Satelindo to expand network in Kalimantan, Sulawesi

Rendi A. Witular The Jakarta Post Jakarta

Cellular operator PT Satelit Palapa Indonesia (Satelindo) plans to invest some US$250 million this year to develop the cellular infrastructure in Kalimantan and Sulawesi, a senior company official said on Wednesday.

Satelindo's executive vice president for business development, Noor S.D.K. Devi, said it was hoped the development program would enable the company to achieve its target of three million customers this year, from the current 1.8 million.

"The enhancement in network coverage, capacity and features is aimed at reaching this year's target of three million customers. One of the new features is the Mentari Instant Top-Up, a mobile commerce facility that is the first in the Indonesian market," Noor said.

Satelindo is the country's second largest cellular operator after PT Telkomsel. The company is 75 percent owned by state- owned telecommunications firm PT Indosat, with the remaining 25 percent stake held by Germany's Deutsche Telekom. But Indosat is currently in final negotiations with Deutsche Telekom to purchase its 25 percent stake.

Indosat said earlier this week that it would inject about $75 million into Satelindo in July to help finance its expansion program.

Under an agreement with creditors, Satelindo's investment spending is limited at about $50 million, analysts have said.

Noor did not say where the remaining money for the expansion program would come from.

Satelindo recently abandoned plans for an initial public offering sometime this year to raise cash. The plan was canceled in order to maintain investor interest in Indosat shares, to be sold by the government in two stages in June and October.

In a related development, PT Indosat Mega Media (IMM), a multimedia division of Indosat, said it would invest about $20 million to expand its network's coverage.

Company president Brata Hardjosubroto said IMM planned to set up an Internet Protocol (IP) backbone infrastructure to expand its Internet and multimedia networks in 27 spots around the country, including in Medan, Batam, Palembang, Bogor, Bandung, Yogyakarta, Denpasar, Balikpapan, Makassar and Manado.

The backbone infrastructure is expected to be completed in 2003.

"The backbone, which will bring with it broadband technology, will not only be used by our partner, but also by other companies under the Indosat umbrella. The backbone will also enable us to becoming a world-class operator," said Brata.

IMM is also set to plunge into the cable TV business under the name IGLOtv, which will offer more than 50 channels using the Hybrid Fiber Coax connection technology.