Oblivious to the economic woes blighting their country and the wider malaise of the telecoms industry in general, Indonesia’s wireless operators continued to expand their networks apace in 2002, reporting strong subscriber growth and predicting even greater things for 2003. Spearheading the charge is PT Telekomunikasi Selular (Telkomsel), 65% owned by national PTO PT Telkom and SingTel Mobile (35%). Telkomsel reported 6,010,772 subscribers as at 31 December up from 3.25 million a year earlier, 85% of which were pre-paid users. The 85% year-on-year subscriber growth followed a rise of 92.9% in the twelve months to end-2001 as Indonesians flocked to take advantage of widely available pre-paid mobile services in a country which is saddled with a relatively poor PSTN. Indeed, Telkomsel’s net additions in 2002 comprised 2.76 million pre-paid sign-ups compared with just 57,794 post-paid kartuHALO users. The cellco’s strong performance was mirrored by PT Indosat’s mobile arm PT Satelindo which reported 2.9 million users at the end of 2002, up from 1.8 million previously. Meanwhile the country’s third operator PT Exelcomindo reported around two million customers – up from 1.09 million – and Satelindo’s sister company PT IM3 came in fourth with 500,000.
Overall the Indonesian cellular market grew by an impressive around 60% in 2002 to more than eleven million users but, despite the exponential gains of recent years, the Indonesian Cellular Phone Operators Association (ATSI) is predicting growth of at least 40% in 2003 and inward investment in network expansion of USD1 billion. ATSI says cellular growth could even reach 60% with much of the gains taking place in provinces outside the capital Jakarta and Java, especially after the implementation of the regional autonomy law. With demand for both fixed and mobile lines high in the country and with operators struggling to meet demand quickly enough – only 5% of the population currently has access to cellular services – it is clear that the market has huge room for growth. Exelcomindo has reportedly set aside USD175 million for network expansion in 2003 and Telkomsel is allocating around two-thirds of its USD400 million budget to boosting capacity in a bid to attract a further three million customers. IM3 too is optimistic of catching up with its larger rivals and garnering 5% of the market this year. It is clear that even though the Indonesian economy is limping along, the telecoms sector is poised to explode.