[ppi] [ppiindia] Mobile boom in Indonesia

** Mailing List|Milis Nasional Indonesia PPI-India **
** Situs resmi: http://www.ppi-india.org **
** Situs milis: http://groups.yahoo.com/group/ppiindia **
** Situs Beasiswa: http://informasi-beasiswa.blogspot.com 
**http://www.atimes.com/atimes/Southeast_Asia/GG28Ae02.html

Mobile boom in Indonesia
By Bill Guerin 


JAKARTA - The smiles and handshakes all round at the Indonesian Cellular 
Telecommunications Association's (ATSI) "Indonesia 2005 Cellular Show" last 
week are hardly surprising. Although less than 20% of the country's 238 million 
people have landline phone access, mobile phone operators are enjoying surging 
profits in a lucrative market that is enjoying scorching growth. Around this 
time last year, there were 32 million cellular phone subscribers. Figures 
released a month ago showed this had jumped to 40 million, with ATSI secretary 
general Rudiantara predicting that if the growth continued, total subscribers 
could reach more than 80 million next year. 

After many years as a protected and monopolized sector with two 
infrastructure-based operators - Telkom and Indosat - to service domestic and 
international markets respectively, fixed and mobile markets have been 
liberalized, and an independent regulator set up. The Indonesian mobile market 
is growing fast with compound annual growth over the last six years exceeding 
70%. Yet the country still has one of the lowest penetration rates in the 
region, giving room for almost unlimited growth. Along with the Philippines, 
Malaysia and India, it is one of the major developing markets in the 
Asia-Pacific region. The Philippines, with a population of 86 million, has over 
32 million mobile subscribers. Malaysia has 14.6 million subscribers out of a 
population of 25 million. India has a population of 1.1 billion, yet has only 
53 million mobile subscribers. 

Conversely, Taiwan, Hong Kong, South Korea and Singapore are the region's most 
mature markets. Data from APRG Research indicates Taiwan has an estimated 25.1 
million subscribers, representing a saturated 100% penetration rate. In Hong 
Kong, the number of subscribers is 8.1 million and growing fast, although the 
population is only 6.8 million (some customers evidently have multiple phones 
with different providers). South Korea, with a population of 48 million, has a 
subscriber base of 37 million mobile phone users. Singapore has 3.9 million 
subscribers and a penetration rate of 91%. 

Three dominant players
Operators are plowing profits back into extending their networks. ATSI has 
estimated that combined revenues of cellular operators this year will reach 
Rp30 trillion (US$3 billion), 25% higher than the Rp24 trillion booked last 
year. Telkom is the country's largest listed company, and its $11 billion 
capitalization equates to almost 15% of the market capitalization in the 
Jakarta Stock Exchange. It has the lion's share of the market through its 
cellular unit, PT Telekomunikasi Selular, or Telkomsel. With a subscriber base 
of around 22 million it enjoys a 55% share. Revenues from SMS and other mobile 
data services were Rp3.62 trillion last year, representing around 25% of the 
company's Rp14.77 trillion net operating revenue. It is majority owned by 
Telkom with a 65% stake. Singapore Telecom (SingTel) holds the rest. 

This year Telkomsel plans to spend $700 million expanding its network by 
building 3,000 new base transceiver stations to supplement its current total of 
7,000 units. Telkomsel's nearest competitor is publicly listed Indosat, the 
country's second largest telecommunications company. It is 41.94% owned by 
Singapore Technologies Telemedia Pte Ltd (STT), 15% by the government and the 
remainder by the public. Indosat has three brands - IM3, Matrix and Mentari - 
and 13 million subscribers. In the first quarter, it wooed 434,000 new 
subscribers but in April they could hardly sign up fast enough - more than 
600,000 of them. Indosat also plans to invest $900 million this year. Most of 
it will go to expanding its cellular network to reach out to over 400 regions 
of the country through 2,000 additional base transmission stations. 

PT Excelcomindo Pratama (Excelcomindo), the third largest operator, has 4.5 
million subscribers for its XL brand. Excelcomindo is 27.3% owned by Malaysia' 
state-owned Telekom Malaysia Bhd (TM), which last week announced plans for 
initial public offering on the local bourse in September. Commerce 
International Merchant Bankers Bhd and Credit Suisse First Boston are 
organizing the IPO, expected to raise around $300 million. TM paid $265.7 
million for a 23.1% stake in Excelcomindo last year and later raised this to 
27.3% after paying another $48 million. It already has management control over 
the company and is committed to increasing its stake to between 67.3% and 80% 
by the end of October. 

