Indosat to start mobile service early next year

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.