Govt Signs Second Palapa Ring II Concession Agreement

The Indonesian Ministry of Communication and Information Technology has signed a second concession agreement with a consortium led by a state-owned company for the central section of the Palapa Ring II project on Friday (04/02), just five days after the first concession agreement, which will ensure the availability of high-speed Internet services in Indonesia. (Antara Photo/Dewi Fajriani)

By : Tabita Diela | on 10:22 PM March 04, 2016
Category : Business, Economy

Jakarta. The Indonesian Ministry of Communication and Information Technology has signed a second concession agreement with a consortium led by a state-owned company for the central section of the Palapa Ring II project on Friday (04/02), just five days after the first concession agreement, which will ensure the availability of high-speed Internet services in Indonesia.

Len Telekomunikasi Indonesia, previously known as the Pandawa V consortium, is entitled to a 15-year concession for the broadband connection worth Rp 4 trillion ($304 million) in net present value.

"We broke a record. In a week, we signed two contracts. I hope the financial closing would be as fast,” ICT Minister Rudiantara said.

The consortium – which is led by the state-owned company Len Telekomunikasi and consists of investment firm Teknologi Riset Global Investama, fiber-optic installer Sufia Technologies, shipping company Bina Nusantara Perkasa and IT service provider Multi Kontrol Nusantara – will be responsible for connecting Kalimantan, Sulawesi and North Maluku with around 2,700 kilometers of fiber-optic cable that will span across land and sea.

The broadband connection in the central part of Indonesia, which will cost Rp 38 trillion, is expected to be online on Jan. 1, 2019. Overall, the Palapa Ring II project, which will install 11,000 kilometers of fiber-optic cable across the archipelago, is expected to be online at the same time.

The ministry signed an almost identical agreement on Monday with Palapa Ring Barat, a consortium of Jakarta-based telecom firm Mora Telematika Indonesia and submarine cable deployer Ketrosden Triasmitra.

Both consortiums will be paid under an availability payment scheme , which is a new arrangement for Indonesia's telecommunication sector.

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