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)