Telkom awards Ericsson with broadband contract

Leony Aurora, The Jakarta Post, Jakarta

Indonesia's largest telecommunications company PT Telkom has awarded Ericsson a contract to provide broadband technology and related services to its customers in Surabaya, East Java.

The Swedish-based company will provide an ethernet digital subscriber line access solution, which is able to deliver data, voice and video simultaneously to customers.

"There is already a very small number of lines -- lower than 1,000 -- available in Surabaya," PT Ericsson Indonesia president Mitch Lewis told The Jakarta Post on Wednesday.

He declined to disclose the value of the contract.

Telkom launched its broadband service, called Speedy, in July and is aiming to provide 40,000 connections in Jakarta, and 10,000 in Surabaya in the first phase of the project. It has allocated US$15 million for the service's infrastructure, or between $290 and $300 per line.

Speedy uses customers' fixed telephone network which has been upgraded to a high-speed digital one. The download speed is between 384 kilobytes per second (kbps) and 512 kbps, much higher than the dial-up system used mostly across the country, which is 56 kbps.

Speedy customers can also use the telephone simultaneously with Internet without the two services interfering with one another.

"There'll be some promotions of Speedy in schools and universities (in Surabaya) in the coming months," said Lewis.

Telkom plans to convert its network's infrastructure broadband capacity gradually to reach 2 million lines by 2008.

According to Telkom's unaudited third quarter report, as of Sept. 30, there are already 11,832 broadband lines available and 54 percent of them, or 6,389 connections, have been sold.

Telkom is a publicly listed company based in Bandung. It reported a 14 percent surge in net profit during the first nine months of this year to Rp 5.02 trillion ($557 million) from Rp 4.41 trillion in the same period last year.

Analysts believe it was due to the result of higher revenue booked by the company from its cellular -- PT Telkomsel -- and fixed-line businesses.