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.