Telkom, Indosat see gains in election
Rendi A. Witular, The Jakarta Post, Jakarta
PT Telekomunikasi Indonesia (Telkom) and PT Indonesian Satellite Corp. (Indosat), the country's major telecommunications firms, estimate a jump in revenue during this election year due mostly to a sharp increase in the use of cellular services.
Telkom chief executive officer (CEO) Kristiono said on Monday that Telkom was projecting its revenue to grow by at least 20 percent this year, supported mostly by the company's cellular business.
"The general election this year will drive the use of cellular services even higher than in previous years. People will increase their use of cellular phones to inform others about developments during electoral events," said Kristiono.
Kristiono expected the number of the company's cellular subscribers this year to increase by between 40 percent and 50 percent from 9.2 million in 2003.
Revenue from the cellular business, which is run by Telkom subsidiary PT Telekomunikasi Seluler Indonesia (Telkomsel), contributed more than 50 percent of Telkom's total revenue last year, which is estimated to have reached around Rp 23 trillion (US$2.73 billion).
Telkom's cellular business accounted for 54 percent of the total market share last year.
Analysts had earlier said that the telecommunications business, along with the retail and media sectors, would yield hefty earnings this year due to the unorthodox campaign methods employed by political parties here.
They said that party workers would be increasingly reliant on cellular phones to assemble supporters or to inform others about developments during electoral events.
Elsewhere, Indosat, Telkom's archrival in the telecommunications industry, also said that it estimated its revenue for this year would grow by 25 percent, also mostly on the back of higher revenue from its cellular business.
Indosat CEO Widya Purnama said that the company was expecting revenue of Rp 10 trillion this year compared to around Rp 8 trillion last year.
He also said that the number of Indosat cellular subscribers was estimated to surge by 42 percent to 8.5 million from the around 6 million projected for last year.
"We are hoping that election campaign this year will help boost the demand for our cellular services," said Widya.
Recently, Indosat successfully completed a reorganization of its cellular business which resulted in the merger of its two cellular subsidiaries, PT Satelit Palapa Indonesia (Satelindo) and PT Indosat Mobile Multi Media (IM3).
The merger is aimed at helping Indosat to catch up with Telkom in netting cellular subscribers.
To support this objective, the company also plans to spend around $580 million on capital expenditure this year, with a most of the money being used to develop its cellular business.
Satelindo had a market share of 31 percent of the country's cellular market last year.