Indosat to spend up to Rp 15t for expansion
Indosat to spend up to Rp 15t for expansion
JAKARTA (JP): State-owned international call operator PT
Indosat said on Thursday it would spend up to between Rp 11
trillion (US$1.2 billion) and Rp 15 trillion to finance an
expansion program in the next five years.
Indosat president Hari Kartana said the company would soon
issue rupiah-denominated bonds to partly finance the expansion
projects.
"The funds (for the investment) would come from among other
sources, bonds in rupiah and from a strategic partner, whom we
hope will also bring some expertise," Hari said in a hearing with
the House of Representatives' Commission IX, which oversees
financial affairs.
He said that Indosat was planning to become a "Full Network
and Service Provider" by 2005 when it would start mobile,
wireless, fixed-lines and broadband Internet services.
Hari said the company would also adopt third generation (3G)
wireless services that would allow mobile phones high speed
internet access.
The expansion of the services, he said, would be implemented
gradually.
Indosat said it planned to invest this year Rp 319 million for
its existing international direct dialing (IDD) business, and Rp
202 million for the Internet and the multimedia sector.
Next year, the publicly listed state company would invest
another Rp 6.74 trillion in five areas comprising of its existing
businesses, mobile phone service, telecommunication
infrastructure, domestic call service, and the Internet and
multimedia.
In 2002, Indosat would spend another Rp 2.89 trillion, in 2003
Rp 1.45 trillion, in 2004 Rp 1.39 trillion and in 2005 Rp 1.13
trillion, the company said.
Hari said the investment plan reflected the changes in the
telecommunication sector, which now emphasized on providing
mobile multimedia services.
Indosat has said earlier that it would focus its future
business on the mobile telecommunication sector.
According to Hari, the low market penetration of telephone
lines and mobile phones, of around three percent and 1.5 percent
respectively, offered Indosat high growth potential.
Indosat is holding monopoly rights in operating international
calls, but the government plans to scrap Indosat's right by 2003.
The company will, however, be allowed to operate domestic call
services when PT Telkom ends its monopoly in 2002.
The government is now considering a merger between Indosat and
state-owned local telephone operator PT Telkom as preparation for
the open market.
But Hari said that Indosat preferred to remain separate from
Telkom, leaving "two giants' in the local telecommunication
market. (bkm)