'Seven operators can meet demand for cellular phones'

JAKARTA (JP): The seven licensed mobile cellular telecommunications operators will be able to meet increasing domestic demand for cellular phones, an executive said yesterday.

Julius S. Djohan, the president of PT Excelcomindo Pratama, a digital Global System for Mobile (GSM) communications operator, told The Jakarta Post that the seven providers were not operating at capacity.

"They will be able to serve up to 2.5 million users by 2003 when Indonesia has a population of about 210 million," he said, adding that the figure would represent 4.2 percent market penetration.

He said penetration was now only 0.25 percent.

"It will be good for business even if the figure only reaches 1.2 percent by 2003," he said.

The seven companies operating cellular mobile telecommunications in Indonesia apply three different systems.

The GSM system, the most recent domestically introduced system, is operated by PT Telkomsel, PT Satelindo and PT Excelcomindo. The Advanced Mobile Phone Service (AMPS) -- an earlier analog system -- is operated by PT Metrosel Nusantara, PT Telekomindo and PT Komselindo. The third system is the Nordic Mobile Telephone, an analog service primarily installed in vehicles, which is run by PT Mobisel.

The seven operators have attracted about 550,000 subscribers throughout the country. About 380,000 of them are GSM users.

"Technically, the seven operators will also be able to serve a much larger number of users by 2003," Djohan said.

The government is expected to announce an open tender soon to choose PCN operators.

PCN is the next generation of the digital wireless telephone systems which uses a light, inexpensive handset with long battery life to communicate via a low-power antenna. The system includes the Personal Communications System and the Digital Cordless System from Europe, the Personal Handy-phone Service developed by Japan and Code Division Multiple Access technology from the United States.

Djohan said Excelcomindo, which is investing US$350 million in its GSM network between 1996 and 1997, had about 6,000 users.

"We now operate in Jakarta, Bandung (West Java) and Surabaya (East Java). Next year we will enter Bali, Lombok, Yogyakarta, North Sumatra and Central Java," he said.

Excelcomindo, which launched its cellular services in October, will invest another $300 million between 1998 and 2000 to expand its GSM networks across the country, he said.

The company is a joint-venture of Nynex Corp. of the United States and PT Telekomindo Prima Bhakti. Telekomindo is owned by PT Rajawali Wira Bhakti Utama, a subsidiary of the Rajawali Group, controlled by businessman Peter Sondakh. State-owned PT Telkom has a minor stake in Telekomindo, which runs an Advanced Mobile Phone System.

Other Excelcomindo shareholders include Japanese trading firm Mitsui, the Asian Infrastructure Fund and several local investors, including PT Santana Telekomindo, Yayasan Kartika Eka Paksi and Yayasan Tridaya.

Excelcomindo, set up in 1995, competes against PT Satelindo and PT Telkomsel, the two maturer GSM operators.

He estimated the cellular market in Indonesia would grow at least 50 percent to 850,000 users in 1997: "The market is still very young." (icn)