Networking business on the move

JAKARTA (JP): The private networking and wiring business in Indonesia is expected to be worth $250 million this year and to grow rapidly with the country's burgeoning economy.

Executives of U.S. firms Lucent Technology and Digital Equipments said Saturday that Indonesia's growing networking market would attract multinational wiring and networking providers to set up manufacturing facilities here.

"Indonesia has very good potential for business expansion as its market is picking up," said M.W. Song, a general manager at Singapore's Digital Equipment Asia Pacific Pte. Ltd.

They said Indonesia's participation in the Information Technology Agreement would help make the country a more attractive place to make networking hardware.

Lucent Technology's country business manager, Redi Subekti, said Indonesia's participation in the agreement would pave the way to modernize the country's information infrastructure.

"Information technology is a prerequisite for a developed economy. In addition, it will attract the most sophisticated information technology products into the country. Thus, it will benefit the country's economy as a whole," Redi said.

Redi said Lucent Technology, an AT&T subsidiary, would establish copper and fiber optic wiring production facilities in Indonesia within three years.

"For the time being, we consider the market as not yet mature enough, and thus we need to wait until the next two to three years," Redi said.

He said the networking business had been growing by between 30 percent and 40 percent a year and to be worth over US$250 million this year, of which 45 percent would go to hardware, 35 percent to software, 10 percent to wiring and 10 percent to services.

Song said Digital's market share in Indonesia was still small, worth just $1.5 million last year. But she expected this to double this year.

She said Digital was determined to compete with other network providers here, like Bay Networks which has already set up wide links with banks and other financial institutions.

Redi said Indonesia's wiring business was expected to be worth US$25 million this year, of which Lucent expected to get 40 percent.

Wiring's high growth has been attributed to the increasing use of local area networks by private companies, including building management firms.

Private wiring and networking is a small part of Indonesia's total wiring and networking business.

The networking business' value in the public sector is expected to reach US$1.25 billion this year.

Redi said Lucent expected to grab 20 percent of Indonesia's public network market. (rid)