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2. Indosat to starts operating fixed telephone. (Communication).

The monopoly of PT Telkom in fixed telephone operation ended this month with Indosat starting starts entering the business area in August, 2002. However, the termination of the monopoly would be gradual. Indosat only start operating local fixed telephone. It is start operating long distance telephone only in August 2003. In compensation Telkom will start operating international direct dialing (SLI) in August 2004. SLI operation is still monopolized by Indosat and Satelindo.

The exclusive right held by Telkom is originally effective until 2010 for local connections and 12005 for long distance connection (SLJJ).

Under the new regulation the two state-owned companies have to let go their exclusive rights.

Indosat hopes to attract corporate subscribers in the first operation in fixed telephone business. The company has built optic fiber telephone networks with point to point and point to multi point microwave radio networks with local central in Indosat building. Fixed telephone networks are built with the wireless local loop (WLL) and fixed wireless access systems with the Code Division Multiple Access (CDMA) technology of the latest type CDMA 2001X.

In the first phase, the features will include call waiting, call forwarding, call completion on busy subscriber (booking telephone) and call at the same time with three telephone users. In Nov, 2002, the features will be expanded to include hotline connection, alarm call, calling link identification presentation (CLIP) and selective call service (forwarding, acceptance and waiting).

Investment for 20,000 line units valued at Rp 170 billion

The telephone density in the country is 3% which is relatively low. Therefore, the opportunity for Indosat is still wide open. In the first phase 20,000 line units would be offered in four large cities including 8,000 in Jakarta, 5,000 in Surabaya, 4,000 in Medan and 3,000 in Batam. In Jakarta, networks have been installed in 31 buildings around the golden triangle area of Jalan Sudirman, MH Thamrin and Jl HR Rasuna Said.

The development of the 20,000 line units will need an investment of Rp 170 billion. The investment is high per line unit as all capacity has not been used. The telephone central will have a capacity of serving 100,000 subscribers. If all the capacity has been used, the investment per line unit will be reduced to US$ 200.

In the second phase, Indosat will build 450,000 line units involving foreign investors. So far ten consortium have plan to take part in the second tender Amoing the bidders are the Bakrie Group and Astra Group.

In the next 10 years the coverage will be expanded to include 45 cities in the country and in 2010 its target is to have 750,000 line units in operation to rise to 1.4 million units in 2015.
Projection of Indosat's fixed telephone line units

Year Total telephone
 line units (sst)

2002 20,000
2010 750,000
2015 1,400,000

Source: Indosat
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Comment:2. Indosat to starts operating fixed telephone. (Communication).
Publication:Indonesian Commercial Newsletter
Article Type:Brief Article
Geographic Code:9INDO
Date:Aug 13, 2002
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