Telkomsel budgets Rp 1.5t to improve transmission

JAKARTA (JP): PT Telkom's subsidiary mobile phone service operator PT Telkomsel will invest up to Rp 1.5 trillion (about US$207 million) this year in a bid to improve its service and transmission capacity, a company executive has said.

Telkomsel director of commerce Hasnul Suhaimi said on Monday most of the funds would be used to build 400 base transmission stations across the country to increase phone line capacity.

"With 400 new base transmission stations and other facilities, we will be able to absorb up to 630,000 new subscribers this year," he said.

He declined to reveal the source of the investment, but said the money would be derived from the company's own budget as well as loans from several other companies.

Hasnul said the company developed only about 150 base transmission stations last year due to financial problems stemming from the country's worst ever financial crisis.

The crisis, triggered by the sharp drop in the value of the rupiah against the U.S. dollar in late 1997, has affected almost all business sectors in the country.

He said Telkomsel currently has 1.05 million subscribers of both the company's regular and prepaid billing services, the Halo and simPATI cards.

Subscribers of Telkomsel's prepaid billing service simPATI accounted for 55 percent, or about 600,000, of the company's total customers, he said.

He predicted that the company would sell more of the prepaid products this year because the product appealed more to customers with its subscription-free and flexible pulse usage.

"We predict the customers of our prepaid product will grow to over 70 percent of our total subscribers by the end of the year," he said.

Telkomsel extended service to 533,000 new customers in 1999, some 425,000 of which were of the prepaid billing product and 108,000 of the regular postpaid billing product, he said.

Telkomsel, one of seven cellular phone operators in the country, sells between 40,000 and 45,000 Halo and SimPati cards each day.

Telkomsel entered an agreement with state-owned postal service company PT Pos Indonesia on Monday to make the latter an authorized dealer for Telkomsel's prepaid product simPATI.

Hasnul predicted that PT Pos Indonesia, through its offices in big cities across the country, would be able to contribute roughly 10 percent of Telkomsel's total product sales.

Telkomsel is controlled by state-owned PT Telkom with 42.72 percent, state-owned international direct dial operator PT Indosat 35 percent, the Netherlands' PT Telecom BV 17.28 percent and a private firm owned by local entrepreneur Setiawan Djody, Setdco Megaset Asia, which has 5 percent. (cst)