Cellular phone use to increase steadily

JATILUHUR, West Java (JP): The government's plan to license more operators in the next few years, coupled with the decrease of handset prices, will help maintain the high growth of cellular telecommunications services until 2000, an executive said.

A director of cellular operator PT Telkomsel, Ardhin Ichwan, said here yesterday that cellular telecommunications services are likely to grow in the coming years at rates higher than those projected by Merrill Lynch of the United States.

According to Merrill Lynch the country's cellular telecommunication services, which expanded by 41 percent in 1993 to 80 percent in 1994 and to 127 percent last year, might grow by 97 percent this year.

The growth rate might decline to 76 percent in 1997, to 37 percent in 1998, to 38 percent in 1999 and to 31 percent in 2000.

Ardhin told reporters in a telecommunications workshop held at the training center of state-owned PT Indosat here that better services and lower prices of handsets resulted from tighter competition will surely prop up demands in the coming years.

There are currently seven mobile cellular telecommunications operators in Indonesia, applying three different systems -- the Advanced Mobile Phone System, Nordic Mobile Telecommunications and the Global System for Mobile Communications. They have attracted some 400,000 subscribers throughout the country.

The government plans to launch an open bid to select an undisclosed number of new cellular operators with improved cellular technologies, including the Personal Handy-phone System and the Digital Cordless System.

An Indosat manager, Sutrisman, said that price reductions will continue in the coming years because the global telecommunications industry is also marked by the downward trend of tariffs.

"Tariff restructuring in the country, therefore, is inevitable due to fiercer competition," he said.

When asked for comment, the Ministry of Tourism, Post and Telecommunications' Secretary-General Jonathan L. Parapak refused to specify whether the government will set new telecommunications tariff structures.

According to Merrill Lynch, even though the growth rate of Indonesia's cellular services will decline to 31 percent in 2000, the rate will remain the highest in eastern Asia.

The growth rate of cellular services in China, for example, is likely to reach only 25 percent in the year 2000, in the Philippines 20 percent, in South Korea 19 percent and in Taiwan 16 percent.

However, the rate of market penetration of cellular services in Indonesia will remain the lowest in the region, which is estimated at only 0.2 percent in 2000, as compared to 38.1 percent in Hong Kong, 27 percent in Singapore, 18.2 percent in South Korea and 11.3 percent in Malaysia. (icn)