State telecommunications company PT Telkom will invest more in high-speed Internet services to counter market share gains by new entrants in the cellular industry, including Hong Kong billionaire Li Ka-shing.
The company will spend $50 million this year to upgrade its network, president director Rinaldi Firmansyah said in a recent interview, according to the International Herald Tribune. He declined to provide a comparative number or a time frame for the investment.
"Competition in the cellular business" is a concern, he said. "What we'd like to do is increase broadband sales."
Telkom expects to raise the number of its high-speed Internet users 13-fold to 2 million by 2010, he said. The data services unit's sales tripled in the first half. By comparison, the mobile business rose 21% as competition drove down the costs of voice calls to as little as Rp150 ($0.02) a minute.
The number of people using Internet services in the country is forecast to rise 72% to 43 million by 2009, according the Indonesian Internet Service Provider Association. The country has a population of about 234 million people.
Telkom's second-quarter profit rose 52% from a year earlier to Rp3.58 trillion, with the bulk of the gain coming from its cellphone business, as sales expanded 24% to Rp29.8 trillion.
First-half revenue from data services, comprising mostly high-speed Internet, tripled to Rp1.11 trillion. Revenue from cellphone services climbed to Rp11.4 trillion, accounting for about 38% of Telkom's sales.