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Indonesia's Major Telecom Companies Predict Fast Growth

Posted on: Wednesday, 27 July 2005, 09:00 CDT

Indonesia's major telecom companies predict fast growth

JAKARTA, July 26 (Xinhua) -- Indonesia's two largest telecommunications companies, PT Telkom and PT Indosat, projected that telecommunications revenue will see a twofold increase in 2010, executives with the companies have said.

Telkom President Arwin Rasjid was quoted Tuesday by The Jakarta Post as saying that over the next five years, revenues in the telecommunications industry would range between 141 trillion rupiah (14.4 billion US dollars) and 181 trillion rupiah (18.5 billion dollars), from last year's revenue of 48 trillion rupiah ( 4.9 billion dollars).

"This excludes revenue in the handsets business, which records sales of 10 million units per annum," he said.

Arwin said that by 2010, fixed-line subscribers would almost double from that of 2004, while mobile phone subscribers and Internet users would triple.

At present, there are about 9 million fixed-line subscribers or about 4.8 percent of the population, while cellular subscribers total 35 million or 14 percent, and Internet users total 16 million or about 7.4 percent of the population.

His projection was based on the rapid growth shown in the cellular industry.

"Only within 12 years, the number of cellular subscribers has reached 35 million, the most rapidly growing market in Southeast Asia," he said.

However, cellular market penetration here remains low compared to the Indonesia's neighbor Malaysia, which has penetration of 19 percent in fixed lines, 63 percent in cellular phones and 48 percent for Internet users out of its 23 million population.

Meanwhile, Indosat president Hasnul Suhaimi said the rapid growth started after the prepaid system was first introduced in 1998, boosting the number of cell phone subscribers by 73.5 percent last year.

"The growth was also influenced by cheap handsets and competitive prices offered by cellular operators," he said.

But the two firms' top officials agreed that Indonesia's market penetration remained low even in the Southeast Asia region, thus needed to be boosted.

Talking about Indonesia's geography that presented a big challenge for telecommunications companies to develop their infrastructure, Arwin said: "As of last month, our division in the eastern part of Indonesia could only cover 29 percent of regencies and 9 percent of villages in the whole of the island of Papua."

He hoped that fixed-line market penetration would be improved through the implementation of the Universal Service Obligation ( USO), which is aimed at providing basic telecommunications services to villages.

A report from the Ministry of Telecommunications and Information says there are 38,837 villages nationwide that have yet to receive basic telecommunications services.

Therefore, the ministry has issued Government Regulation No.28/ 2005, obligating telecommunications operators to contribute 0.75 percent of their annual revenues to USO.

Source: Xinhua News Agency - CEIS

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