Satelindo to expand cellular network

Satelindo to expand cellular network

JAKARTA (JP): Cellular telephone operator PT Satelit Palapa
Indonesia (Satelindo) will continue with its expansion plans
despite the economic crisis, an executive at the company said
here on Wednesday.

The company's cellular director, S.W. Ouwens, said on
Wednesday Satelindo would install new equipment worth US$170
million to support its prepaid card service.

"On the first of July this year, we will serve Bali and
gradually move on to serve Kalimantan, Sumatra, Sulawesi and
Ambon," he said.

Ouwens said the expansion plan would not require fresh funds
because the $170 million worth of equipment was procured before
the crisis hit in the middle of 1997.

Head of customer service Dino Mahendra said the company had
not used the equipment at the time because the number of
customers and scope of coverage was not growing as rapidly as it
currently is.

Satelindo, one of the country's three Global System for Mobile
(GSM) operators, currently serves about 520,000 subscribers in
Java and Madura with its postpaid and prepaid cards.

He said that with the completion of the expansion project by
the end of this year, its prepaid card could be used in all of
the country's major cities.

Unlike its postpaid service, the company's prepaid service
already covers most of the country's 27 provinces.

He said the company was lucky to be able expand its business
while other operators were being forced to cut back their
services due to financial hardships.

Reports have said several cellular operators were forced to
move transmission components from one location to another because
they could not buy new components.

"We are also affected by the financial crisis, which somehow
cut customers' telephone usage, but we try to survive," Dino
said.

He said the average charge for Satelindo's postpaid cards this
year had decreased to Rp 250,000 per user per month from Rp
275,000 per user per month last year.

While the average charge for Satelindo's prepaid card,
Mentari, which was launched in September last year, stands at Rp
70,000 per user per month as of March this year, he said.

Ouwens said unpaid bills were still a relatively small problem
at the company, equaling only 5 percent of the company's total
monthly revenue of some Rp 42.5 billion from its postpaid
service.

"The figure stood at 45 percent in mid-1997 and was at about 6
percent last year," he said.

He said the company was upbeat and expected to see steady
growth in the number of Satelindo customers. Subscribers of
prepaid cards are expected to outnumber postpaid card
subscribers, he added.

"The target is that by the first of January 2000, the number
of prepaid card users will reach 500,000 and the number of
postpaid card subscribers will be 170,000," he said.

Satelindo, which also provide international telecommunications
services, is jointly owned by local company PT Bimagraha, which
holds a 45 percent stake, Deustche Telecom with a 25 percent
stake, state telecommunications company PT Telkom with a 22.5
percent stake and Indosat, which owns a 7.5 percent stake in
Satelindo. (cst)