regarding to other main commodities for the upcoming Lebaran, Hatta Rajasa assured that all them are available."Rice stocks, meat and sugar, are secured until the end of the year."
"The commodities will be monitored and maintained, including maintaining low market prices," he said.
He said that from August to September there are two harvested million hectares of rice, which will increase wheat stock to two million tons.
"State Logistics Agency will continue raising the stocks and maintain cheap markets," Hatta said.
Malaysia, One of Five Biggest Investors in Indonesia
Kompas.com, Jakarta – 02/09/2010
From 2005 to 2009 Malaysia was one of the five biggest investors in Indonesia with a total investment of US$1.2 billion.
"From the manpower point of view, Indonesia has 2 million workers and 13,000 students in Malaysia," Coordinating Minister for Economic Affairs Hatta Rajasa said at his office here on Thursday.
Therefore, he explained that there was no plan so far to review economic cooperation between Indonesia and Malaysia.
"We have no plan to review our two countries’ economic cooperation whatsoever," the minister said, adding that the cooperation between the two countries of one family continued to make significant progress.
Meanwhile, Indonesia’s investment value in Malaysia from 2005 - 2009 reached about US$500 million. At present there are around 6,000 Malaysian students in Indonesia. Asked for comment on President Susilo Bambang Yudhoyono’s official address at the Indonesian Defense Forces (TNI) headquarters in Cilangkap on Wednesday night, Hatta said the speech reflected Indonesia as a big nation.
"The important point in this matter is that we have no compromise to the issue of sovereignty, we want to overcome the border problem with Malaysia as soon as possible, and we want to develop healthy diplomacy between the two countries," Hatta said.
In his official address on Wednesday night, President Yudhoyono reaffirmed his attitude toward Malaysia in regard to the heightening of tension over the recent arrest by Malaysian police of three Indonesian maritime patrol officers in the Indonesian waters.
Yudhoyono said that even though the relations between Indonesia and Malaysia were very important, yet it did not mean that the government ignored national interest, let alone if it concerned sovereignty.
"Such an incident should not happen again and it should be prevented by way of dialogs and increased coordination between the two nations while we continue to maintain the good relationship," the head of state said.
He said that Indonesia was willing to accelerate negotiations between the two countries over their border issues.
Energy and Mining
The Odd Coal Import Plan
The Jakarta Post, Jakarta – 02/09/2010
The revelation made last week by Dahlan Iskan, president of state-owned electricity company PT PLN, of a plan to import around nine million tons of coal next year when Indonesia is the world’s top seaborne exporter of thermal coal with annual shipments of almost 190 million tons, implies several things, all of which are negative for the country’s energy policy.
Even though Coordinating Economic Minister Hatta Rajasa immediately shot down the PLN idea as ridiculous, Dahlan’s statement made after a meeting with the House of Representatives last Thursday could either indicate the government’s impotence to enforce the domestic market obligation (DMO) imposed on coal miners since early this year or his frustration in dealing with corruption ingrained in the company’s procurement system.
PLN importing thermal coal would indeed be a very odd corporate decision that would unnecessarily increase electricity rates given the high cost of transporting the resource and the larger stocks that have to be managed to minimize supply interruption (inventory costs).
Local coal is certainly much cheaper because of the lower haulage costs. The faster delivery time would also enable PLN to cut down on storage and inventory costs by arranging just-in-time delivery for its power stations. Such efficient supply-chain management would be rather difficult for imports that require much longer delivery times, not to mention the risk of PLN being exposed to foreign exchange fluctuations.
We don’t think the PLN CEO’s remarks on the import plan had anything to do with the government’s inability to enforce the DMO upon coal miners. The government ruling on the DMO stipulates that producers that fail to realize their obligations to the domestic market are liable to a 50 percent cut to their output for the following year.
As Boy Garibaldi Thohir, president of publicly-listed PT Adaro Energy, PLN’s single largest coal supplier, asserted last Friday; “commercially, as long as the prices are right and PLN does not demand long credit payment terms we prefer selling our coal to domestic users as this will cut delivery time and freight costs, improving our cash flows.
Blaming the low quality (calorific value) of domestic coal for the need for imported coal simply does not make sense because the government and PLN have known for years that virtually all coal mined in Indonesia is of sub-bituminous quality standard. Hence, the boilers of the PLN power stations should have been designed to use sub-bituminous coal.
