Indonesia’s broadband plan moves into next stage … finally!

• Nationwide plan first announced in the late 1990s
• Palapa Ring project divided into three ‘packages’

 
AFTER a delay of nearly two decades, Indonesia’s plan to wire up its people is ready to proceed with the ambitious Palapa Ring project moving into activation.
 
To connect the entire archipelago, the Rp1.38-trillion (US$105.6-million) project will involve laying down 11,000km of undersea fibre-optic cable, to be divided into three sections: The West, Central and East packages.
 
The Palapa Ring project was previously known as Nusantara-21, first announced in the late 1990s but delayed after the Asian economic crisis hit the region.
 
Finally in February this year, Indonesia’s Minister of Communications and Information Technology Rudiantara announced an agreement with private companies to start building the submarine backbone.
 
The West package will be executed by the Moratel-Triasmitra consortium comprising PT Moratelematika Indonesia and PT Ketrosden Triasmita. This segment will connect Riau (Sumatera) to Natuna Island with 2,000km of fibre-optic cable. It is estimated to cost Rp1.28 trillion (US$97.7 million).
 

 
Director of special telecommunications at the Ministry of Communications and Information Technology Ismail (pic above) said the West package is at an advanced stage after the consortium secured funding from Bank Mandiri.
 
“Although the project hasn’t broken ground yet, the infrastructure financing has been completed,” he said in Jakarta on May 24, on the sidelines of a press conference announcing the Central package financial agreement.
 
Meanwhile the Central package has been awarded to the Pandawa Lima consortium consisting of PT LEN Telekomunikasi Indonesia, PT Teknologi Riset Globa Investama, PT Sufia Technologies, PT Bina Nusantara Perkasa, and PT Multi Kontrol Nusantara.
 
The Central package will connect 17 cities in Kalimantan, Sulawesi, North Maluku (including Sangihe-Talaud Island) with 2,700km of fibre-optic cable.
 
PT LEN Telekomunikasi Indonesia president director Wahyu Pantja Gelora said the project would cost an estimated Rp790 billion (US$60.3 million).
 
“We are looking for loans from either state-owned or local private banks. With the support of the Government as a guarantor, we are convinced we will be able to close the financing by September at the latest,” he told the press conference.
 
He added that China’s Huawei Technologies Cot Ltd has been appointed the technology partner for the project.
 
“We are targeting the [Central package] to be finished by the second quarter of 2018,” PT Bina Nusantara Perkasa chairman Johnny Yusuf Abdullah told Digital News Asia (DNA).
 
East package the most challenging
 

 
Anang Achmad Latif (pic above), head of infrastructure development at the Ministry of Communications and Information Technology, however said that the East package isn’t ready to move yet.
 
Among the main obstacles are the complexity of the area and the lack of infrastructure, he argued.
 
“The East area is different, where 80% of the connectivity will consist of undersea fibre-optics and 20% on land,” Anang said.
 
Developing the land infrastructure would depend heavily on the concurrent development of roads and electrical supply, which comes under the Department of Public Works and Public Housing, he noted.
 
Meanwhile, Ismail said three parties are ready to bid for the East package. The tender process is in place, with bids to be submitted by the end of May. A decision would be made on June 20.
 
The three expected to make a bid are PT Telkom Indonesia; the PT Moratelematika Indonesia consortium (comprising PT Moratel, IBS and Smart Telecom); and another consortium made up of PT XL Axiata, PT Indosat Tbk and PT Alita Praya Mitra.
 
“The estimated cost for the East project is around Rp5 trillion (US$365 million) in capex (capital expenditure), with the assumption that this would scale to Rp14 trillion (US$1.02 billion) over the next 15 years,” said Ismail.
 
The East package will connect East Nusa Tenggara, Maluku, West Papua, and Papua (including rural Papua) with 6,300km of fibre-optic cable.
 
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