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)