Cellular operators predict million new customers in 2000
Cellular operators predict million new customers in 2000
JAKARTA (JP): The association of cellular telecommunications
operators (ATSI) expects to see at least one million new
subscribers this year.
The head of the association's industry policy division,
Rudiantara, said over the weekend that the number of subscribers
should rise to over three million people by the end of this year,
from around 2.05 million registered at the end of 1999.
Nevertheless, he warned there would be a shortage in mobile
phone lines as the total line capacity currently amounted to 2.2
million lines.
He said operators would still suffer from financial hardship
and therefore would not be able to invest in new infrastructure
if the government does not increase cellular phone tariffs.
"If the government do not raise the tariffs at a sufficient
level this year, I'm afraid operators will not be able to build
new network facilities to meet skyrocketing demand since they are
already short of funds," he told The Jakarta Post.
Rudiantara said the economic crisis had severely hit mobile
phone operators, making them unable to make major investments to
upgrade facilities, let alone build new lines.
He said the amount of total investment by all operators had
declined sharply from between $600 million and $800 million a
year in 1995 and 1996 to only $100 million a year since 1997.
He said the ailing industry had so far survived the crisis
thanks to the steady increase in the number of subscriptions.
All the country's cellular phone operators booked a positive
growth in revenues from Rp 2 trillion in 1998 to Rp 3.2 trillion.
He said the industry's revenues were expected to double this
year to reach over Rp 6 trillion, in line with the predicted
increase of subscribers.
But the increase in revenues, which were all charged in
rupiah, had failed to bail out operators from their financial
hardships since about 90 percent of investment in the industry
was made in U.S. dollars, he said.
"There will no be big investment to build new facilities or
lines this year unless the call tariff is increased to a more
reasonable level," he said.
The government currently has the right to set tariffs for both
cellular as well as fixed line services.
Rudiantara said the government should relinquish its control
over telephone tariffs and let the market decide the level of
tariffs.
He said a market driven scheme would benefit subscribers
because it would automatically abolish the large differential
between the official prices on prepaid telephone cards and the
rates in the black market.
It would also benefit operators as it would allow them to set
the price at a sufficient level to their profit interest without
necessarily extorting the customers, he said.
The tariff for mobile phone call service here is now set at Rp
325 (about 4.6 U.S. cents) per minute, much cheaper than the
average international charge of 15 U.S cents per minute.
Subscribers are also required to pay a compulsory monthly
subscription fee of Rp 65,000 per user.
Rudiantara said the ideal call tariff for Indonesia's mobile
phone industry was around 11 U.S. cents per minute, a figure
which operators expected to be gradually achieved in the next two
or three years.
If operators could set their own tariffs, they would be able
to accumulate funds needed to invest in infrastructure to
accommodate the growing demands.
In addition, higher tariffs would also slow down the growth of
demand to a level that would be manageable for operators.
According to ATSI, the number of mobile phone subscribers has
been constantly growing in the past years despite the prolonged
economic crisis.
The number of mobile phone subscribers across the country
increased from over 980,000 in 1997 to 1.1 million in 1998 and
2.05 million in 1999.
Rudiantara said the economic crisis had, nevertheless,
affected the productivity of call usage. Mobile phone usage had
decline to an average of Rp 190,000 (US$27) per user per month in
1998 from Rp 250,000 per user per month in 1997, he said.
Usage had bounced back to Rp 300,000 per user per month in
1999 in line with the easing off of the economic crisis' impact,
he said.
"We expect usage to continue climbing up this year to hit Rp
400,000 per user per month," he said.
Indonesia currently has seven operators offering three
different mobile phone systems. PT Satelindo, PT Telkomsel and PT
Excelcomindo run the Global System for Mobile Communications
(GSM); PT Telesera, PT Metrosel and PT Komselindo run the
advanced mobile phone system (AMPS); and PT Mobisel runs the
Nordic mobile telephones (NMT) system.
Data from state-owned telecommunications company PT Telkom
showed that Satelindo served 606,619 subscribers as of the end of
September last year, while Telkomsel had 799,818 subscribers,
Excelcomindo 321,000 subscribers, Telesera 6,191 subscribers,
Metrosel 35,449 subscribers, Komselindo 40,196 subscribers and
Mobisel 12,085 subscribers. (cst)