Hence, we are inclined to think the main reason behind Dahlan’s outburst about the coal import plan was his miserable failure to remove the deeply entrenched cartel-like system within PLN’s procurement system, which he inherited from the previous management.
The Energy and Mineral Resources Ministry and state-owned companies should thoroughly audit the PLN procurement system, from the planning of its annual needs, right down to technical specifications imposed on its tendering processes.
Shifting more of PLN’s primary energy production to coal is quite crucial, in view of the resource’s abundant supply. More importantly, the cost of generating electricity from coal is very low, about Rp 450 (5 US cents) per kilowatt hour (kWh), as opposed to Rp 800 per kWh for natural gas and Rp 1,800 per kWh for diesel oil.
In addition, PLN itself has planned to convert its diesel-fired power plants with a combined capacity of 7,750 megawatts (MW) into coal-fired plants, and most of the additional 10,000 MW new capacity being built under the crash power is also based on coal. All in all, PLN will eventually generate more than 50
percent of its output with coal, thereby catapulting the need for thermal coal to more than 150 million tons a year.
Certainly, there is a need to achieve the right balance between maximizing export revenue from coal and securing supplies for domestic users. The challenge, however, is how to make producers accept domestic prices as fair compared to what they would make exporting their product.
Low Gas Exports Contributes to July Trade Deficit
Kompas.com, Jakarta – 02/09/2010
Finance Minister Agus Martowardojo said on Thursday the oil and gas sector’s lackluster export performance was to blame for the country’s trade deficit in July, the first since early this year.
"So, there must be efforts to increase exports particularly oil and gas exports," he said after a coordination meeting at the Coordinating Ministry for Economic Affairs here.
Indonesia had so far relied on gas exports to increase foreign exchange earnings from the oil and gas sector. However, the country had been an oil importer since the past few years, he said.
The Central Statistics Agency (BPS) said on Wednesday Indonesia suffered a trade deficit of US$128.7 million in July when exports reached US$12.49 billion and imports US$12.62 billion. Imports rose to US$12.62 billion in July due in part to a significant rise in the import of consumer goods, the agency said.
Overall, Indonesia’s balance of trade in the first seven months of 2010 recorded a surplus of US$9.46 billion, it said. Asked if July’s trade deficit was to change all macro economic assumptions in the draft 2011 state budget, the finance minister said none of the assumptions was directly related to the balance of trade.
"Right now there are still discussions on the assumptions. But actually, none of the assumptions is directly related to the balance of trade," he said.
Transportation
Cilamaya potential to substitute for Priok
Tularji. Bisnis.com, Jakarta – 02/09/2010
The government is finalizing the plant to build Cilamaya port in Karawang, West Java as a main candidate to substitute for Tanjung Priok port.
The potential location is identified following the completion of the review conducted by the Japan International Cooperation Agency (JICA).
Cilamaya port was initially prepared by state port operator (Pelindo) II to substitute for Tanjung Priok port due to its strategic location that was near to production centers.
Deputy Minister of Transportation Bambang Susantono stated Cilamaya port Karawang was the main candidate out of several locations reviewed by the JICA over the past several months.
He explained there were many reasons for the government to make Cilamaya the main candidate, one of which being its nearness to industry centers.
However, he continued, the ministry would still conduct an intensive review before deciding the build a new port in Cilamaya. "We will make intensive review."
Bambang asserted the new port would not substitute for Tanjung Priok port as PT Pelindo II once announced.
"Although there will be a new port in Cilamaya, Tanjung Priok port will keep operating."
The Japan International Cooperation Agency (JICA) is conducting a review to determine a new location for a new port designed to substitute for Tanjung Priok port in the next five years.
Five locations Director of Port and Dredging at the Ministry of Transportation Suwandi Saputro said there were five locations reviewed, namely Cilamaya [Karawang], Bekasi, Marunda, East Ancol, and Tangerang.
Previously, PT Pelindo II stated it would develop a new hub port mega-project in Karawang, West Java, with a capacity of 10 million TEUs of containers per annum to substitute for Tanjung Priok port in the next five years.
