Indonesia goes for WLL
Telecom Asia
January 2003
CDMA-based wireless local loop (WLL) technology is about to take center stage in Indonesia, with the three main operators planning major rollouts. The proportion of WLL lines in Indonesian networks increased by two and a half times last year, and market leader Telkom predicts wireless systems in the long-term will account for 60% of its network.
Sparking the growth is rivalry between the carriers following the issue by the government last September of a fixed license to international provider Indosat.
The three carriers see WLL as the fastest and most cost-effective way of rolling out services. And in each case the solution of choice is cdma2000 1x.
Juninho Jahja, Indosat's director of finance, said that in the first step, Indosat has operated 8,000 lines in the capital and another 5,000 lines in Surabaya, the country's second largest city, since September. The figure is a part of Indosat's plan to build out 700,000 WLL lines in the next ten years.
Rival Ratelindo added 150,000 cdma2000 1x lines to the end of 2002, for a total investment of $36 million. Market leader Telkom is installing 40,000 fixed wireless lines in the cities Surabaya, Denpasar, and Balikpapan, following a $14.7 million cdma2000 1x contract, with Samsung.
The rollouts take the 2002 total to 225,000 WLL lines, comprising 165,000 belonging to Ratelindo, 40,000 to Telkom, and 20,000 to Indosat. WLL lines now represent 4.59% of the total number of fixed lines, up from 1.84% in 2001.
By the end of 2002, the three operators' WLL lines represented 1.84% of the total fixed line number, but the industry predicts this will grow to 4.59% in 2003 and 10.73% in 2004.
Kristiono, Telkom's CEO, said that in 2003 Telkom would add another 500,000 WLL lines, taking wireless to represent 10.3% of the total number of fixed lines.
In the long term the company expected to deploy CDMA-based WLL in roughly 60% of its network, up from the current level of less than 1%, he said.
The attraction was that the CDMA WLL solutions were much lower in cost than wireline and the installation period could be as low as one month, compared with an average one year for wireline. He added that Telkom hopes to install another 1.2 million WLL lines by 2004.
Contrary to conventional wisdom, the WLL lines are also generating reasonable income. In 2001 alone, Telkom generated $849 million in revenue from roughly 7.2 million fixed lines, or roughly $117.9 per line. By comparison Ratelindo, an operator that employs WLL technology in all of its networks, generated $17.7 million from about 135,000 lines during the same period, or $131 per line.
Amid fierce competition, however, the operators' future depends on whether they can win in major cities or not. This is related to the country's telecommunication market being dominated by the densely populated cities of Java and Sumatra.
For this reason, Noorman Iljas, Ratelindo's spokesman, said that Ratelindo has proposed a license for nationwide operation but the government has not indicated whether it will award Ratelindo with nationwide license or not. Ratelindo currently serves Jakarta and other areas in Java.
- Mersagita Prabudi
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