Telkom plans to invest $1 billion in major project expansion

JAKARTA (JP): State telecommunications company PT Telkom says it will invest US$1 billion to further develop its telephone line business and to expand into mobile phone, cable TV and the Internet service businesses in two years.

"We shall not only focus on the existing telephone line business, we will also expand into other related businesses," company director of planning and technology Kristiono told reporters after a ceremony to launch the company's online transaction security product on Tuesday.

He said the company would raise the $1 billion from its own cash flow and potential partners.

He said some $275 million would be used to build 10,000- kilometer fiber optic infrastructure in Java, Sumatra and Sulawesi with high-speed connection capacity of up to 10 gigabytes per second.

"Jakarta and Surabaya, East Java, will also be connected with the high-speed network," he said.

Telkom has appointed Fujitsu Ltd., PT Alcatel Indonesia, PT Siemens Indonesia, Pirelli, NEC Corp. and Lucent Technologies to construct the facility, he said.

The company has also allocated $210 million for this year and next year to develop its cellular phone service, called Mobile TELKOM, using the Global System for Mobile Communications at a 1800 megahertz capacity, he said.

"We aim to net 600,000 customers in 2001 to 2002 and we will try to increase the number to one million in 2004," he said.

In August 2000, PT Siemens Indonesia won the bid to build the infrastructure of Telkom cellular service, beating big names like Motorola, Ericsson, Nokia, Siemens, Lucent and Alcatel.

Kristiono said Telkom would invest another $60 million between 2001 and 2002 to improve the quality of its telephone copper cable into high-speed access or broadband quality with a capacity of more than one megabyte per second to support its planned cable TV and Internet broadband businesses.

Telkom has appointed PT Siemens Indonesia, PT Ericsson Indonesia, PT Lucent Technologies and PT Alcatel Indonesia to upgrade the infrastructure, he said.

Another project is an international project to build undersea fiber optic infrastructure with a capacity of seven terabytes per second, connecting cities in the Asia-Pacific region.

He said Telkom would put $30 million in the project, but he did not specify the total amount of investment or the names of other investors in the project.

"The infrastructure will come into operation by the end of 2002," he added.

Another $30 million will be spent to develop a call center, customer care and billing system.

The project of developing voice over Internet Protocol (VoIP) service, which enables users to make long distance calls or fax data through the Internet at local charges, will likely cost Telkom $10 million, Kristiono said.

Telkom will operate the service in 19 cities in Indonesia, and nine cities overseas, he said.

Telkom service launched on Tuesday the "i-trust" software for e-commerce protection. The software was developed by Telkom and local firm PT Bumi Kita Makmur.

Indra M. Utoyo, project director of Telkom B2B commerce, said Telkom invested $3 million to development the software, which targets both public and corporate users.

The software functions to protect e-commerce activities from hackers, he explained.

He said the software met international standards and that Telkom would seek international recognition of the reliability of the i-trust software. (05)