For a start, Pelindo II will prepare IDR6 trillion fund to build and operate the port, which will be realized gradually within the next 5-10 years.
President Director of PT Pelindo II Richard J. Lino said the plan automatically canceled the plan to develop Bojonegara port in Serang, Banten to substitute for Tanjung Priok.
According to Lino, Karawang was chosen due to its near location to tens of industrial zones in Cikarang, Karawang, Purwakarta, and Subang in the province of West Java, which represented around 70% of goods supplies to Tanjung Priok port.
Bambang explained the port development in Cilamaya, Kerawang was part of government strategy to deal with surging exported and imported goods as well as with the congestion threat.
However, he said, in the short-term the congestion threat at Tanjung Priok port would be dealt with by rearranging the port.
"Congestion at Priok port can still be overcome by rearranging container traffic."
He explained the government for the next several years would keep developing Tanjung Priok port in accordance with the master plan.
The traffic management at Tanjung Priok port can be made more efficient by relocating empty containers stockpiling at the port to outside the port, leading to more effective entry-gate service and better national single window (NSW) service.
According to him, the development of Tanjung Priok port until 2020 in accord with the master plan would still be able to deal with an increase in the flow of goods.
Seven Airports Offered Up for Private Investment
Nani Afrida. The Jakarta Post, Jakarta – 02/09/2010
The director general of air transportation at the Transportation Ministry, Herry Bakti S Gumay, said Wednesday the government had offered up seven airports across Indonesia to be managed by foreign investors.
“The airports are in South Banten, Bali, East Kalimantan, West Kalimantan and West Java. All require the construction of new terminals,” Herry told reporters.
He said it was also possible that Jakarta’s Soekarno-Hatta International Airport and Ngurah Rai International Airport in Bali would be offered up as both were in need of massive improvement.
According to Herry, an Indian investor had shown interest in investing in Indonesian airports and had met with the government to submit proposals.
It is believed the involvement of foreign investors is due to a limited state budget and provisions outlined in the aviation law.
“There is no regulation barring foreign investors from majority holdings in airports,” Herry said.
“The airports will stay in Indonesia and bring many benefits to Indonesians. We’ll just share the revenue with foreign investors.”
Previously, State-Owned Enterprises Minister Mustafa Abubakar said the government was looking for local and foreign investors to develop the airports, which have been operating for 25 years.
Herry said the public private partnership (PPP) mechanism would be used to partner state airport operators with foreign investors. “Foreign investors will invest their money in the airports, not invest their money through airport operators.”
Based on Indonesia National Carrier Association (INACA) data, currently Indonesia has 210 airports.
State airport operators PT Angkasa Pura I and PT Angkasa Pura II oversee 13 and 12 airports respectively.
The Transportation Ministry has eight airport projects under the PPP mechanism this year, all of which are expected to be done by 2014.
The projects include New Samarinda in East Kalimantan, South Banten, Kertajati in Cirebon, West Java and two cargo terminals at Sentani and Tarakan airports.
Ignatius Bambang Tjahjono, the airport director at the Transportation Ministry, said PPP mechanisms were being used because building airports required huge investments.
“Kertajati requires Rp 5 trillion and South Banten needs Rp 1 trillion. That’s why we need to encourage investment,” he said.
The Transportation Ministry aims to operate all those airports not only in the wake of the growth of the national airline industry, but also to accommodate ASEAN’s Open Sky policy in 2014.
The government is also increasing the capacities of major airports such as Juanda in Surabaya, Ngurah Rai in Denpasar, Polonia in Medan and Sultan Hasanuddin in Makassar.
The Indonesian airline industry has seen significant growth in the past five years.
INACA records show that national airlines carried 43.8 million passengers in 2009, an increase of 17 percent compared to 2008 figures of 37.4 million passengers.
Airport expansion is only a matter of time: Stakeholders
The Jakarta Post, Jakarta – 02/09/2010
This story is the first part of a series of articles on airports in Indonesia discussing their problems and opportunities.
With Soekarno-Hatta International Airport already serving almost double its capacity of airline passengers, the need for a physical expansion of the country’s busiest international airport is imminent, Indonesian Transportation Society (MTI) says.
The number of passengers traveling in and out of the airport is expected to reach 40 million this year, up from 37.3 million in 2009, and is expected to grow to 45 million next year.
