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Thu, 23 Oct 2003

JP/Telkom to invest $250m in CDMA next year

Telkom to invest $250m in CDMA next year

Rendi A Witular, The Jakarta Post, Jakarta

State-owned telecommunications firm PT Telekomunikasi Indonesia plans to invest at least US$250 million next year in a bid to boost network coverage and the customer base of its newly- launched fixed-wireless service, TelkomFlexi.

Telkom's president Kristiono said that next year the company would allocate at least $500 million for capital expenditure with 50 percent of this being used to expand TelkomFlexi's network and service.

"We plan to concentrate on TelkomFlexi next year with the target of netting at least 1.2 million users. That is why we need to put most of our resources into these products," said Kristiono on a sidelines of a seminar on Wednesday.

He explained that the planned capital expenditure would be entirely drawn from the company's own resources.

TelkomFlexi is a fixed-wireless service using the latest technology, Code Division Multiple Access (CDMA).

By using the service, customers can carry their fixed-line phones outside their homes as long as they are still within reach of a base transreceiver station (BTS). One station has a radius of more or less five kilometers.

For the time being the service, which is being used thus far by 385,000 customers, only covers parts of Greater Jakarta, but next year Telkom plans to expand it to 41 cities.

Regarding the re-auditing of Telkom's 2002 financial report, Kristiono said that he could not guarantee that it could be concluded by the end of this month as initially planned.

"We will maximize our use of the time we have in this month, but I just cannot give the definite time of completion," he said.

Telkom, which is listed on the Jakarta Stock Exchange and the New York Stock Exchange (NYSE), was forced by the U.S. Securities and Exchange Commission to re-audit its 2002 financial report after some inadequacies were found.

The SEC initially gave Telkom until September to resubmit the audited 2002 financial report.

However, Telkom was unable to meet the deadline and asked for another month to complete the work. But, as Kristiono indicated on Wednesday, Telkom could fail again to meet the deadline.