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AT&T Gets Go-Ahead Call To Expand Into Indonesia
Shirley Wibisono & Bloomberg | June 08, 2011

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Mike.Jkt
9:08am Jun 9, 2011

This isn't good for the public...just ask someone from the US. AT&T will promise the consumer the world then stick it to you. This needs to be rethought.

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AT&T, the second-largest US wireless provider, said it had won a license to provide multimedia services in Indonesia, allowing it offer such services as teleconferencing and managing computer networks.

AT&T Global Network Services Indonesia, a local venture 95 percent owned by the US giant, is the first foreign operator granted such a permit in Indonesia, Roman Pacewicz, AT&T senior vice president of marketing and global strategy for business solutions, said on Wednesday.

AT&T will invest about $1 billion this year to enhance services on its global network offering cloud computing and mobile applications to help businesses increase productivity and cut costs, it said in May. Indonesia’s economy will probably expand 7 percent annually on average in the next five years, Nomura Holdings said in a report on Tuesday.

“This operating license will allow us to deliver services more seamlessly and effectively as the Indonesia market grows,” Pacewicz said.

Previously, AT&T relied on local partners to help set up virtual private networks for customers, he said. The company’s local venture will now expand to provide services including video conferencing directly to customers.

AT&T will also seek opportunities in Vietnam, where government is easing controls, he said.

With the license, the US firm has the chance to make new inroads here, Gatot S. Dewa Broto, a spokesman for the Ministry of Communications, said on Wednesday.

AT&T originally submitted its proposal for the license two years ago, but the ministry only granted the license on May 27.

“They see a potential to grow in Indonesia,” Gatot said, adding that the foreign firm would compete with the nation’s biggest telecommunications provider, state-owned Telekomunikasi Indonesia (Telkom), and other local players that already provide similar services.

Ermady Dahlan, chief operating officer at Telkom, said AT&T’s presence as a threat.

“There are different rules applied to local and foreign players,” he said. “I do not think there will be an issue as long as they stick to the rules in Indonesia.”

Ermady said it was common for foreign companies to aim for the Indonesian market.

“They will need to work with local operators because they do not have a license to build their own network,” he said, pointing to French firm Orange and Japan’s NTT as examples.