Cellular subscribers to grow 40% in 2003

Evi Mariani, The Jakarta Post, Jakarta

The number of cellular subscribers by the end of this year is expected to have grown by about 43 percent, or about five million, from 11.4 million as of the end of last year.

"Out of the total cellular market, operator Telkomsel holds a share of about 52 percent, Excelcomindo 16 percent and Satelindo along with Indosat 31 percent," Rudiantara, the chairman of Indonesian Cellular Phone Provider Association (ATSI) told The Jakarta Post on Friday.

The remaining one percent was held by smaller operators like Mobisel, Telesera, Natrindo and Komselindo, which operated non- GSM (global system for mobile communication) services, he explained.

He said that ATSI expected the market to grow by four to five million subscribers per annum for the next three years.

Last year the cellular operators saw more healthy growth.

"At the end of 2001, our subscribers amounted to 6.6 million people. The number grew by 4.8 million to 11.4 million at the end of 2002," he added. Thus, last year's growth in the number of cellular subscribers reached a sparkling 72 percent.

Rudiantara explained that the expected decline in growth was not because of weakening consumer purchasing power nor because of market saturation.

"Consumer demand is out there and still going strong. However, the operators cannot meet the demand because additional supplies will not offer high profitability. New subscribers generally come from the middle to lower income brackets, who spend only about Rp 50,000 (US$6) per month on communication," he said.

He said that operators needed to find a cheaper technology to serve such subscribers. "That's our challenge."

Another challenge was how to lower investment costs per subscriber. "The current investment cost for one new subscriber is about $200. At the beginning of our operation in 1995, the cost reached $1,000," he said.

"So, the lower the investment cost the better we will be able to serve as many subscribers as possible."