Soekarno-Hatta was only designed to handle up to 22 million passengers a year.
“[We project] that the airport will serve more than 60 million passengers in 2015 and more than 75 million in 2020,” MTI member Suharto Masjid told The Jakarta Post recently.
The only choice for the government and airport operator was to expand the capacity of the airport by building new terminals, Suharto said.
The MTI, which was established in 1995, is a non-governmental organization comprising experts, academicians and bureaucrats committed to supporting the sustainable development of Indonesia’s transportation systems.
Soekarno-Hatta airport currently has three passenger terminals. Terminal I serves domestic flights, Terminal II serves international flights and Terminal III is for low-cost carriers.
In terms of flight traffic, the airport is currently serving 900 departures and arrivals a day, which is already the peak of its designed capacity.
On Sunday, nine aircraft were forced to wait for 20 minutes on the runway and 15 others had to queue before take off because of congestion.
Novianto Herupratomo, the vice president for aviation security at flagship carrier Garuda Indonesia, said the airport’s capacity needed to be expanded to accommodate the growing number of domestic airlines.
“The airlines and their aircraft are growing faster than the airport,” he said.
Novianto also called for an improvement of airport services, particularly the modernization of the airports radar system, which would provide more detailed positions of aircraft, making the system safer.
Batavia Air business director Hasudungan Pandiangan said the airport provided passengers with poor services, as shown by long queues at check-in.
“Of the four desks available at every check-in post, officers usually only open one of them. That makes it take a long time for passengers to get boarding passes and forces aircraft to delay taking off,” Hasudungan told the Post.
Air Asia spokeswoman Audrey Progastama said the existing waiting rooms at the airport were no longer sufficient for the number of passengers using the facility, particularly during peak seasons. She added that during such periods many passengers had nowhere to sit but on the floor because of the lack of chairs.
“We hope the airport operator considers building larger and more convenient waiting rooms,” she said.
Angkasa Pura II corporate secretary Hari Cahyono said the company was drafting a blueprint for an expansion of the airport. He said the project would take at least five years to complete.
“The grand design needs first to be approved by related government institutions including the Transportation Ministry,” he said.
The design would include an expansion of terminal III and the construction of another runway, Hari said.
Previously, the government also announced plans to upgrade the airport’s air traffic management system at an estimated cost of up to Rp 1 trillion.
Garuda mandates Rothschild as IPO adviser
Bambang P. Jatmiko. Bisnis.com, Jakarta – 02/09/2010
Indonesia's largest airline company PT Garuda Indonesia (Persero) has mandated Rothschild as a financial adviser for the company’s IPO (initial public offering).
According to a source familiar with the transaction plan, Garuda has appointed Rothschild to assist it in preparing of shares disposal into the market. The appointment is excluded three underwriters who had been previously been determined.
Rothschild will help to select six securities companies competing for selling agent. “Rothschild will help consortium of Garuda’s underwriters to select securities companies that will be a selling agent, he said.
Previously, Rothschild had also support the state-owned airlines to complete its debt restructuring with creditors by US$895 million. Meanwhile, the selected foreign securities companies to be a selling agent are Deutsche Bank, Bank of America Merril Lynch, Credit Suisse, Citigroup, Goldman Sachs and UBS.
Confirmed on the information today, Deputy Minister of State-Owned Entreprises (SOEs) Mahmuddin Yassin didn’t know the appointment. “That is entirely the authority of Garuda Indonesia," he asserted.
Fitch downgrades Berlian Tanker rating to B-
Wisnu Wijaya. Bisnis.com, Jakarta – 02/09/2010
Fitch Ratings has today downgraded Indonesia's PT Berlian Laju Tanker Tbk's (BLT) long-term foreign and local currency Issuer default ratings (IDR) to B- from B.
The outlook is negative. Simultaneously, the rating of US$400m senior unsecured notes due 2014 issued by BLT Finance B.V. and guaranteed by BLT has been downgraded to CC from CCC in step with the downgrade of the IDRs.
The recovery rating on the US$ notes remain at RR6 reflecting weak recovery prospects for unsecured creditors in the event of a default.
