RI's cellular market continues to increase
JAKARTA (JP): Indonesia's cellular telecommunications industry will continue to grow significantly in the coming years, according to telecommunications experts.
Managing director of Odyssey Telecommunications International Inc, Marc Leroux, said here yesterday that operators would still have a chance to grow despite more new players.
He said that up to six Global Mobile Personal Communications by Satellite (GMPCS) providers would operate in Indonesia.
"There are already a number of cellular operators in Indonesia and more licenses will be issued, but other systems are inevitable," he said, adding that his company considered Indonesia one of the major telecommunications markets after Brazil, China and India.
Seven cellular operators are running three systems in Indonesia -- the Nordic Mobile Telephone system is operated by PT Mobisel, the Global System for Mobile communications (GSM) is operated by PT Satelindo, PT Telkomsel and PT Excelcomindo and the Advanced Mobile Phone System is operated by PT Metrosel, PT Telesera and PT Komselindo.
The government is to launch Monday the tender of 11 licenses for the Digital Cordless System (DCS-1800) and the Personal Handy-phone Service (PHS).
The 11 DCS-1800 and PHS licenses will be regional. The government has divided the country into seven telecommunications regions.
The licenses include six regional DCS-1800 licenses in Sumatra, West Java, Central Java, East Java, Kalimantan and the eastern areas and five regional PHS licenses in Sumatra, West Java, Central Java, Kalimantan and the eastern islands.
Another five new licenses have been awarded to different firms to run the two systems regionally and nationally. So there will be at least 23 cellular operators in 1998 at the latest.
Analysts predict that cellular operators in Indonesia will generate revenue of at least $700 million by the end of this year. This is expected to increase by at least four times by the year 2000.
Commenting on the new licenses, Indosat's director Bambang Sulistyo said the public would have more choice in selecting cellular systems. "Just like first, business and economy classes in airlines, each class will have its own market."
Director of engineering of PT Telkomsel, Garuda Sugardo, said the country's cellular industry had become more attractive with up to four systems adapted in Indonesia.
"The handsets trade will also be more profitable. Telecommunications equipment makers will make more dual-band or triplet-band handsets."
"On the other hand, people, particularly Indonesians, will face complicated choices as the handsets are all produced with the latest technology," he said.
Cellular operators will also face technological challenges, namely the frequency reservation relating to capacity, and booming subscriptions, according to Garuda.
In addition to the cellular system, GMPCS firms will be planning services in the country by 2001. An Indonesian firm PT ACeS will also offer satellite-network telecommunications systems.
Globalstar, Intermediate Circular Orbit (ICO), Iridium and the Equatorial Constellation Communications Organization (ECCO) are among GMPCS firms already cooperating with Indonesian firms in an attempt to penetrate Indonesia.
Leroux said Indonesia had a significant market for GMPCS services due to geography and other demographic factors.
He said his company was discussing cooperation agreements with some Indonesian firms.
Sources said Satelindo was a potential partner for Odyssey. "But there's no approval from the government yet. Meanwhile, Satelindo will hold an extraordinary shareholders' meeting on Monday," the sources said.
Odyssey will operate 12 satellites in the medium-earth orbit and seven earth stations. The US$2-billion system is expected to begin service in 2001. (icn)