The operator has 2,100 base transmission stations covering the main islands of 
Java, Sumatra, Kalimantan, Sulawesi and Bali, and at the end of 2004 had 
approximately a 12% market share. Excelcomindo's president/director Rudiantara 
says the company may spend up to $400 million this year, double the amount it 
invested last year, to boost capacity and expand coverage. The company plans to 
tap the US dollar bond market to finance the expansion. 

Excelcomindo, however, remains vulnerable to the risk of local currency 
depreciation, as its borrowings and capital expenditure commitments are largest 
in US dollars while its revenues are mainly in rupiah. When affirming its B+ 
rating on Excelcomindo, Standard & Poor's Ratings noted the credit quality was 
enhanced by the prospect of ultimate majority ownership by Telekom Malaysia. 

Going for 3G
Third generation communications (3G) technology has high bandwidth and high 
capacity. Using 3G, cellular operators can provide multimedia facilities at 
faster speeds and with much more data than the current 2.5G cellular technology 
used in Indonesia. Using 3G technology, users can make video calls, enjoy video 
and audio streaming and even watch TV programs on their cellular phones. The 
introduction of 3G services is expected to bring substantial economic and 
social benefits to Indonesia. 

Malaysians already have 3G through TM's subsidiary Celcom 3G and Maxis 
Communications Berhad. In Indonesia, there are currently only five operators 
with government licenses to operate cellular services based on 3G technology: 
Cyber Access Communication with 15 MHz, Natrindo Telepon Seluler with 10 MHz, 
Wireless Indonesia with 5 MHz, Telkom Flexi with 5 MHz and Indosat StarOne with 
5 MHz. This leaves 20 MHz of 3G frequencies to be allocated. 

Telkomsel is conducting 3G technology trials through existing networks 
supported by WCDMA (wide-band code-division multiple access) technology 
provided by three mobile phone manufacturers: Ericsson, Siemens and Nokia. 
Indosat is also setting up a trial. The government plans to rearrange the 
3G-frequency allocation in a Rp5 trillion tender for bandwidth slots following 
requests for bandwidth from Telkomsel and Indosat, who have complained that 
companies that have secured spectrums have failed to show progress. For 
example, PT Cyber Access Communications and PT Natrindo Telepon Seluler (Lippo 
Telecom) were granted 3G-licenses and allocated frequency spectrums two years 
ago but they have yet to operate the technology. Several parties were 
reportedly lobbying the government to cancel the licenses issued to the two 
operators. In February, Maxis paid $100 million for 51% of Lippo Telecom. 

In March, Hong Kong's Hutchison Telecom bought a 60% interest in Cyber Access. 
Cyber Access holds licenses for nationwide operations of 2G and 3G mobile 
services in Indonesia, but it currently doesn't provide mobile services. 
Hutchinson reportedly paid Charoen Pokphand Group Indonesia - a Thai 
telecommunications group - $120 million for the stake. CP Group will hold the 
remaining 40% interest in Cyber Access. However, Information and 
Telecommunications Minister Sofyan Jalil was quoted as saying that Cyber Access 
had acted as a mere "license broker" and that the government would revoke the 
company's license to operate 3G mobile services if the sale violates 
regulations. 

The much smaller carrier, PT Mobile-8 Telecom, was actually the first to roll 
out CDMA2000 services to wireless subscribers. Mobile-8 Telcom was granted a 
license to provide cellular telephone services to existing operators, 
Komselindo and Metrosel, who were using analog technology (Advance Mobile Phone 
System - AMPS). In line with the rapid development of telecommunications 
technology in the country, the analog system has been gradually phased out. 
Both Komselindo and Metrosel still hold their existing cellular providers' 
licenses but Mobile-8, working with South Korea's Samsung Electronics, launched 
a CDMA2000 network last year that can accommodate more than 1.9 million 
subscribers. 

"As Asia continues to lead the globe in offering 3G networks, Indonesian 
subscribers will now join the technology-savvy consumers in the region that is 
already enjoying the advanced features that can only be offered by CDMA2000 
technology," said Perry LaForge, executive director of the CDG at the launch. 
CDMA2000 dominates 3G with more than 65 million subscribers, or 99% of the 
global 3G market. There are 80 commercial CDMA2000 networks globally and 
another nine will be deployed this year in Asia, Australia, Africa, Europe and 
the Americas. 

