Korean cell phone makers seek to dominate local market

Leony Aurora The Jakarta Post/Jakarta

Cellular phone users today have an unsurpassed variety of choices: from clamshell to sliding panels, from the size of a matchbox to a brick, from regular ring tones to polyphonic ones or a cat's meow, from basic functions to a "folded office".

However, most of the newest functions are reserved for cell phones that use the Global System for Mobile Communications (GSM) system. In the fixed-wireless service sector, which uses Code Division Multiple Access (CDMA) technology, the models are not nearly half as diverse as GSM models.

Korean electronic firms have opted to go with CDMA in Indonesia, believing that the sector will pick up as customers opt for the lower fees -- nearly equal to the fees charged by fixed-line phones provided by state telecommunications firm PT Telkom.

"Some of our CDMA models are still low-end, but we plan to upgrade and gradually release only high-end ones," said Lee Kang Hyun, a director at PT Samsung Electronics Indonesia (SEIN).

Samsung hopes to sell one million CDMA phones this year. "We will launch 20 new models for GSM and five new models for CDMA," said Lee.

The company, which claims to control as much as 20 percent of the overall cellular phone market in Indonesia as of the end of 2004, wants to see this figure rise to 23 percent this year.

CDMA phones are expected to gain in popularity this year, as operators' services improve and people become more accustomed with the technology. The low availability of fixed-lines -- only about nine million of the country's 220 million people have access to fixed-line phones -- should support the trend.

Samsung got a jump on other CDMA phone manufacturers by cooperating with Telkom's fixed-wireless service Flexi and Mobile-8 Telecom's Fren since 2002.

Telkom has said that it plans to boost Flexi's subscriber base from 1.2 million in 2004 to two million in 2005, while Fren is targeting one million new customers this year.

LG Electronics Indonesia (LGEIN) also plans to get a piece of the CDMA pie with a program with Fren, set to be launched in the second semester of the year.

"Our CDMA products are the second-most used around the globe," said LGEIN president director Kee-Ju Lee. "In Indonesia we are only beginning."

The firm is currently surveying the market, specifically GSM phone users, to determine the appropriate strategy to attract loyal customers.

"In my opinion, the middle market is the most suitable for us to start. Then (we will) transfer to premium items," he said.