Indosat to expand into cellular business

Indosat to expand into cellular business

JAKARTA (JP): Publicly listed international telephone operator
PT Indosat expects to expand its business into the wireless
communications service next year, the company's senior executive
said here on Friday.

Executive vice president for corporate development Budi
Prasetyo said Indosat would provide mobile telephone service
under the GSM 1800 format.

Budi said that the company will initially launch the new
cellular service in the greater Jakarta greater, with a
subscription target of at least 300,000 customers in the first
year of the operation.

"Presuming that the government awards the license in the
middle of this year and the development of the infrastructure
goes smoothly, insya Allah (God willing) we will start our mobile
phone operation next year," he told The Jakarta Post on the
sidelines of the Indonesian International Telecommunication,
Media & Information Technology 2000 exhibition and seminar.

Director general for post and telecommunications Sasmito
Dirdjo said on Thursday the government would award Indosat and PT
Telkom with new licenses as mobile telephone operators for the
GSM 1800 format in August as part of its plan to turn the two
firms into full network and service operators.

Budi said the mobile communications business was very
essential to help Indosat accelerate the transformation of its
status from just an international telephone call operator into a
full network and service operator.

"Just like Telkom, Indosat is dying to immediately get the
green light to start the cellular business... it can help us
create a vast customer base to be used as an asset in the near
future when we eventually enter the fixed telephone service," he
said.

The government said that in a bid to anticipate the impending
global market it would reform its policy on the telecoms sector
by eliminating the monopoly currently enjoyed by Indosat and
Telkom by 2002 or 2003.

Indosat and its subsidiary Satelindo currently hold the
exclusive rights to provide international telecommunications
service until 2004, while Telkom controls the fixed line
telecommunications until 2010.

Budi said Indosat had no objection to the government's plan to
lift the company's monopoly before 2004.

"The time frame is suitable, I suppose. Insya Allah, Indosat
will be ready with sufficient fixed and wireless infrastructures
at that time," he said.

He said the government had offered Indosat and Telkom the
option to build a total of four million lines comprised of fixed
lines and wireless local loop lines during the period 2000 to
2004.

Indosat and Telkom will further negotiate on the allocation of
lines to be developed by each company, he said, adding that it
will cost the company about $1,000 to install a single fixed
telephone line.

Indosat, which reported first quarter net income of Rp 433.8
billion (US$54.2 million), lists its shares on the Jakarta and
Surabaya Stock Exchanges, while its American Depository Shares
(ADS) are listed on the New York Stock Exchange. (cst)