A winning line for Indonesia
Under Indonesian law, foreign investors may buy 100% of companies in 
telecommunications, and many other strategic sectors of the economy. The 
presence of Malaysian and Singaporean big hitters in Indonesia, and their 
long-term commitment to improved services, will keep Indonesia on track in the 
most dynamic and fastest growing regional markets in the telecommunications 
industry. Cellular connections in the Asia-Pacific region and Japan rose from 
667.7 million in the fourth quarter of 2004 to 698 million in the first quarter 
of 2005, a 4.5% increase. Japan has the highest percentage of wireless Internet 
penetration (87%), followed by South Korea (66%). 

The presence of foreign entities will help the government to provide 
telecommunications and Internet access for the entire community, even those 
remote villages that currently have no access to telephones. The formidable 
costs of extending the country's fixed-line network and extending mobile 
networks to areas without infrastructure are a major challenge, however, and 
one made more acute by the dispersed geographical character of the Indonesian 
archipelago. 

More than 40,000 villages are still without telephone services, but President 
Susilo Bambang Yudhoyono has recently signed a non-tax regulation obliging all 
telephone operators to contribute 0.75% of annual gross revenues for the 
state's rural telephone program - or Universal Service Obligation (USO). This 
equates to a considerable sum. Telkom, for example, recorded gross sales of 
Rp33.95 trillion in 2004 and Indosat booked revenues of Rp10.55 trillion the 
same year. Implementation of the regulation is expected to raise more than 
Rp400 billion this year, nine times greater than the annual allocation made by 
the government over the past two years. 

Developing the telecommunications infrastructure in rural areas will also be 
good for the economy. "Studies have shown an 1% increase in the 
telecommunications penetration rate will result in up to a 3% rise in the 
country's economic growth," says Director General of Post and 
Telecommunications, Djamhari Sirait. 

Bill Guerin, a Jakarta correspondent for Asia Times Online since 2000, has 
worked in Indonesia for 20 years as a journalist. He has been published by the 
BBC on East Timor and specializes in business/economic and political analysis 
in Indonesia. 

(Copyright 2005 Asia Times Online Ltd. All rights reserved. Please contact us 
for information on sales, syndication and republishing.)



[Non-text portions of this message have been removed]



------------------------ Yahoo! Groups Sponsor --------------------~--> 
<font face=arial size=-1><a 
href="http://us.ard.yahoo.com/SIG=12h1tonbr/M=323294.6903899.7846637.3022212/D=groups/S=1705329729:TM/Y=YAHOO/EXP=1122846475/A=2896125/R=0/SIG=11llkm9tk/*http://www.donorschoose.org/index.php?lc=yahooemail";>Take
 a look at donorschoose.org, an excellent charitable web site for anyone who 
cares about public education</a>!</font>
--------------------------------------------------------------------~-> 

***************************************************************************
Berdikusi dg Santun & Elegan, dg Semangat Persahabatan. Menuju Indonesia yg 
Lebih Baik, in Commonality & Shared Destiny. http://www.ppi-india.org
***************************************************************************
__________________________________________________________________________
Mohon Perhatian:

1. Harap tdk. memposting/reply yg menyinggung SARA (kecuali sbg otokritik)
2. Pesan yg akan direply harap dihapus, kecuali yg akan dikomentari.
3. Reading only, http://dear.to/ppi 
4. Satu email perhari: ppiindia-digest@xxxxxxxxxxxxxxx
5. No-email/web only: ppiindia-nomail@xxxxxxxxxxxxxxx
6. kembali menerima email: ppiindia-normal@xxxxxxxxxxxxxxx
 
Yahoo! Groups Links

<*> To visit your group on the web, go to:
    http://groups.yahoo.com/group/ppiindia/

<*> To unsubscribe from this group, send an email to:
    ppiindia-unsubscribe@xxxxxxxxxxxxxxx

<*> Your use of Yahoo! Groups is subject to:
    http://docs.yahoo.com/info/terms/
 



--------------------------------------------------------------------------
Bagi Anda yang ingin berdiskusi tentang apa saja dg akrab, santai tapi serius 
dan penuh persahabatan dg seluruh masyarakat/mahasiswa Indonesia di luar negeri 
serta tokoh-tokoh intelektual dan pejabat Tanah Air, silahkan bergabung dg 
milis ppiindia@xxxxxxxxxxxxxxxx Kirim email kosong ke: 
ppiindia-subscribe@xxxxxxxxxxxxxxx atau kunjungi 
Situs resmi: http://www.ppi-india.org ; 
Situs milis: http://groups.yahoo.com/group/ppiindia ; 
Situs beasiswa/scholarship: http://informasi-beasiswa.blogspot.com
--------------------------------------------------------------------------

Other related posts: