Indosat to focus on mobile telecoms sector

Indosat to focus on mobile telecoms sector

JAKARTA (JP): Publicly listed international telephone operator
PT Indosat plans to concentrate its future business on the mobile
telecommunications sector, a company executive said on Monday.

Indosat operation and technics director Garuda Sugardo said
the company would develop its future infrastructure facilities on
the wireless format, not the fixed-line network which is widely
used in the country at present.

"The basis of our business and infrastructure in the future
will be mobile telecommunications. We want to be a mobile
multimedia network service provider to anticipate the rapid
growth of Internet and multimedia use," he said.

He said that compared to the fixed-line network, the wireless
format was the better carrier for multimedia and the Internet, as
well as regular communication services, due to its higher
mobility, advanced technology, better transmission quality and
lower costs.

Garuda said the company was optimistic about its prospects in
the mobile telecommunications business, which he said could
generate twice the amount of revenue than fixed-line telephone
services.

Indosat, however, will maintain its international direct
dialing (IDD) business, which currently accounts for more than 80
percent of the company's revenue, he said.

He said prospects for the IDD business remained promising even
though the wireless business was predicted to grow more rapidly
than IDD.

Garuda said that globally, the IDD market grew by about 7
percent per year, the fixed-line telephone market by 11 percent
and the mobile telephone market by 50 percent.

"But in Indonesia we saw the mobile telephone market growing
by 100 percent even during the crisis. So, we're very
optimistic," he said.

Indosat expects the government to award it a license to become
a mobile telephone operator under the advanced GSM 1800 format in
August.

The company's corporate development director, Budi Prasetyo,
earlier said Indosat would start its new mobile telephone service
next year, with the target of signing up at least 300,000
customers in Jakarta alone during its first year of operation.

In a bid to anticipate the impending pressures of the global
market, the government said it would reform the
telecommunications sector by eliminating the monopolies currently
held by Indosat and state-owned telecommunications company PT
Telkom by 2002 or 2003.

Indosat and its subsidiary Satelindo hold the exclusive right
to provide international telecommunications services until 2004,
while Telkom controls fixed-line telecommunications until 2010.

The government said in return for the early termination of the
monopolies, it would award Indosat and Telkom various licenses to
enable both to transform themselves into full network and service
operators.

In addition to the GSM 1800 license, the government has also
offered Indosat and Telkom a contract to install a total of four
million telephone lines across the country between 2000 and 2004.

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