PT Indosat, the second-largest mobile phone operator, has signed a three-year contract with telecommunication producer Ericsson to modernize the operator’s network infrastructure in Jakarta, in response to the increasing demand for mobile broadband.
Indosat president director Harry Sasongko said that Indosat looked to modernize its radio equipment and core network to improve both the coverage and speed of the communication services.
“We are always looking for new ways to offer a better service to our customers and become the leading cellular broadband provider in Indonesia,” he said during the contract signing ceremony on Thursday.
Indosat, as of the end of 2011, owns 21 percent of the mobile operator market. PT Telkomsel has the lion’s share of 43 percent while XL Axiata takes the third spot with a 19 percent market share.
Indosat spokesman Adrian Prasanto added that data services would “be significantly improved” as a result of the equipment upgrade.
The National Development and Planning Board (Bappenas) and the Communication and Information Ministry predict that the number of broadband subscribers will reach 17 million by 2014, a 133 percent jump from numbers in 2010.
Adrian further added that the upgrades are part of Rp 6 trillion (US$626.5 million) the operator is distributing across its services this year, with two-thirds of the funds are earmarked for data services.
Adrian declined to comment on the value of the contract with Ericsson.
Ericsson spokesperson, Hardyana Syintawati, said that the modernization of the equipment would expand the coverage of base transceiver stations (BTS) by 40 to 75 percent.
The upgraded hardware and software for the radio network, which links mobile devices to operator’s networks and core network, which switches voice, text and data to their destination areas, will be installed in the BTS.
According to Hardyana, the increased coverage would mean efficiency for Indosat, since it would not have to install additional equipment to provide adequate coverage within an area.
“Indosat subscribers will receive a stronger and faster data connection,” she said, adding that the modernization process would start next year.
Ericsson Indonesia president director Sam Saba further said that Indonesia was an extremely important market for the Swedish company.
“Indonesia is our largest market in Southeast Asia,” he said, pointing out the fast growth in data services. He added that the company expected to see triple growth, or up to 200 percent, in mobile broadband as well as smartphone use in the next few years.
“And we don’t see this slowing down,” he said.
Hans Vesterberg, Ericsson CEO, added that the company was undaunted by the competition it faced from Chinese telecommunication equipment makers, who have been entering the Indonesian market.
“There will be competition. They will try to compete in their ways that they can do best,” he said during a limited press briefing attended by The Jakarta Post.
