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Controversy Over Tower Business for Foreign Investors Discourse

09:23:05 | 08 Jan 2016
Controversy Over Tower Business for Foreign Investors Discourse
Ilustrasi (dok)
JAKARTA (IndoTelko) - The discourse about the foreign investors’ opportunity to enter the tower business has sparked a controversy in Indonesia.

Indonesian Minister of Communications and Information Technology (MCIT) Rudiantara admitted that there has been no discussion related to the revision of the Negative Investment List (DNI) for telecom tower business.

"To my knowledge there has been no proposal to revise the Negative Investment List. That is a cross-ministry scheme, it can not only be done by our ministry," he said.

Rudiantara said he has not received any letter to revise the negative investment list in the telecommunications tower. "So far it is only for local businesses. But, if there is a need for foreign investors to enter, why not? We will see about it later," said Rudiantara.

Chairman of Indonesian Telecommunication Association (ATSI) Alexander Rusli said that the list revision for telecommunication towers also has not been discussed by its members. "ATSI has no position to respond to the issue, so far. The association is consisting of many parties." he said.

However, Rusli personally welcomes if foreign investors entering the tower business because the competition in the sector is already high with dozens of players.

"Previously it was closed for foreign players to make rooms for the locals. Currently many consolidations have been taken place in the sector. Even local players has already difficult to make money in this sector, it is ok for foreign players to enter if we hardly making money here. But this is my personal opinion," Rusli said.

Based on the Ministry of Communications and Information Technology regulation on Guidelines for the Development and Use of Joint Telecommunication Tower and the Ministers Joint Regulation of the Minister of Interior, Minister of Public Works, Minister of Communication and Information Technology and the Head of BKPM on Guidelines for Development and Utility of Shared Telecommunication Tower on Guidelines for the Development and Use of Shared Telecommunication Tower, mention that the tower sub-sector is closed to foreign investors.

The ministry's regulation stated that the field of construction services for tower construction as a form of buildings with special functions is closed to foreign investment.

Further, the tower operators, manager of the tower or the tower contractor who are engaged in the sector must be Indonesian Business Entities with the entire capital or owned by the domestic businesses.

The Joint regulation also mentioned that providers of telecommunication towers who are not telecommunications providers, managers of the tower or the tower construction services to build a national company.

Lately, news about the negative investment list revision proposal is spreading in the country stating that up to 49% foreign investors may enter the tower business.

"I do not agree if foreigners are allowed into the tower business. Since this is the only area in the telecommunications sector where national employers still play a role," said Chairman of the Indonesian Association of Microcell Infrastructure Peter Djatmiko.

Djatmiko said that in the upstream sector consist of operators and network providers, foreign investors have been dominant. It can be seen from the composition of share ownership in some operators such as Indosat, XL and Tri Indonesia.

"If foreign players are entering the tower sector, it will not bring added value to the development of the telecommunications industry in Indonesia as the most complicated matter in the tower industry is the local issues concerning licensing, communities, and others," Djatmiko said. Djatmiko said that currently many Indonesian small tower players exist. "The incoming of foreign tower businessmen with low funding sources will be pushing local players who bear the cost of higher interest rates," Djatmiko said. (es)

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