multichannel connect
careers
all access

News

Indonesian Platforms Future in Question

5/24/1998 8:00 PM Eastern

At press time, Indonesian direct-to-home provider
Indovision was still scheduled to relaunch its service this past weekend, despite the
country's violent civil unrest and financial turmoil.

Indovision was slated to begin transmissions from the
Cakrawarta 1 satellite, also known as Indostar, with an expanded, 30-channel service
Saturday, May 23. But with Jakarta, the Indonesian capital, immersed in dramatic changes
resulting from violent unrest that precipitated the resignation of President Suharto last
Wednesday, Indovision spokesman Keith Loveard admitted that the company could only hope
that the launch would go ahead.

"Realistically, pay TV is a low priority at the
moment, when a lot of people are just worried about getting adequate food supplies,"
Loveard said.

The DTH project has been dogged by ill luck, and it faces
an uncertain future, given Suharto's resignation. Peter Gontha, president of Datakom,
Indovision's parent, is a close business associate of Suharto's son, Bambang
Trihatmodjo. And with the president forced out of office, his family's massive
business interests are threatened.

Before Indostar was set to switch on, Indovision was said
to have 28,000 DTH subscribers through transmissions from the Palapa C2 bird. A further
14,000 took the Indovision package of channels via a cable system serving upscale
apartments co-owned by Datakom and the Lippo Group.

The platform contains most international services,
including HBO Asia, Cinemax, Discovery Channel Asia, TNT & Cartoon Network, CNN
International, ESPN Asia and a bouquet of Star TV channels. Star has overseen
Datakom's technical rollout of the platform, which also includes five Indonesian
terrestrial channels.

The platform is further threatened because, as Loveard
noted, "tens of thousands" of people in Indovision's target market of
expatriates and well-off Indonesians had fled the country due to the bloody riots that
have taken the lives of hundreds of people.

"They are in the A/B market, and it is a big loss. We
can only hope that some measure of confidence will return to this country. We think that
even if this is a slow process, there will be an adequate market for us," he added.

Indovision has also been forced to raise its prices, as the
plummeting value of the rupiah means that program and equipment costs have shot up.

"For everyone that we sign up, we lose money. It has
to go up, and we only hope that our customers will understand this," Loveard
explained.

The complete package of channels is taken by 90 percent of
subscribers. This will now cost 99,900 rupiah ($US10.58) per month, along with a 10
percent government luxury tax.

September