PT Telekomunikasi Indonesia Tbk, or Telkom, is urging the government not to issue more cellular-service licenses, even as it forecasts that next year’s penetration rates will rise higher, a Telkom official said on Wednesday.
“We asked the government to limit new telecom licenses because we already have 11 operators,” said Rinaldi Firmansyah, Telkom’s chief executive officer. “Telecommunication penetration in Indonesia will increase significantly in 2009 to more than 80 percent.”
He said the Indonesian market is maturing, with total penetration expected to rise to 67 percent this year. If more service providers obtain licenses, the current price war in Indonesia’s crowded cellular-service market could further intensify, possibly putting established providers out of business.
Rinaldi said Indonesia already has more cellular service providers than any other country in Asia. “Indonesia has 11 operators, Malaysia only has 3, India has 6 and China has just 2,” he said.
In November, Bloomberg reported that Telkom was planning to borrow up to Rp 9 trillion ($765 million) from domestic banks to help fund expansion next year.
Denny Suryo, Telkom’s vice president for investor relations, said on Thursday that Telkom has
already secured these funds from PT Bank Mandiri Tbk, PT Bank Negara Indonesia Tbk and PT Bank Rakyat Indonesia Tbk.
Telkom is also planning to build new super-portal Web sites, and has invested $5 million to open a sales office in Singapore as part of its regional expansion. “We’re expanding into news sites,” Rinaldi said.
Telkom’s total capital expenditure will hit Rp 50 billion per year starting in 2009. It will also invest $50 million in the construction of the Asian-American Gateway underwater cable between East Asia and the United States.