Tue, 05 Dec 2000

Indosat to start mobile service early next year

By Tantri Yuliandini

HONG KONG (JP): State-owned international telephone operator PT Indonesia Satellite Corporation (Indosat) will be ready to start the first phase of its mobile phone service in the third quarter of 2001, an executive said here on Monday.

Indosat general manager Indar Atmanto said that for the first phase, the company would focus on providing GSM-1800 network for the Jakarta-Bandung areas in West Java, Semarang-Yogyakarta-Solo areas in Central Java, the Surabaya-Denpasar areas in East Java and Bali.

"The project involves investment of Rp 1 trillion ($105 million) which will be generated internally," he said at the company stand in the International Telecommunications Union (ITU) Telecom Asia 2000 exhibition here.

The second phase of the Indosat Multi Media Mobile (IM3) is set for 2002, to cover the northern coast of Java, Medan in North Sumatra, Pekanbaru in Riau, The Dumai-Tanjung Pinang in Riau province, Pontianak in West Kalimantan, Balikpapan in Central Kalimantan, Samarinda in East Kalimantan, Makassar in South Sulawesi, and Manado in North Sulawesi, Indar said.

He said that the third phase would cover the southern coast of Java, and other provincial capitals.

"We hope the third phase of the project will be ready in 2003," Indar said.

Indosat assistant manager of strategic development Kun Wardana said that Indosat plans to cooperate with existing cellular operators like Satelindo, Telkomsel, and Excelcomindo to incorporate their customer base to the new network.

"We predict that the penetration of GSM-1800 to customers will be difficult unless backed by the GSM-900 customers that existing providers already have," he said.

Kun said that Indosat, who owns stakes in two of Indonesia's cellular operators, PT Satelindo (7.5 percent) and PT Telkomsel (35 percent), might even acquire one of the companies to provide it with the needed customer base.

Indosat may also let go of its stake in one company, he said. "It would be awkward to have to compete with our own subsidiary, wouldn't it?" Kun said.

The publicly-listed company also has plans to enter the multimedia business next year with its Indosat Mega Media (IMM) project.

"Having received our multimedia license, we plan to provide cable TV and even high-speed Internet connection," Indar said, adding that with broadband fiber-optic cables, Internet speed could reach up to 384 kilobytes per second (Kbps).

He said that the service will be ready for customers in Jakarta by the second quarter of 2001, and that the company was currently working on the content of the cable TV.

The service will target companies and individuals, especially those living in apartments and hotels, Indar said.

Indosat recorded unaudited consolidated net income of Rp 1.35 trillion ($142 million) in the period between January and September this year, an increase from the Rp 1.2 trillion recorded during the same period last year.

Indosat's shares are listed on the Jakarta Stock Exchange and the Surabaya Stock Exchange, and its American Depository Shares are listed on the New York Stock Exchange.

PT Indosat said recently that it would spend between Rp 11 trillion (US$1.2 billion) and Rp 15 trillion to finance an expansion program in the next five years.

Indosat planned to become a "Full Network and Service Provider" by 2005 when it started mobile, wireless, fixed-lines and broadband Internet services, he said in a recent hearing with members of the House of Representatives (DPR).

Indosat said it planned to invest Rp 319 billion this year for its existing international direct dialing (IDD) business, and Rp 202 billion for the Internet and the multimedia sector.

Next year, the company would invest another Rp 6.74 trillion in five areas comprising 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.