Satelindo's $835m service investment

Satelindo's $835m service investment

PARIS (JP): PT Satelindo, one of the country's seven mobile
phone operators, has pledged to invest at least US$835 million to
improve its services.

The company's director of cellular operations, Saleh Gunawan,
said here yesterday about $635 million would be spent on the
expansion of its global system for mobile communications (GSM)
networks in Java.

The other $200 million would finance the expansion of GSM
networks outside Java, he said.

France's Alcatel supplies Satelindo's networks in Java and
Germany's Siemens its networks in other areas.

Saleh was here for the signing ceremony between Satelindo and
its two major French partners, Paribas and Alcatel.

Satelindo which runs GSM and satellite and international
telecommunications services, has secured a $135.89 million loan
from French Paribas. The loan was backed by the French Export
Credit Agency, COFACE.

Satelindo's managing director of finance, Hessel Fransen, said
the credit agreement was signed on Feb. 13.

The signing of additional documentation was done yesterday by
Satelindo's president, Iwa Sewaka, and Paribas's board of
management chairman, Andre Levy-lang.

Fransen said the loan was to finance a $152 million Alcatel-
supplied expansion project. "The equipment for the $152 million
expansion project has been 60 percent delivered."

Iwa also signed a $225 million contract extension with
Alcatel, making its orders from the French telecommunications
equipment maker worth $635 million since 1993.

Alcatel will start supply equipment for the new contract in
April or May.

Fransen said Satelindo had several ways to raise the money to
pay for the new contract. "We may issue bonds or use other export
bank credit. Another possibility is the planned initial public
offering scheduled for next year."

Saleh said Satelindo would have 450,000 GSM lines just in Java
by August.

"Our backbone microwave network will reach 155 megabytes
offering synchronous digital hierarchy (SDH) technology," he
said.

Satelindo would operate 1,000 base transceiver stations in
Java, he said.

"Our investment in Java will reach up to $1 billion within
the next few years," he said.

The other cellular operators in Indonesia are PT Telkomsel and
PT Excelcomindo Pratama which run GSM. PT Telekomindo, PT
Metrosel and PT Komselindo run the Advanced Mobile Phone System,
while PT Mobisel runs the Nordic Mobile Telephone system.

Saleh said Satelindo's GSM network would cover all of Java.

He said Satelindo had signed roaming agreements with several
GSM operators in 25 nations, giving its users international
access.

"We will start roaming services in China and Saudi Arabia
later this month," he said.

Satelindo has 210,000 GSM users and relies on its microwave
network, the Palapa-C transponder satellite, submarine cables and
fiber optic backbones.

Saleh said the GSM service contributed Rp 360 billion or 60
percent of Satelindo's total revenue last year. "This year
revenue from cellular operations is estimated to reach Rp 700
billion," he said. (icn)