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.