Three cellular operators seek DCS-1800 licenses

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)