JAKARTA -- The mobile unit of Indonesia's state-owned telecommunications company, Telekomunikasi Indonesia, won a spectrum for 1 trillion rupiah ($74 million) as it aims to extend its dominance in the country.
The Ministry of Communications and Information Technology on Tuesday announced Telekomunikasi Selular, or Telkomsel, as the winner of an auction of a 30-megahertz block on the 2,300 megahertz band. The move will expand Telkomsel's network capacity by 30%, according to Lucky Ariesandi, an analyst at Yuanta Securities.
Mandiri Sekuritas, a local brokerage firm, called the bidding price "fair." Under Indonesian regulations, Telkomsel will have to pay an "upfront fee" of 2 trillion rupiah, or double its bidding price, within 10 days of being declared the winner, aside from the annual license fee.
The high bid by the country's largest telecom company underscores its mission to further expand its services across Indonesia, as it spearheads the government's policy of boosting the digital economy. The company, which is partly owned by Singapore Telecommunications, already dominates the country's mobile telecommunications market of 178 million subscribers as of June. It has 150,000 base transceiver stations across the archipelago, more than its two closest rivals -- Indosat and XL Axiata -- combined.
Attention will now shift to the auction of two blocks of a 2,100-megahertz band, slated for Oct. 24. Government regulations prevent Telkomsel from bidding on those blocks. Indosat, controlled by Qatar's Ooredoo, is expected to compete against XL Axiata, a unit of Malaysia's Axiata Group, and smaller rival Hutchison 3 Indonesia for those blocks.
