Photo: Privacy

JAKARTA (TheInsiderStories) – The Indonesian government has made progress with its plan to send up a multi-function satellite, worth Rp7.7 trillion (US$568.3 million), with the aim of upgrading connectivity across the archipelago, in particular for areas not to be covered by the Palapa Ring broadband project.

The multi-function satellite is expected to provide fast internet access to remote areas in Indonesia which can be accessed by various government sectors, such as maritime, education, health, agriculture, communication and others.

A major portion of the investment will be used to procure and set up the satellite, at a cost of around $400 million. The time from the tender to the launch of the satellite is estimated at 36-48 months (3-4 years).

The project is now in preparation. While the government initially expected to open the tender in the fourth quarter of 2017, it is most likely to be held in the first quarter of 2018.

Minister for Information and Technology Rudiantara said the multi-function satellite is intended to complement the Palapa Ring broadband project being developed by the government, in cooperation with the private sector. The limitation of the Palapa Ring fiber-optic project is that it cannot cover a number of remote areas across the archipelago.

The Palapa Ring project is part of the government’s strategic initiative, called ‘Indonesia Broadband Plan’, which aims to connect 71 per cent of urban Indonesians to the internet by 2019, along with 49 per cent in rural areas. Areas beyond the reach of the Palapa Ring will be covered by the multi-function satellite.

Palapa Ring will provide fast broadband internet to the entire archipelago through an 11,000 kilometer-long undersea fiber-optic cable network, according to government estimates.

The Palapa Ring project will deploy 2,000-km of fiber-optic cable in the western part of the archipelago, 2,700-km fiber-optic in its central part and around 6,300-km of fiber-optic in eastern Indonesia.

Pre-Market Sounding

Last Friday (Dec. 22), the National Investment Coordinating Board conducted a so-called ‘Pre-Market Sounding’ session, attended by around 100 participants, representing satellite producers, telecom operators, financial institutions and related financial advisories.

The agency said the investment is estimated to reach Rp7.7 trillion, with a 15-year concession. The return on investment will come from availability payments, covered by a government guarantee, in order to assure investors.

Among companies that attended the pre-market sounding session were Arianespace, Aerospace Industrial Development Taiwan, Aerospace Long-March International Trade Co. Ltd, Thales Indonesia, Anhui Sun Create Electronics Co., Ltd., PT Pasifik Satelit Nusantara, SES Network, China Telecom, PT Telekomunikasi Indonesia Tbk (IDX: TLKM), PT Indosat Tbk (IDX: ISAT), along with trade representatives from the US, France and Russia.

Deputy Head for Investment Planning of National Coordinating Investment Board Tamba Parulian Hutapea said the pre-market sounding session was aimed at not only providing information about the project to potential investors, but also obtaining feedback from investors with regard to the overall project, product and financing schemes.

(US$1 = Rp13,560)

Written by Roffie Kurniawan, email: