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)