Fiber optic network provider PT Power Telecom has started the second phase of a project spanning Java that will help increase Internet and telecommunication subscribers, an official says.
The project consists of an 833 kilometer high-speed connection linking Jakarta and Surabaya, which will compliment a 500 kilometer network installment in Greater Jakarta and Bandung, West Java, expected to be completed next month.
The total network development in Java is expected to absorb Rp 800 billion (US$86 million) in total investments, coming entirely from the company's internal cash flow.
"We're targeting to finish the development of this fiber optic network from Jakarta to Surabaya in September," president director Dicky Tjokosaputro said in a press conference on Thursday.
The company signed a contract last year with state-owned railway company PT Kereta Api to install the network along its railway in a 20 year long land agreement.
"We will use the rail track because we don't want to cause more traffic jams by developing it under sidewalks," he said.
Dicky said that after Java, the company would expand its infrastructure development further.
"We plan to develop infrastructure in Sumatra next year and Kalimantan in the next four years," he said.
In addition to the fiber optic networks that will form the backbone of mobile telecommunications in the country, the company has also established Wi-Fi (Wireless Fidelity) and Core Internet Protocol networks, offering high-speed Internet access in Jakarta, Solo, Yogyakarta, Semarang and Boyolali.
Dicky said the company had allocated Rp 5 trillion to finance its entire capital expenditures for the next five years, adding that the business had become more lucrative as most players in the telecommunication industry had to improve cost efficiency amid stiffer competition.
"As operators are competing to attract more subscribers, they will need larger bandwidth capacity to support transmitting data, voice and picture," he said.
He said while operators usually built their own network infrastructures, they were now able to protect their capital and rent the facility from Power Telecom.
Sylvia W. Sumarlin, head of the Indonesian Internet Service Provider Association, said there were 281 Internet service providers and 25 million Internet users in the country, with the later figure expected to grow 25 percent this year.
There are 11 competing mobile telecommunication service providers in Indonesia, serving 122.1 million subscribers. (rff)
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