Ireland Eyes Investment in Indonesian Telecoms

Jakarta Globe, Arti Ekawati, May 28, 2010

Irish investors are targeting Indonesia’s communications and banking technology sectors to capitalize on the country’s rising population and robust economic growth.

Patrick O’Riordan, director of Enterprise Ireland for Indonesia, a trade and technology board, said private business in Indonesia was growing rapidly.

“This will demand an easy and safe banking system and telecommunication access in wide areas,” O’Riordan said on Thursday in Jakarta.

To satisfy this demand, investors from Ireland are expected to enter the banking technology sector and share their expertise, including establishing e-learning for Shariah finance and providing more affordable communication in remote areas.

Irish companies Tango Telecom, Altobridge and Openet are set to start business in Indonesia and cooperate with local mobile-phone operators.

O’Riordan said the telecommunication sector had much potential given the rising population and global free trade.

Since the implementation of the China-Asean Free Trade Agreement in January, Indonesia’s import value on telephones has been increasing. Based on Trade Ministry data, the import value on telephone goods from China in January was $138 million, about a 349 percent increase year-on-year.

“Therefore, finding qualified local partner is very important because of Indonesia’s very complex and huge market in telecommunications,” O’Riordan said.

Mark O’Sullivan, sales director for Altobridge for the Asia-Pacific region, said the company had met with several local mobile-network operators to discuss providing services in remote areas.

Many of Indonesia’s 240 million people live in rural areas spread across the country’s 17,000 islands, which are often underserved by communications networks.

“These are potential customers who can be served by local mobile operators by using Altobridge’s Remote Community solution, since we have satellite technology to provide services for people living in remote areas without any basic communication services,” O’Sullivan said.

To run its business in Indonesia, Altobridge would cooperate with more than one operator, as each operator has its own specific customers. O’Sullivan did not elaborate on how much the company planned to invest in Indonesia.

“We are in the process of looking for local-operator partners,” he said.

Richard O’Brien, Ireland’s ambassador to Singapore, said the Indonesian government needed to minimize obstacles for business development to boost foreign investment.

“Investors need transparency and predictability on tax payment. An attractive and predictable tax regime is urged so that people will know what they have to pay,” O’Brien said.

He added that the government should simplify investment procedures by implementing a one-stop service for investment and business licenses.

Based on Enterprise Ireland’s data, the trade balance between Indonesia and Ireland in 2009 was valued at 1.2 billion euros ($1.49 billion). This consisted of 650 million euros of Indonesian exports and 550 million euros of Indonesia’s imports from Ireland.