"The rating downgrades reflect BLT's challenging liquidity position over the foreseeable future. Although the chemical tanker market shows signs of stabilisation, BLT's committed capex through 2012 is significant and its high debt servicing needs-even after excluding capital market debt maturities-exceed operating cash generation at least until 2013," says Buddhika Piyasena, Director with Fitch's Asia-Pacific Corporates ratings in a press statement obtained by Bisnis today.
Fitch recognises BLT's good track record of raising significant amount of funds via many different sources for its capex and working capital needs since the global financial crisis began and shipping markets weakened.
Despite BLT's stretched balance sheet, given its position as one of the largest players in the international chemical tanker space, its quality assets and the relatively more favourable outlook for chemical tankers, Fitch believes BLT can continue to source funding for its ships on order.
However, the cash burn after servicing its bank debt and finance leases and its own capital needed to put down on capex can lead to a material reduction of BLT's cash balances over the next 12 to 18 months.
This is assuming maturing capital market debt would be refinanced, and that BLT can on average raise 70% of the value of committed capex from external sources; any worse outcome will further exacerbate the pressure on its liquidity.
Although BLT has done many things to improve its liquidity position over the past 18 months, its decision to invest USD66m in an associate stake in a ship repair yard in late-2009 and its ambitious plans for expanding into Indonesia's cabotage shipping space can be viewed as lack of seriousness on the part of management on short-term liquidity challenges the company faces.
"BLT's high cash balances increasing its liquidity buffer have been important for the maintenance of its previous 'B' rating. Fitch forecasts a material depletion of this liquidity buffer, and BLT's still impaired access to capital markets, increases its financial risk profile," said Piyasena.
Although the 2009 drop in chemical tanker rates have been less than expected by Fitch, given the still weak margins and its high debt servicing needs, BLT is unlikely to meet some EBITDA-based interest and debt servicing covenants in the short- to medium-term.
However, covenant violations in the shipping industry have become commonplace since the global financial crisis, and banks have been generally accommodative except in cases of serious violations.
The negative outlook reflects BLT's weak liquidity, its still high reliance on external funding for capex and debt refinancing, and the fragile recovery of global shipping markets.
A negative rating action will be taken if BLT's liquidity position weakens significantly; this could happen if lenders negatively react to BLT's non-compliance with certain financial covenants, and/or if BLT is not able to raise sufficient external financing.
A positive rating action is not likely in the next 12 to 18 months given the long-tern nature of rating concerns. BLT's leverage, measured by adjusted debt net of cash to operating EBITDAR, remains high at around 7.5x at June 2010.
Its operating cash generation in H110 was weak due to the payment of accrued expenses to suppliers. However, its working capital cycle is expected to revert to normalcy in 2H 2010
Infrastructure
Five Road Packages Delayed
Sutji Decilya. Tempointeractive.com, Jakarta 01/09/2010
Five out of 22 road packages funded by the World Bank through the Strategic Road Infrastructure Project (SRIP) have not been yet realized.
The Director General of Highway Construction and Maintenance at the Department of Public Works, Djoko Murjanto, said that this was caused by the difficulty in disbursing the loan with a total of US$ 200 million.
“It is still in the auction process and awaits the World bank approval. I hope that the road can be constructed after Idul Fitri,” he said today.
The five road packages are the Jambi South Ring Road, the Palembang section, the Lampung Bypass, the Cilegon-Pasuruan section and the Losari-Pejagan section.
According to the Program Director at the Highway Construction and Maintenance Directorate, Harris Batubara, the 22 road packages cost around US$ 290 million.
He explained that most of the US$ 200 million comes from the World Bank loan.
The remaining US$ 90 million comes from pure Rupiah. “This occurred some three years ago,” he said.
Some time ago, the Minister of Public Works Djoko Kirmanto wanted to cancel SIRP fund utilization because of the World Bank’s late funding disbursement.
He said that the government could still improve roads by using the state budget.
But the World Bank proposed itself to fund several national roads which had an expired lifetime, including the one in the North Coast.
The World Bank loan is effective since November 1 2007 and will be finished in 31 December 2011.
Since the beginning, the World Bank asked the auction counselor to make sure that the auction process runs smoothly before disbursing the fund.
