GSM operators to start DCS-1800 this year

GSM operators to start DCS-1800 this year

By Tantri Yuliandini

JAKARTA (JP): PT Telkom, PT Indosat and the country's three
GSM cellular operators plan to start their DCS-1800 networks this
year.

PT Telkom and PT Indosat, the first companies to receive
licenses to operate under DCS-1800 networks, will launch their
services in August.

Existing cellular operators PT Telkomsel, PT Satelindo and PT
Excelcomindo Pratama, which have previously been serving the
Indonesian cellular market under GSM-900 megahertz, expect to
start DCS-1800 services before the end of this year.

Telkom's TelkoMobile business development manager Dedi
Suherman said on Wednesday that he was optimistic about Telkom's
opportunities, despite fierce competition from the already
established market of the three other operators.

Dedi said that he had noticed that customer loyalty between
the services was very low, proven by the fluctuating growth of
customers between one operator and the next over several months.

"The flourishing sale of prepaid services is another
indication (of low customer loyalty). This offers opportunity for
new players to enter," he said at a seminar on the cellular phone
business here.

However, Dedi said Telkom realized that it would need a niche
to be able to succeed against other players, and that niche came
in the form of general packet radio service (GPRS).

GPRS is a packet-switched mobile datacom service that enables
high-speed transmissions needed for mobile Internet browsing and
e-mail.

"With a speed of up to 115 kilobit per second, hundreds of
applications can be made, least of all a mobile billing and
banking system," Dedi said, giving an illustration of the
countless applications that can be used with only a standard 56.2
kilobyte per second Internet connection including multimedia
applications.

Telkom will begin its services in Jakarta, Bandung and Bandar
Lampung, targeting about 200,000 customers, he said.

For its cellular project, the state-owned company invested
about Rp 90.5 billion (US$9.5 million).

It expects to install 400,000 lines within two years of the
initial launch, with the number of customers predicted to reach
495,000 within three years, especially with Telkom's plan for a
convergence system between fixed telephone line and mobile, Dedi
said.

"Customers could have a single phone number for both their
mobile and fixed phones, with a single billing system, and
unified messaging service," he said.

Another state-owned company, PT Indosat, also plans to market
its cellular service within the year.

Chief of Indosat's multimedia mobile project Hasnul Suhaimi
said the company would be ready to launch its mobile services
also in August this year, with GPRS technology gradually adapted
toward the third generation universal mobile telecommunications
system (UMTS) by 2004.

UMTS supports data transfer rates of 144 kilobits per
second for vehicular traffic, 384 kilobits per second for
pedestrian traffic and up to two megabit per second in support of
in-building services.

For the phase of the mobile service, Indosat will focus on
Java, Bali and Batam, constructing about 500 base transceiver
stations (BTS) in 11 cities, Hasnul said.

He said that the second phase, would cover major cities across
Indonesia, involving about 1,300 BTS.

Recently, Indosat issued bonds worth Rp 1.5 trillion (about
$158 million), of which 35 percent would go to the development of
its cellular business.

Contrary to public belief that the DCS-1800 needs a much
higher investment than the GSM-900, Hasnul said that in the long
run they both cost about the same.

"In terms of coverage, the GSM-900 is about 10 percent cheaper
than the 1800, but in terms of capacity it is 10 percent more
expensive," he said.

The GSM-900 has a bandwidth of 25 megahertz, while the DCS-
1800 has a 75 megahertz bandwidth and is capable of a much higher
capacity, Hasnul said, adding that in the meantime the DCS-1800's
wavelength measures only 16.5 centimeters, which is a more
limited coverage capability than GSM-900's 33-centimeters
wavelength.

Indosat conducted a trial call for its cellular system in late
December last year, both to the Indonesian consulate general in
Hong Kong and to Vice President Megawati Soekarnoputri in Saudi
Arabia from Jakarta, he said.

Hasnul said the prospects for the cellular business in
Indonesia was still wide open for new operators, as the market
was predicted to keep increasing at a rapid pace.

By the end of 2000, the number of cellular phone users in the
country was predicted to be about 3.7 million, he said, adding
that this year the number is expected to grow to about five
million users, and about 24 million users by the end of 2010.

PT Excelcomindo Pratama, a GSM cellular operator which has
also obtained a license to operate the DCS-1800, has a different
strategy in incorporating the network into its existing service.

Excelcomindo's general manager for engineering M. Danny
Buldansyah said that the 7.5 megahertz of frequency allotted for
its DCS-1800 network, in addition to the 7.5 megahertz already
used for operating the GSM-900 network, would be enough to
incorporate about three million subscribers.

"The expansion to DCS-1800 is crucial as network quality has
increasingly worsened in line with more utilization," he said.

Danny said that Excelcomindo would operate the DCS-1800 for
highly congested areas such as in the central business district
in Jakarta.

"We will also operate the service in public utilities such as
plazas and malls, also office buildings in the CBD," he said.

In upgrading the system, Excelcomindo assures that it would
not disrupt the existing system already available.

"Customers can still use their existing subscriber identity
module (SIM) cards, and will not even realize when their cell
phone system switches to DCS-1800 or back to GSM-900," he
explained.

However, those who own older handset models with only one band
would not be able to access the service.

"But we'll only begin to operate DCS-1800 in buildings in
2002, and by then almost all handsets will have a dual-band
facility," Danny said, adding that the operation of the network
in open areas was expected to be fully operational in April.

He said that Excelcomindo's focus for the system was on the
Jakarta area, where customers had reached more than 400,000
subscribers. Other areas would follow once the number of
subscribers exceeds 400,000, Danny added.