Indosat launches StarOne

Tony Hotland, Jakarta

Telecommunications firm PT Indonesian Satellite Corporation (Indosat) expects the revenue from its newest service -- the fixed-wireless phone StarOne -- to be able to compensate possible losses in its direct international dial service.

"I can't give any projection yet on how much StarOne can contribute to total revenue, but we hope that it can offset the possible losses from our international call service," Indosat director of fixed telecommunications and multimedia Wahyu Wijayadi said on Thursday after the launch of StarOne for the Jakarta area.

Indosat, previously the only player in the international call sector, is likely to experience declining profit in the business after rival PT Telekomunikasi Indonesia (Telkom) launched its international call service last month.

Telkom's target is to win 25 percent of market share.

The international call service accounted for 22 percent of Indosat's total revenue in 2003, while the cellular service contributed 62.1 percent. The remainder came from multimedia and other services.

With the capacity to serve 700,000 subscribers, Wahyu said in the medium term Indosat planned to sign up 350,000 StarOne subscribers in Jakarta and Surabaya, East Java.

Indosat first launched StarOne in Surabaya and surrounding areas Malang and Pasuruan in May. The company said it now had about 4,000 subscribers there.

"We plan to invest about US$40 million in the fixed-wireless service. StarOne will be mostly offered to residential areas and offices and business areas will be offered our fixed-line (I- Phone)," he said.

Wahyu said the company planned to invite investors to help it move into other areas.

The launch of StarOne was part of efforts to boost the number of people with access to fixed telephones in the country, which currently stood at around 9.5 million out of 215 million people nationwide, he said.

StarOne is a fixed-wireless service that allows cellular mobility within a designated area but with a much lower tariffs.

The service enables users to make long-distance and international calls and send short messages to other Indosat cellular lines (Mentari, IM3, and Matrix).

It also allows users to have access to internet at the speed of 153.6 kilobytes per second (kbps).

StarOne will compete with three other fixed-wireless systems in the market. They are Telkom Flexi (by Telkom), Esia and Mandara.

StarOne, like other fixed-wireless services, is compatible only with certain types of mobile handsets.