Cellular operators to invest US$1 billion this year

Cellular operators to invest US$1 billion this year

The Jakarta Post, Jakarta

The country's cellular phone operators are projected to invest
some US$1 billion this year to expand their networks to meet
growing demand, according to the Indonesian Cellular Phone
Operators Association (ATSI).

"Most of the investments will be focussed on expanding
networks to set up new base transceiver services (BTS) and
upgrading short message services (SMS)," ATSI chairman Rudiantara
was quoted by Antara as saying over the weekend.

The country's top five cellular phone operators are: PT
Telkomsel, PT Satelindo, PT Excelcomindo Pratama, PT Natrindo and
PT Indosat MultiMedia Mobile (IM3).

Rudiantara said the funds would mainly come from the internal
cash flow of the operators, and added that some of the operators
planned to sell their shares on the stock market to raise fresh
funds to finance the investment.

He predicted that the number of cellular users would continue
to increase this year, mainly in provinces outside Java. Today,
40 percent of the country's mobile phone users live in Greater
Jakarta.

The number of cellular phone users has been growing at double-
digit rates during the past few years, and was expected to jump
to more than 8.5 million users by the end of 2002, from the
previous 6.57 million.

Rudiantara, however, said that revenue in the cellular
business would slow down this year.

"Although the (number of) subscribers will grow by about 55
percent, the total revenue will only grow by 45 percent," he
said, pointing out the declining purchasing power of the people
amid increasing fuel prices, electricity tariffs and fixed-line
telephone rates.

He predicted that industry revenue would reach Rp 20 trillion
this year, or about 60 percent of the projected revenue for the
country's telecommunications industry.

"Voice services will continue to be the main contributor to
the cellular revenue, and would contribute about 87 percent of
total revenues," he said.

He added that the revenue from non-voice services, mainly SMS,
would increase by 50 percent this year and contribute some 20 to
the cellular revenue.

Meanwhile, Wimbo Hardjito, director of Satelindo, said that
the company would expand its network to other provinces outside
Java, such as to Sumatra and Kalimantan.

He said Satelindo would set up new base transceiver services
in these provinces. Satelindo currently owns some 1,000 BTS
across the country.