Telekomunikasi Selular to Spend $850 Million to Expand Network
Telekomunikasi Selular to Spend $850 Million to Expand Network
Andrea Tan, Bloomberg/Singapore
PT Telekomunikasi Selular, Indonesia's biggest mobile-phone
operator, said it plans to spend US$850 million, 21 percent
higher than its earlier estimate, to expand its network and add
new customers as competition steps up.
The company known as Telkomsel is expanding outside the main
island of Java, where mobile usage is low, to lure new users. The
Jakarta-based company, which offers stored-value cards and the
option of monthly bills, has trimmed prices and sold cheaper
cards to first-time users to gain more customers in a country
where half of the 238 million people live on less than $2 a day.
Telkomsel has to battle new entrants such as Hutchison
Telecommunications International Ltd., Telekom Malaysia Bhd. and
Maxis Communications Bhd., which have invested in Indonesia's
mobile-phone market. Eight companies including Hutchison's PT
Cyber Access Telecommunications and Maxis' Lippo Telecom are
vying for a share in a market where fewer than one in five of the
population owns a cell-phone.
"The competition will get more competitive," President
Director Kiskenda Suriahardja said in a phone interview late
yesterday. "But network roll-out and coverage is very important
to cellular users and we're doing that aggressively."
Telkomsel expects to surpass its goal of 25 million users this
year by 10 percent and to grow 30 percent next year even as
competition increases, said Suriahardja, who joined Telkomsel in
March. Telkomsel had 16 million users last year, 67 percent more
than the previous year.
Indonesia's cell-phone users will rise to 45 million by the
end of the year, according to the association of Indonesian
cellular operators.
Telkomsel controls more than half of Indonesia's cell-phone
market. PT Indosat, Indonesia's second-largest phone company, has
about one-third and PT Excelcomindo Pratama has about 11 percent,
Suriahardja said.
"We won't have to cut prices more" to attract users,
Suriahardja said. "Indosat's more aggressive now and has the same
strategy as us but we were here first."
PT Telekomunikasi Indonesia, the nation's biggest phone
company, owns 65 percent of Telkomsel. Singapore
Telecommunications Ltd., Southeast Asia's largest phone company,
holds the rest.