Information and Communications Technology
Alcatel wins Telkom's network convergence project
Rony Yunianto. Bisnis.com, Jakarta – 02/09/2010
Alcatel-Lucent is appointed as the executing vendor that will facilitate convergence of Telkom's the Internet Protocol (IP) and optic networks. The convergence is aimed to anticipate rapid data traffic.
Rajiv Singh-Moleres, President Alcatel-Lucent for Asia-Pacific, said an integrated IP and optic solution allows the creation of Telkom's new architecture to help it decrease transport expenses sharply.
In the end, said Rajiv, the solution will help boost efficiency as it saves energy consumption and optimize the traffic in order to decrease the cost per bit.
“Telkom will gain access to the most integrated and diverse solution in optic and IP technology that ever exists nowadays, including the coherent 100G next generation solution which is the first in the industry,” Rajiv added.
In QI/2009 until Q1/2010, the total permanent customers of Telkom broadband increased 79% and customers of broadband mobile service jumped 607%. The convergence and network transformation will support Telkom to provide the next generation service to its customers.
In this project, Alcatel Lucent will supply the next generation of photonic service switch (PSS) 1830, which is well equipped with wavelength tracker and GMPLS control function tool. The latest equipment will be combined with IP/MPLS router service platform with tuneable DWDM (Dense Wavelength Division Multiplexing) interface.
Alcatel-Lucent will also give technical supervision and training about the integrated solution to Telkom's staffs.
Internet Users in Indonesia to Triple by 2015: Report
The Jakarta Globe, Jakarta – 02/09/2010
The number of Internet users in Indonesia is expected to triple by 2015, fueling growth for media companies and phone carriers, according to a study released on Wednesday by Boston Consulting Group.
The study found that the total number of Internet users in the so-called BRIC nations — Brazil, Russia, India and China — and Indonesia will double to 1.2 billion by 2015.That will be three times the number in the United States and Japan combined, up from two times as much at the end of 2009.
While mobile phones with Internet access will aid growth, personal computers will double in the five countries to more than 920 million, according to the report.
As consumers gain more access to the Internet, they’ll also spend more time online, providing a boon to entertainment providers, Boston Consulting Group said.
The surge in Web use will benefit media companies such as China’s Tencent Holdings and phone carriers including Telekomunikasi Indonesia (Telkom), analysts said.
“The fastest-growing Internet markets are those with low penetration rates and strong economies, and the BRIC countries all fall into these categories,” said Jake Li, an Internet analyst at Guotai Junan Securities in Shenzhen, China.
“The opportunities for online advertising and e-com merce in these markets are huge.”?
The number of SIM cards in use in Indonesia will top 100 percent of the population by 2015, meaning some users will have multiple devices, the report said.Tucker Grinnan, head of Asian telecommunications research at HSBC Holdings in Hong Kong, advises buying Telkom, the nation’s largest phone company, and Tencent, Asia’s biggest Internet company by market value.
“Of the three markets, China, India and Indonesia, we believe that Indonesia has the best prospects for organic growth in telecommunications revenue,” Grinnan said. “There is still a big rural opportunity.”?
Only 12 percent of Indonesians use the Internet, and only 5 percent use personal computers, but both of those rates are expected to triple by 2015, the report said.
Twenty percent of China’s population owns a personal computer, compared with 32 percent in Brazil and Russia and 90 percent in the U.S. and Japan, Boston Consulting said.
Tens of millions of additional users get online at Internet cafes or shared home or work computers, giving China 384 million Internet users at the end of last year, almost triple the total in 2006, the report said.
However, mobile phone penetration in Indonesia was 66 percent, higher than in India or China.
About 20 percent of Indonesian mobile phone users have more than one SIM card, and nine percent have two phones for personal use, mostly to take advantage of discounted network rates with family and friends.
With such high mobile penetration, the study found “unusually high” rates of mobile Internet use in Indonesia, with nine million mobile users, up from just 2.3 million in 2007.
The use of mobile e-mail and mobile payments and e-commerce was highest among the five countries studied.
“Indonesian digital consumers use their mobile-handset connections to meet a variety of needs that are typically met in other countries through PC-based Internet,” it said.
“Given the prevalence of mobile phone use in general among Indonesians, and their adoption of 3G, mobile Internet could well emerge as an alternative to home PC use and become a key growth pocket as 3G becomes more affordable and available.”