Three cellular operators seek DCS-1800 licenses

JAKARTA (JP): Indonesia's three cellular telephone network operators are seeking licenses to operate on the DCS-1800 network following the issuance of similar permits having been granted to telecommunications companies PT Telkom and PT Indosat last year, an expert said.

Vice chairman of the Indonesian Cellular Telephone Association (ATSI), Rudiantara, said on Thursday that the association, on behalf of the GSM-900 operators, had sent a letter to the Minister of Transportation and Telecommunications last year inquiring about the possibility of providing mobile telephone services under the DCS-1800 network.

"Pak Agum replied then that the permits would be allocated to us," Rudiantara said during a media conference here.

The three GSM-900 operators include: PT Telkomsel, with its Kartu Halo and Simpati subscriber identity module (SIM) cards; PT Satelit Palapa Indonesia, with its Satelindo GSM and Mentari SIM- cards; and PT Excelcomindo Pratama, with its proXL SIM-card.

Rudiantara, who is also the director of PT Excelcomindo Pratama, said that existing operators were in need of the permits, especially in order to increase its customer capacity and the quality of its services in highly populated areas like Greater Jakarta.

Activity on the GSM-900 network has been overcrowded due to a continued increase in the number of customers using the services.

Rudiantara said that, out of the 75 megahertz of frequency available on the DCS-1800 network, there are still 20 megahertz remaining which could be distributed among the three operators.

"For Excel, about 10 megahertz would be enough for us to expand our network," he said.

Previously, the government granted Telkom and Indosat 15 megahertz each, 20 megahertz was distributed among seven regional operators, and five megahertz was reserved as a guardband against frequency interference, Rudiantara said.

The seven regional operators, which have been given licenses to operate on the DCS-1800 are Astratel on the island of Sumatra, AW in West Java, Inti in Jakarta, Mitra in Central Java, Natrindo in East Java, Primarindo on Kalimantan, and Kodel on Bali and Sulawesi, he said.

"But they have not yet commenced their operations, and I don't know when they will actually start operating," he added.

Rudiantara said that companies immediately operating on the DCS-1800 would have a difficult time competing with existing operators.

He said that new operators would have to work hard to find an angle which could lure customers to use their services.

"That's why Telkom and Indosat are heavily promoting their value added services like wireless application protocol (WAP), and high speed data transmission (GPRS)," Rudiantara said.

"On the other hand, the Indonesian cellular market is still largely a voice market, not a data market," he added.

He explained that less than 10,000 people in Indonesia, out of three million customers in total, are known to subscribe to WAP providers.

"Maybe in the technological sense they are ahead, but in terms of business is it visible? Because the fact is that we are a business entity," Rudiantara said.

He cited experiences from other countries, saying that the most successful cellular operators were those that operate on both the GSM-900 and DCS-1800 networks, such as Singapore's SingTel.

Rudiantara said that, this would mean in order to succeed, DCS-1800 operators would need the support of existing operators to survive.

The number of cellular users subscribing to the seven existing operators in the country are expected to increase by 3.4 million this year, 80 percent of which are expected to be pre-paid customers, Rudiantara explained, compared to the 3.05 million new customers last year.

"This means that the composition of pre-paid customers against post-paying customers increased to a little above 70 percent last year, from 65 percent in 1999," Rudiantara said.

Aside from the three GSM-900 operators, four other cellular operators are Telesera, Metrosel, and Komselindo, which operate under the advanced mobile phone system (AMPS), and Mobisel under Nordic mobile telephones (NMT).

Last year the seven operators generated some Rp 7 trillion in operating revenue, a figure which is expected to increase to more than Rp 10 trillion this year, Rudiantara said.

The entrance of new operators in 2001 will increase the network capacity by 1.5 million lines, compared to an increase of 1.3 million in 2000.

He said that the investment for expansion projects was expected to grow to US$900 million this year, up from a investment estimated at being between $700 million to $800 million last year. (tnt)